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Sears deal struck but far from sure

SPRINGFIELD — With a bipartisan deal struck among top House lawmakers over how to best give tax breaks to Sears Holdings Corp. and others, attention now turns to rank-and-file state officials and Gov. Pat Quinn to see if the terms have enough political momentum in Springfield.

House Republican Leader Tom Cross said Thursday that he's agreed with top House Democrats to a tax breaks package that would include incentives intended to keep Sears in Hoffman Estates — a package that could be voted on Monday, just weeks before company officials say they want to decide whether to move their headquarters out of state.

Whether other lawmakers will go along will remain an open question until the votes are counted, as a General Assembly that raised income taxes on all Illinoisans earlier this year might be hesitant to give out tax breaks to big companies months later.

And Gov. Pat Quinn's office suggests the governor won't sign off on relief for businesses without relief for working Illinoisans, too.

“We have come to an agreement on a jobs package that will give some relief to a broad base of businesses in our state,” Cross, of Oswego, said in a statement. “This package will allow businesses to plan on longer-term research and development and the ability to carry their losses forward in a tough economy.”

Under the terms of the new package, Sears would get its property tax breaks with Hoffman Estates extended, as well as up to $150 million in income tax help over 10 years. Company officials have said they want to decide whether or not to move to another state by the end of the year.

”We are encouraged that they are returning to Springfield to consider a package that will help us remain an Illinois company,” Sears spokesman Chris Brathwaite said in a statement. “We sincerely appreciate the efforts of many members of the General Assembly over the last several months on our behalf.”

Also as part of the proposal, online trades made via CME Group would be taxed differently in Illinois, leading to less tax cost for the company, which has an operations center in Aurora.

Other provisions include a research and development credit available to businesses across Illinois, a break in the estate tax, a credit for live theater productions and other proposals that will cost the state around $150 million next fiscal year.

Keeping the incentives from starting this year, with a balanced state budget already in place, was a key part of the agreement.

State Rep. Fred Crespo, a Hoffman Estates Democrat who helped work out the Sears part of the deal, said voting for the bigger proposal will mean compromising and agreeing to provisions he doesn't want.

“How badly do you want this to happen?” he said. “And in order to do that, do you have to swallow a poison pill?”

Despite Cross' announcement of a deal, the package is far from assured. When lawmakers last debated a similar proposal weeks ago, the Illinois House rejected it forcefully, despite Senate approval.

This time, though, an increase in tax credits for the working poor and in the standard income tax deduction for everyone will be separated from the business breaks, perhaps setting up a situation where both pieces of legislation could be approved separately.

Quinn and other Democrats have said those provisions are critical to getting a deal done “as Illinois families work to make ends meet in today's economy,” said state Rep. John Bradley, a Democrat from downstate Marion that negotiated on the deal.

“The governor is very encouraged with the bipartisan agreement reached in the House,” said Quinn spokeswoman Brooke Anderson. “As we head into Monday's session, we'll continue working closely with the leaders and sponsors to get the job done.”

Cross has loudly opposed tax credits for individuals as part of the plan but signed off now on the business credits half of the deal.

But the Senate signed off on the package as a whole. So it's unclear whether splitting the previous plan will also split support among Senate lawmakers.

“We'll have to see,” said state Sen. Dan Kotowski, a Park Ridge Democrat.

The House is scheduled to reconvene in Springfield Monday, and if they approve the deal, the Senate is set to return Tuesday.

“There might be an agreement,” Crespo said. “But then you need the votes.”

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