Huge victory for the '99 percent' or just a lull in the corporate blackmail game?... Legislature goes home without approving more corporate welfare for Chicago Mercantile Exchange and Sears
Is corporate blackmail in Illinois finally being challenged? In a move that surprised anyone who had believed reports from Chicago Mayor Rahm Emanuel's media team or Chicago's corporate press, the Illinois General Assembly ended the 2011 part of its "Veto" session on November 29, 2011, without passing the tax subsidies demanded by Chicago Mercantile Exchange and Sears Holdings. Both CME and Sears had threatened to leave Illinois if they don't receive additional massive tax subsidies, on top of those they have already received.
That doesn't mean that Illinois politicians won't eventually cave in to the blackmail from two very profitable corporations (both of which pay their executives enormous salaries and bonuses), but only that the pressure of the movements that have been growing around the nation lately have at least hit their blackmail with a temporary setback.
The longest analysis available on the evening of November 29 of what happened was sent out by Greg Hinz of Crain's Chicago Business late in the evening.
CRAIN'S REPORT ON CME AND SEARS IN SPRINGFIELD
Legislature adjourns without approving CME tax-break bill, November 29, 2011
(Updated 7:30 p.m.)
Chicago's big trading exchanges and Sears Holdings Corp. will have to wait — likely at least until after Christmas — to find out if the Legislature will adopt tax breaks the firms say they need to remain based in Illinois.
But it's not clear the companies will wait.
Lawmakers late Tuesday departed Springfield after a crazy day in which the House and Senate pushed differing tax-break bills. The General Assembly is not due back until January.
The Senate passed one version, but it was overwhelmingly rejected by the House on an 8-99 vote. A separate, slightly different House version remained technically alive, but Senate President John Cullerton announced that his chamber would leave without any further votes, and the House adjourned.
Both bills would extend about $100 million a year in tax breaks collectively to CME Group Inc, CBOE Holdings Inc. and Sears. But Democrats who dominate both chambers could not come to an agreement on breaks for other groups, particularly the working poor, and Republicans declined to provide them much political help.
Mr. Cullerton noted that the CME-CBOE-Sears breaks would not take effect until July 1, and suggested that gives lawmakers time to finish a deal.
Though the companies reportedly are being courted by other states dangling large incentive packages, "I would suggest to them they should not take a rash action," Mr. Cullerton told reporters.
Mr. Cullerton noted the Senate version of the bill passed with 36 votes, and other sources suggested that further talks in coming days could yield a deal.
But the legislative stalemate tosses the ball squarely back to the companies — particularly CME chief Terrence Duffy, who had wanted a deal by now.
Earlier today, the CME declined to comment.
Said Sears in a statement: "We are disappointed that, today, the legislature was not able to reach agreement and pass a package that will help us remain an Illinois company. It is our hope that lawmakers will achieve a compromise very soon as our timeline for making a decision about our future by the end of the year has not changed. We sincerely appreciate the efforts of many members of the General Assembly over the last several months on our behalf."
Among matters the companies now will have to consider: What is the likelihood of action after the holidays?
In floor debate, House members complained about big tax deals for big companies and Republicans suggested that lesser breaks for small companies, estate beneficiaries and others were inadequate.
Meanwhile, Senate Democrats said they would not settle for anything that inadequately raised the earned-income tax credit.
Rep. John Bradley, the point person for House Democrats on the issue, said he would continue to work on a consensus bill, and believes it will attract at least 35 Democratic votes — more than half of what's needed.
"But it's not going to happen tonight," Mr. Bradley said.
The question is whether it ever will — and when.
