A smaller version of a proposal to cut taxes for corporations has passed an Illinois House committee, but its future is uncertain. The original proposal would have cost the state $850 million a year. Now, it’s just $250 million a year. State Rep. John Bradley (D-Marion), chairman of the House Revenue Committee, says a federal tax rule allowing companies to write off the depreciation value of their equipment all at once will expire next year, which is how the state will pay for the program.
Click here for summary
“By simply letting it run its course, there will be about $250 million that will come back on the books that can be dedicated to this package,” he said. The incentives package, which includes increases in the Earned Income Tax Credit and estate tax exemptions among other benefits, wouldn’t take effect until the start of the next fiscal year in July. Some lawmakers are concerned the measure takes away $250 million next year that could be used to pay overdue bills, and as such aren’t sure if they’ll vote for it on the floor. Lawmakers passed a resolution this spring mandating they spend any extra income on the state’s burgeoning bill backlog. Bradley says that’s why the incentives won’t take effect until the next fiscal year, but State Rep. Barbara Flynn Currie (D-Chicago) says that’s extra income in Fiscal Year 2013 not going to human service providers.
“We’re here because there are two companies in the state of Illinois that are holding a gun to our heads,” she says. “It does seem to be that at this time, when we are facing very serious fiscal problems, why wouldn’t we say ‘let’s spend that money on paying our old bills?’” Bradley says the expiring federal bonus depreciation law is separate from new growth, and referred to it as a business tax. Currie responded the state doesn’t have to automatically give business taxes back to businesses. Asked if there are the 60 votes required to pass the measure in the House, Bradley replied “we had six today,” referring to the six lawmakers who voted to pass the measure out of committee. Included in those six is Currie, who said she’d vote to pass the measure to the floor, but “reserved the right” to switch her vote during debate.