Rep. Keith Wheeler

SPRINGFIELD – State Representative Keith R. Wheeler, R-Oswego, was one of only 15 legislators voting “No” on House Bill 4237 on Wednesday, legislation aimed at skirting the 2017 federal tax reform law that caps deductions of state and local property taxes at $10,000. Specifically, the bill would allow Illinois residents to make “charitable” contributions to a new state-run nonprofit program in exchange for a credit that would offset their state tax burden.  While classifying the payments as charitable contributions rather than local taxes would help individual taxpayers avoid hitting the cap, Representative Wheeler stressed that fact that the Internal Revenue Service (IRS) could nix the plan with a ruling that such contributions are subject to the state-and-local-tax (SALT) deduction cap. 

“It is reckless and unwise for Illinois to move forward with passing a plan to circumvent the state and local tax deduction cap under the new federal law until we see how the IRS rules on it,” Representative Wheeler said. “If we pass this bill now and it becomes law, taxpayers who take advantage of it may well end up having made contributions to this program for nothing, because the IRS could step in and rule that these payments are indeed subject to the cap. The IRS is well aware what states like Illinois, California, New York and New Jersey are trying to do by considering similar proposals. We should not subject Illinois taxpayers to this risky scheme.”

TAXES

·        House Republicans oppose progressive income tax.   Illinois House Republican Leader Jim Durkin, along with members of the House Republican Caucus, filed House Resolution 975 Tuesday to state their opposition to a proposed progressive income tax on Illinois residents. 

“The General Assembly cannot continue spending money frivolously and expect Illinois taxpayers to pick up the tab with more tax increases like this progressive income tax proposal from the Democrat party,” Durkin said. “It is our constitutional duty to protect our constituents, and we will remain firm as a caucus on blocking any progressive tax measures.”

Illinois already has the highest effective state and local tax burden in the nation, according to a report by WalletHub. Studies have shown that states with progressive income taxes create even more of a tax burden on the middle class and dissuade economic prosperity.

ECONOMY

·        ADM, Deere, Caterpillar honored as top Illinois firms.  The honor was published in “Illinois Top 200,” a series of online surveys enabling Illinois respondents to honor local leadership activities, institutions, and experiences.  Illinois respondents were asked to honor their favorite “homegrown companies,” in a list that also included McDonald’s, Walgreens, Rand McNally, DeKalb AgResearch, Sears, State Farm, and Dairy Queen.  

The three named firms – ADM, Deere, and Caterpillar – all share a historic orientation toward Illinois agriculture and heavy-industry engineering.  ADM helped make Illinois corn oil and soy-based protein into global commodities, while Deere & Co. helped invent the machines that grow the corn and soybean crops that are used to grind or press out the oil and protein meal that Illinois crops produce.  Like Deere, Caterpillar makes heavy off-road machinery used around the world.

“Illinois Top 200” is now welcoming votes for top inventions and innovations.  Candidates include farm silos, blood banks, plasma display screens, and pinball entertainment machines.  Votes will be accepted until Friday, March 30.

Jobs – February 2018 unemployment

·        Illinois notches new all-time high in payroll jobs.  The Illinois Department of Employment Security (IDES), which compiles Illinois nonfarm payroll job numbers in cooperation with the U.S. Bureau of Labor Statistics, announced this week that revised employment numbers for January 2018 show that Illinois has notched a new peak employment level.  The revised statistics show that nearly 6.1 million men and women were employed on Illinois-based nonfarm payroll jobs in January 2018.  The new high was achieved as the result of net new jobs that had been created in calendar year 2017 within Illinois. 

Budget – COGFA report

·        Commission on Government Forecasting and Accountability (COGFA) releases February 2018 report.  February 2018 State general funds receipts grew significantly over similar figures posted in February 2017.  However, as with previous months in FY18, this healthy year-over-year performance was significantly affected by an income tax increase enacted in July 2017.  During the year-over-year period that spanned February 2017 and February 2018, sales tax receipts grew by 13%, individual income tax receipts grew 50%, and corporate income tax receipts increased by 378%. 

Education – Scholarships

·        Tax credit scholarship clearinghouse announces more than 33,000 applications.  The benchmark news came from Empower Illinois, one of the nonprofit entities overseeing implementation of the Illinois tax credit scholarship program created by the Illinois General Assembly in 2017.  Under this new tax credit, Illinois income taxpayers are authorized to donate moneys to an approved scholarship clearinghouse.  The moneys will be used to pay for scholarships to be awarded to enable children to attend fee-charging schools.  Scholarships that will cover 50 to 100 percent of a student’s tuition and school-related expenses will be awarded to children from income-eligible households.

Empower Illinois’ announcement followed the nonprofit’s previous announcement of a glitch on January 31.  When the Empower office first tried to roll out their online scholarship application window, so many applications were submitted that the website broke down.   The 33,000 valid applications submitted in the second process, which generated totals announced on Wednesday, February 28, reflect emergency repairs made to the application website.  Empower Illinois reported receiving $45 million in pledged donations from Illinois taxpayers.  The taxpayers will receive individual income tax credits to cover up to 80 percent of the cost of their donations.  Applicant households who do not get into the program this year may choose to reapply again in early 2019.