Illinois lawmakers advance tax breaks, but no pension deal

From staff and wire reportsNovember 6, 2013 

— Illinois lawmakers on Wednesday advanced tax breaks worth millions of dollars for Archer Daniels Midland Co. and the newly merged OfficeMax and Office Depot, but they were set to end their fall session without taking action on an issue that could be a roadblock for those deals: the state's $100 billion pension shortfall.

Gov. Pat Quinn has said he won't consider -- much less sign -- any corporate incentives until legislators put a bill on his desk that addresses the unfunded pension liability, which is the worst of any state. House Speaker Michael Madigan said Wednesday no agreement is coming this week, and he hopes lawmakers will be able to return to Springfield before the end of the year to pass "meaningful" reform.

But any pension agreement will need the backing of a majority of both the House and Senate -- support that has been elusive for years, and continues to be difficult to drum up.

"Were in some very difficult, challenging negotiations, and getting everybody on the same page is proving to just be way more difficult than I would have liked or I would have anticipated," said Rep. Elaine Nekritz, a Northbrook Democrat and Madigan's point person in the House on pensions.

The tax incentives add some new urgency to the discussion.

Naperville-based OfficeMax and Florida-based Office Depot completed their merger Friday, and the new company -- which is using the name Office Depot Inc. -- is debating between Illinois and Florida for its corporate headquarters, interim co-CEO Ravi Saligram told a Senate committee. He said the new board of directors already is comparing the two sites and a decision could come quickly.

"I think now time is of the essence," Saligram said.

The incentive package would give Office Depot up to $53 million in tax breaks over 15 years. Saligram said the company has 2,050 employees in Naperville. If its headquarters is there it would add another 200 jobs and make capital investments of $150 million.

Decatur-based ADM could receive up to $30 million -- $1.5 million per year for up to 20 years -- to keep its global headquarters in Illinois.

The agribusiness giant announced in September it plans to move its world headquarters -- and about 100 jobs -- to a city with better international access, and Chicago officials have said the city is in the running. But Greg Webb, ADM's vice president of government relations, told lawmakers "there is interest from other world-class, global cities."

Sen. Dave Luechtefeld, R-Okawville, asked Webb what would happen if Illinois lawmakers offered no incentive to ADM. Webb said the company already has decided to move the headquarters and up to 200 employees to somewhere.

"Now it's just a matter of location," Webb said.

Under the legislation, ADM would create 100 new technology jobs at the new global headquarters and relocate at least 100 jobs from out of state to Decatur, which would remain the company's North American headquarters and keep thousands of jobs. The company also must hire at least 100 full-time employees a year for five years for either new or open positions.

ADM Spokeswoman Victoria Podesta said if the measure gets to Quinn's desk and he signs it, "it certainly creates the path for us to stay here," but that it's not a done deal.

"The decision has to be made when all of those elements are in place," Podesta said.

The Senate Executive Committee approved both incentive packages Wednesday on a voice vote. They could be heard on the Senate floor Thursday, the final day of the fall legislative session.

The House on Thursday also could give approval to anti-gun legislation that has fired debate among lawmakers since last spring.

The Judiciary Committee sent Rep. Michael Zalewski's bill to the floor on a 12-2 vote Wednesday after the Riverside Democrat agreed not to change state law regarding those caught with a loaded, unlicensed gun for the first time.

Under the measure, a crime-fighting initiative backed by Chicago Mayor Rahm Emanuel, they will face a prison sentence of one year. Zalewski originally was pressing for offenders to be required to serve 85 percent of their sentence, rather than the current state law of 50 percent. But he amended his bill to require that half of the time be served. The change helped Zalewski pick up support from the National Rifle Association, which had worried law-abiding gun owners would get snagged in an innocent mistake.

Quinn's Department of Corrections remains opposed because officials say it would cost more than $700 million over the next decade to house those criminals for longer periods.

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