Ill. Legislature seek business tax transparency
SPRINGFIELD, Ill. (AP) — Struggling to explain to voters where their money goes while Illinois continues to face financial hardship, legislative leaders kicked off their fall session Tuesday with a plan to divulge the corporations that don't pay any income tax.
Senate President John Cullerton and House Majority Leader Barbara Flynn Currie say their proposal would help lawmakers determine whether tax credits designed to create jobs are working or worthless in a state where they estimate two-thirds of businesses pay no corporate income tax.
But business leaders immediately condemned the plan, saying it unfairly targets confidential information of a few companies and would add to the burden of conducting commerce in Illinois.
The plan by Cullerton and Currie, both Chicago Democrats, would require publicly traded corporations to publicize more than a dozen points of data relating to their tax liability — a liability that is often softened by credits and incentives created by the Legislature. Companies would not have to report on a given tax year until two years later, a hedge against competitive disadvantages, the lawmakers said.
"Let's find out what's happening in the real world so that the policies that we create have some relevance and have some justice and some fairness about them," Currie said to a roomful of community activists in the state Capitol.
The proposal opened the General Assembly's six-day fall session, a year after a backlash for tax breaks it approved in an economic downturn which kept Sears Holding Corp. and companies that operate Chicago financial exchanges from leaving the state.
The budget picture hasn't improved. Lawmakers face spending shortfalls in several state agencies that handle social-service programs such as child protection. A House measure arose Tuesday to revive an idea previously championed by Gov. Pat Quinn to borrow money and pay down some of the $9 billion in overdue bills. And the Senate is looking at a vote Wednesday to override Democrat Quinn's veto of spending to keep several prisons and other state facilities open.
Cullerton said the tax-disclosure measure would help legislators educate taxpayers on where their money goes and how much comes from business taxes.
"More importantly, we would find out how much corporations don't pay," Cullerton said. "That is really the mystery that we're trying to solve."
A national study released earlier this year listed Illinois as among two-dozen states that do little if any evaluation of business tax credits. Illinois offered $273 million in tax breaks in 2010, up from $64 million four years earlier.
Mark Denzler, vice president of the Illinois Manufacturers' Association, doesn't believe the plan is truly designed to provide more information for deciding tax policy. He said the state Revenue Department knows how much it collects from each company and how much various tax deals cost.
The plan would further burden businesses, force them to provide out-of-context numbers, and open doors to competitors in gaining an edge, according to Todd Maisch of the Illinois Chamber of Commerce.
"Not only will you have to put all this sensitive information out there, where in almost every other state it's completely private, but now they're going to have to call a press conference to try and explain it," Maisch said.
A House plan for the state to borrow $4 billion to take a chunk out of its backlog of overdue bills was delayed Tuesday when the measure's Democratic sponsor said she was still finalizing it. But that didn't keep Republican Comptroller Judy Baar Topinka from telling the House Executive Committee that it's a bad idea to pay down debt with more debt.
Quinn supported a similar idea a year ago but failed to win approval.
Cullerton was poised for a Senate floor vote Wednesday to override Quinn's budget cuts, including $56 million lawmakers provided to keep open prisons and other state operations the governor says are unaffordable.
An override wouldn't force the governor to keep facilities open but would keep him from spending it in other areas, such as for child-protection programs in the Department of Children and Family Services.
Another House committee agreed to schedule a special election April 9 to fill Jesse Jackson Jr.'s congressional seat. Jackson, who has been diagnosed with bipolar disorder, resigned last week to focus on his health.
Associated Press writer Sara Burnett contributed to this report. Contact John O'Connor at https://www.twitter.com/apoconnor
The bills are SB282, HB6240, and SB3338.