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Sears remains part of big tax breaks deal

SPRINGFIELD — Suburban lawmakers say there's a “tentative understanding” on a massive package of tax breaks they hope the General Assembly will vote on next week, including incentives meant to entice Sears Holdings Corp. to stay in Hoffman Estates.

The income tax credits for Sears, a portion of the tax incentives for the retailer, likely would not take effect until the new fiscal year begins next July, lawmakers said, pointing to concerns over handing out hundreds of millions of dollars worth of tax breaks to futures exchange CME Group, Sears and others while the state budget is crippled.

The deal also includes more widespread credits for small businesses and help for the working poor, said state Rep. David Harris, an Arlington Heights Republican, who called the proposal a “tentative understanding” that sets the stage for a House committee hearing Monday.

Earlier, some lawmakers had considered breaking off some portions of the bill because the price tag had grown so large — possibly as high as $850 million.

Harris cautioned that because the latest proposal was generated in talks among a select few House lawmakers, it's unclear how his colleagues will react.

“I don't know how they will respond,” Harris said.

The General Assembly meets in full session Tuesday with a goal of settling the tax-break issue, capping months of negotiating over the Sears proposal, in particular. It is the last scheduled day in session this year.

Sears officials have threatened to decide by the end of the year whether to move its headquarters out of state.

State Rep. Fred Crespo, a Hoffman Estates Democrat, also urged caution.

“There's still a couple other steps that need to take place,” Crespo said.

Terms of the Sears portion of the deal are mostly agreed to. Sears' property tax deal with Hoffman Estates would be extended until the company gets $125 million — enough to pay off its investment in area roads and bridges.

Carpentersville-based Community Unit District 300 would get about double the amount of property taxes it now gets from Sears, and Hoffman Estates likely would assure it wouldn't use any of its portion of tax revenue from Sears to run the Sears Centre arena.

Some lawmakers have voiced opposition, arguing the state shouldn't pick individual companies to receive tax breaks. And others might consider it politically distasteful for the state to raise income taxes on individuals at the beginning of this year and give big breaks to profitable companies at the end.

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