Debate begins on tax breaks for Sears, but deadline looms

SPRINGFIELD — Lawmakers Tuesday began debating a massive group of tax breaks that includes a deal for Sears Holdings Corp. to stay in Hoffman Estates, but with only two days remaining in the legislative session for this year, pressure continues to mount.

Committees in both the Illinois House and Senate debated the proposals Tuesday afternoon and evening, setting up the possibility of either final votes or a political punt in the coming days.

In the Senate, lawmakers of both parties largely sounded as if they'd get behind the proposal quickly. Sen. Matt Murphy, a Palatine Republican, said that while he'd like to see more broad tax reform, it would be a “catastrophic loss” to see either Sears or CME Group, which has an operations center in Aurora and has threatened to leave, move their headquarters out of Illinois.

In the House hearing, though, lawmakers asked more questions and expressed more concerns, once raising the specter of adding to lawmakers' schedule later this month if a deal can't get done quickly enough.

CME executives weren't supportive of that idea, and officials might rush on a deal as a result.

Sears, though, sounded a little more flexible.

“We understand the need for appropriate review by the legislature and we are willing to work with them on this matter,” said Sears spokesman Chris Braithwaite. “As a retailer, our fourth quarter is the most important time of the year and we hope this can be resolved as soon as possible so we continue our focus on the upcoming selling season.”

Sears is asking for an extension of its current tax deal, as well as job-creation credits from the state.

Rep. David Harris, an Arlington Heights Republican, said that the complex deal might not move as quickly as the kind of Internet stock trade CME deals with every day.

“It just doesn't move quite as fast in the legislature, and I ask you to understand that,” Harris said.

Testifying before lawmakers, Sears officials revealed that they've received a tax incentive offer worth $400 million from a nearby state, which they did not name. General counsel Dane Drobny said Sears wants to extend its property tax deal with Hoffman Estates to recover most of the $200 million it spent on infrastructure in the area.

“We are not seeking a handout,” he said. “We are not seeking a new benefit.”

But officials from Community Unit District 300, based in Carpentersville, were forceful in their opposition. They attended hearings Tuesday wearing red, saying their budget will be in the red, too, should Sears' tax breaks go forward.

“We have already cut $14 million from our budget in the last two years, leaving us with some of the highest class sizes in the state,” Superintendent Michael Bregy told lawmakers.

Some lawmakers from outside the school district have taken notice. Rep. Ed Sullivan, a Mundelein Republican, asked Gov. Pat Quinn's budget director in the hearing to address the district's concerns.

“It seems like maybe some room for negotiation with the school district,” Sullivan said

The CME and Sears provisions are politically tied to a much larger series of tax proposals that includes increased tax credits for the poor and business incentives for research and development, among others.

Harris said he didn't blame companies like Sears for looking for tax deals from other states and asking for more incentives from Illinois. Motorola Mobility in Libertyville and Navistar in Warrenville have gotten job-creation credits similar to what Sears is asking for.

“It ought to be like Bob Barker on ‘The Price is Right,' saying ‘come on down,'” Harris said.