Business Leaders Worry Federal Tax Benefits Will Be Targeted by State
As Illinois legislators work on passing a new state budget, Illinois Chamber of Commerce President and CEO Todd Maisch says there is concern Democrats will try to reverse federal corporate tax benefits in Illinois.
Here is the original story as reported by Illinois News Network:
As budget deadline looms, business community worries federal tax benefits could be targeted by state lawmakers
Legislative leaders have said the state is on track to pass a budget before the May 31 deadline for the first time in years, but a prominent business group has raised concerns, saying how the budget is balanced is just as important as balancing the budget on time.
Lawmakers were scheduled to be in session Saturday and Sunday, but those days were canceled. They’re expected to take the weekend to craft the budget behind closed doors. Both chambers of the General Assembly are scheduled to be in session Monday.
One budget leader, state Sen. Heather Steans, D-Chicago, said budget details are coming together.
“We’ve been meeting very regularly and we continue to really narrow the gap,” Steans said Friday. “It’s very close now. I think there’s a real path to having an agreed budget and it’s feeling that way.”
Illinois Chamber of Commerce President and CEO Todd Maisch said having a timely and balanced state budget is important, but “if your solution is to raise taxes dramatically, that’s bad for the business community.”
“If it’s to go ahead and restrain spending and maybe find a little more revenue in places that are not hurtful to the business community, that’s something in a conversation you can have,” Maisch said.
In 2015, lawmakers passed a budget for fiscal 2016 that Gov. Bruce Rauner ultimately vetoed, saying it was billions of dollars out of balance. That started a two-and-a-half-year budget impasse with lawmakers passing stopgap or piecemeal spending bills. While there was no approved budget during this period, spending continued because of court orders and consent decrees.
While the Senate passed a budget in 2016 for fiscal 2017, the House didn’t follow through.
Last year, both chambers passed a full year’s appropriation and a $5 billion income tax increase, which Rauner subsequently vetoed. In overtime session over the Independence Day holiday, both chambers overrode the governor’s budget and tax hike vetoes, giving the state the first full year’s budget in more than two years.
For the coming fiscal 2019 budget, Maisch said there’s concern Democrats will try to reverse federal corporate tax benefits in Illinois.
“The repatriation of money from overseas is very, very important [to the business community,” he said. Democrats “may very well say the state should tax all of that.
“Also the immediate expensing of small business investment in their business is something they may very well go ahead and try and decouple from, which means ‘no, you don’t get that benefit at the state level’,” Maisch said.
“It’s obviously all give and take,” Steans said of the particulars without providing insight into closed-door negotiations.
“I think clearly any agreement is likely to not just include fiscal year ‘19 but a supplemental for fiscal year ‘18,” Steans said of the spending agreement.
How much that supplemental would be for overspending in the Illinois Department of Corrections and other areas isn’t quite clear, but it could be in excess of $1 billion.
There are other issues, including capital spending for the Quincy Veterans Home. Gov. Bruce Rauner’s administration is requesting up to $230 million for a new building in Quincy after a fatal outbreak of legionnaires’ disease. The outbreak reportedly caused by old water pipes has resulted in 13 deaths since 2015.
“Obviously Quincy and doing something to certainly start what needs to happen there is certainly part of the discussion,” Steans said.
She said not passing a timely budget, as has happened in recent years, is not an option.
“Vendors not getting paid, nonprofits going out of business” were some of the impacts of the historic impasse that ended last summer, Steans said. “I think we need to and taxpayers deserve fiscal stability.”
The deadline to pass a budget with simple majorities is Thursday, May 31. The next budget year begins July 1.