Next session dates: House - November 1, 2 & 5
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This week...
Speaker Calls House Back for Session
Earlier this week, House Speaker Michael J. Madigan notified members that the House of Representatives will reconvene on Thursday, November 1 to begin additional discussions regarding a bailout of the mass transit system in northeastern Illinois. According to the Chicago Transit Authority (CTA), severe budget problems will result in a $1 fare hike, employee layoffs, and elimination of 39 bus routes on November 4th unless the General Assembly provides nearly $200 million in additional funding.
Earlier threats by the CTA to curtail service or impose fare increases were postponed in October when the Governor decided to provide an early advance payment of the CTA’s state reimbursement. As a result, the possible "doomsday" scenario was postponed for a month. According to the CTA, more draconian cuts will begin in January that could include the elimination of an additional 43 bus routes, closure of 3 garages, and the layoff of 1,800 employees.
While the transportation agencies are painting a very bleak picture, there is some disagreement as to the scope of the funding problem and how to resolve the issue. Many legislators, led by Sen. John Cullerton (D-Chicago) and Rep. Julie Hamos (D-Chicago) have advocated for legislation (SB 572) that would increase the sales tax in Cook County and the collar counties (DuPage, Kane, Lake, McHenry, and Will) by 0.25 percent along with a real estate transfer tax in Chicago. Opposed by a majority of Republicans and some downstate Democrats, this measure was brought before the House but failed to receive the required votes.
In recent days, House Republican Leader Tom Cross has been acting as an emissary between the Governor and four legislative leaders in trying to reach some accord. Details of the possible $350 million bailout plan were trumpeted by the Governor this week in the press but seemed to fall apart quickly under scrutiny. According to the plan, gas taxes collected in Cook and the collar counties would be diverted for mass transit. Then, a combination of taxes and fees including an increase in the cigarette tax, higher vehicle title fees, sweeping dedicated state funds, and higher fares would be used to replace the gas tax revenue.
At this time, no consensus has emerged as the possible cuts loom on the horizon. It is critical that customers and employees are able to travel to businesses and the IMA will continue to be engaged to make sure that any solution is reasonable.
IMA Participates in Streamlines Sales Tax Hearings
A series of public forums held by Senator John Cullerton (D-Chicago) and Sen. Pamela Althoff (R-Crystal Lake) in the past two weeks have focused on educating businesses and local governments on the Streamlined Sales Tax Project (SSTP). Despite having legislation (SB 1429) introduced in Illinois, lawmakers to date have failed to pass the measure out of the Senate due to concerns about negative revenue impacts on local governments and possible higher taxes for the business community.
The Streamlines Sales Tax Project is a national effort to streamline the sales tax system of every state in the country that would eventually allow sales tax to be collected on Internet Sales. However, given the complex nature of state tax systems, particularly in Illinois which is generally cited as the most complex sales tax structure, gaining agreement from various states is difficult. Substantial tax law changes would have to be adopted in order for the project to move forward.
These "public forums" were educational in nature and were not conducted by any specific legislative committee. The IMA has strong reservations about the potential impact on its members and will continue to stay involved.
Congress to Debate Massive Tax Overhaul
In a bill that could have major ramifications on the manufacturing sector, House Ways & Means Chairman Charles Rangel (D-New York) this week outlined his "Mother of All Tax Bills" to the Committee membership. The package, consisting of three separate pieces of legislation, seek to (1) repeal the individual AMT and provide additional benefits for low-income families; (2) extend the temporary AMT patch by one year; and (3) cut the corporate tax rate to 30.5 percent.
While these three items are generally beneficial, the offsets required to makes these changes revenue neutral are aimed at the business community including the elimination of the popular Research & Development tax credit and repeal of the Section 199 manufacturing deduction, LIFO accounting rule, and a higher payroll tax on Subchapter C Corporations. For individuals, there is also a new 4 percent surtax on incomes greater than $150,000 for an individual or $200,000 for joint filings.
Congress generally takes months or years to make major changes and the IMA, along with our counterparts at NAM, will stay involved as the legislative process moves forward.
Comptroller Unveils New Open-Book Website
Comptroller Dan Hynes this week unveiled a new searchable database that will allow the public to see the relationship between those companies or individuals that make political contributions and also receive state contracts. The new program, deemed "Open Book" will match state contracts with political contributions that are filed on a semi-annual basis with the State Board of Elections.
"The purpose of Open Book is to make it much easier for the public to 'follow the money,'" said Hynes. "That should make public officials more accountable to the people they serve. In turn, it is my hope that some measure of the public confidence in state government that has been lost over the years can be restored."
The new database comes as many citizens and news media continue to call on Senate President Emil Jones to allow SB 1 out the Senate Rules Committee. This measure which has 47 co-sponsors in the Senate and has been bottled up by the Senate President would prohibit entities receiving more than $25,000 in state contracts from making political contributions to Constitutional Offices responsible for the grants.
Register today for IMA's Annual Meeting and Luncheon
Reserve December 7, 2007 on your calendar and plan to attend the IMA's Annual Meeting and Luncheon. As we begin a year-long celebration of our 115th anniversary, we'll be honoring seven founding companies who remain active members today; Amsted Industries, Brunswick Corporation, Commonwealth Edison, Deere & Company, Dial Corporation, Peoples Energy and Tablet & Ticket Company. Visit http://www.ima-net.org/annual07.cfm for complete online registration and sponsorship information.
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