House panel OKs tax breaks for Sears
SPRINGFIELD -- With Sears Holdings Corp. officials saying they'll decide in the coming weeks whether to leave Hoffman Estates, state lawmakers are poised to vote as early as Tuesday to give the retail giant millions of dollars in tax breaks in hopes it'll stay.
After a House panel approved the tax-break proposal Monday afternoon, the question became whether lawmakers who raised income taxes on residents earlier this year and continue to deal with the state's overdue bills will agree to give tax relief to big companies.
The proposal includes breaks for the working poor and small businesses, too, but Sears and futures exchange CME Group -- both of which have threatened to leave -- are the motivation for lawmakers to get a deal done now.
But at Monday's House hearing, Gov. Pat Quinn's budget director suggested Quinn wants to see more help for the poor in any proposal, raising a question of what the governor would do even if lawmakers approve the tax breaks this week.
Quinn "thinks there's a little more work to be done," said budget director David Vaught of Naperville.
Still, the House committee voted 6-0 to send the legislation to the House floor for a full debate.
Sears spokesman Chris Brathwaite said that if the proposal is made law, company executives working on the issue would "strongly recommend" the board of directors keep Sears at its current headquarters.
Lawmakers' preliminary approval Monday came at a sometimes contentious hearing where Community Unit District 300 officials continued to strike a nerve with state officials.
"I know that we have been a thorn in your side," Superintendent Michael Bregy said near the beginning of his remarks. "We respect the difficult work that you do."
Late the night before, Bregy sent out a scathing criticism of the most recent proposal. But most of his concerns were eased before the beginning of the hearing, and afterward, Bregy released a statement saying he was "reluctantly satisfied."
"While we have achieved huge progress over the past few months, make no mistake that the end result was a huge compromise," Bregy said. "We are reluctantly satisfied with the compromise plan. It is a very bittersweet victory for our community."
Nevertheless, the school district's unconventional lobbying techniques drew a rebuke from lawmakers of both parties. The committee chairman, Democratic state Rep. John Bradley of downstate Marion, raised his voice occasionally like an angry teacher in an unruly classroom, saying once he was "not happy" with District 300's recent tone.
And state Rep. David Harris, an Arlington Heights Republican, criticized harsh emails and suggested Bregy listen more closely to the lobbyist -- former lawmaker John O'Connell -- the district hired.
"He really does know what he's doing," Harris said. "Just like you know how to run a school district."
The school district would get about double the amount it now does from the Sears property tax deal, about $3 million more a year.
The plan would extend Sears' property tax breaks with Hoffman Estates until the company recovers $125 million in investments it made to nearby roads and bridges. Other local taxing bodies would get more, too.
Under Monday's plan, if Sears left Hoffman Estates in the next five years, the company would have to pay back the tax help it got. And it must keep at least 4,250 jobs on site to qualify; the company's existing deal sets it at 2,000. Sears employs about 6,100 in Hoffman Estates.
In addition, Hoffman Estates would get $5 million a year to maintain the area surrounding Sears' property and can't use any money from the deal to operate or pay for the Sears Centre arena.
Some of the terms of the package not related to Sears or CME Group were scaled back as lawmakers began to worry about the overall cost. Monday's plan is estimated to cost $250 million a year starting in July.
"The state of Illinois certainly is not on sound financial ground," Harris said.
Others argued that ground is so shaky that Illinois officials should be paying down its billions of dollars in unpaid bills instead of helping profitable companies.
"There are those who think we should have let them go," said state Rep. Barbara Flynn Currie of Chicago, the House's second highest ranking Democrat.
And others expressed concern that if companies like Sears can get a break by threatening to leave, more will follow.
"What's going to stop the next big company from putting a gun to our heads?" said state Rep. Mary Flowers, a Chicago Democrat.
Others just couldn't get their questions answered. Rep. Sandy Cole, a Grayslake Republican, had questions about the complex tax changes for CME Group. But even though the proposal is worth millions of dollars to the company, no one from CME Group was available to testify at Monday's hearing.
"I'm really surprised they're not here," Cole said.