COOK COUNTY PROPOSES ANOTHER ROUND OF TAX INCREASES

In another attempt to find revenue to shore up an @ $600 million budget shortfall, two ordinances have been introduced increasing Cook County’s gross receipts tax and sales tax by 2% on all retail and service businesses.  If enacted, this ordinance would take effect January 1, 2008.

In addition, there are also several proposals aimed at increasing other taxes and fees in Cook County, including a 5.2 cents per therm tax on natural gas used in the county, a 7-8% tax on electricity used in the county, and air permit fees that would include the following “regulated air pollutants” – NOx, Carbon Oxides – Monoxide and Dioxide, Ammonia, PM 10 and 2.5, SOx, VOC, Lead and any other pollutant for which a national ambient air quality standard has been promulgated.  In addition, the air permit fee proposal includes mandatory reductions for CO2, SO2, and PM.

Cook County Board President Todd Stroger says that the proposals to increase natural gas and electricity bills to cover county government spending are "sound ideas" that deserve consideration.

CICI is asking members to contact their County commissioners urging them to oppose the Natural Gas and Electricity Tax Proposals. If you’re unsure what County commissioner represents your facility, please go to (If still unsure contact all those commissioners who you think represent your facility.): http://www.cookctyclerk.com/sub/elected_officials_map.asp?TYPE_ID=1&Title=Board%20of%20Commissioners

SENATE ACTS ON CAPITAL PROJECTS, GAMING

The Illinois Senate last night approved a long-delayed construction program for transportation and schools funded by a massive gambling expansion that would add three new casinos, including one for the City of Chicago, and allow current riverboat casinos more gaming positions.  These measures, SB 785 (Schoenberg, D-Evanston) (Bonding Authority), HB 2035 (Trotter, D-Chicago) (Gaming), and SB 1110 (Sullivan, D-Rushville) (Capital Program, RTA Loan), now head over to the House where the proposals face a very uncertain future when the House returns in early October for the Fall Veto Session.

In all, this gambling expansion will provide the debt service for a $13 billion state construction program.  This program includes $260 million for general state school aid and $1.9 billion in construction over three years, with the first $150 million going to numerous school districts that have been on a construction waiting list since 2002; $4.8 billion in road and bridge construction spending over the next six years; and a $200 million loan for the Chicago area mass transit systems to stave off cuts until next June. In June 2008, the Regional Transit Authority (RTA) must re-pay the loan with a funding source to be determined at a later time. 

Governor Blagojevich has publicly stated his desire to eliminate many tax and economic incentives for businesses, which he refers to as “loopholes”, in order to provide the funds necessary to re-pay the RTA loan.  Rest assured that CICI and the rest of the business community will aggressively fight this approach when and if the governor tries to advance this legislation after January 1, 2008, when it will only require a simple majority of votes.

The following are the tax and economic incentives that Governor Blagojevich is supposedly targeting for elimination. The incentives total more than $600 million, far above what is needed for the RTA to re-pay its loan.

• Eliminate the Manufacturers’ Purchase Credit (MPC) - $30 million
• Tax canned software - $65 million
• Decouple from federal accelerated depreciation - $100 million (one time revenue boost)
• Repeal deduction for foreign and domestic dividends received by corporations - $100 million
• Stealth gas tax - $45 million
• Eliminate single sales factor for non-service companies – $70 million
• Include Puerto Rico and outer continental shelf in definition of U.S - $30 million.
• Income tax withholding on gaming winnings over $1000 from non-residents - $4 million
• Decouple from 2004 federal tax legislation - $39 million
• End deduction for company owned life insurance - $9 million
• Extend the insurance tax to industrial insurance - $15 million
• Cap the amount of sales tax revenues large retailers are allowed to keep - $100 million

CICI, ACC URGE ACTION ON FEDERAL RAIL LEGISLATION

The American chemical industry needs to let Congress know that the industry’s global competitiveness and ability to expand domestically depends on fair and competitive rail service.  CICI is asking its member companies to take a few moments to visit the American Chemistry Council’s (ACC) website as described below to raise your voice and ask your elected officials in Washington D.C. to support important legislation that will make meaningful changes to the current rail system.

A healthy, reliable and competitively priced rail system is crucial to the stability of our economy, and the health of the chemical industry.  Monopoly rail carriers have no incentive to deliver efficient, predictable service, so the chemical industry is routinely subject to poor service and exorbitant prices.  The Surface Transportation Board (STB), established by Congress to address these concerns, has failed to protect rail customers from market power abuses.
 
Support of legislation that will enable the STB to restore competition to the nation’s rail system and provide for better service at competitive prices is crucial to the nation’s chemical industry.  Support is also needed for legislation that will subject the railroads to the nation’s antitrust laws, providing rail customers with a venue to challenge market power abuses.  The nation’s antitrust laws are the basic protection against such unfair practices.

To ensure that out industry’s voice is heard, please follow these three simple steps:

1. Please click on this link:   http://www.impactchemistry.com

2. If you have not yet registered, complete the registration information and then click the “register” button.  You will be automatically matched with your Senators and House member. In addition you will be provided a target letter to send to your elected officials. Based on their current level of support, this letter could be a thank you note for their support of the chemical industry or a letter requesting that they support our position on rail competition.

3. Beneath these targeted letters expressing your support for increased rail competition, click “Take Action.”  Your letters will be sent in real time to your representatives in Congress.

LEGISLATIVE & REGULATORY MEETING AT PRAXAIR ON OCTOBER 18

CICI’s next Legislative & Regulatory Affairs Committee meeting will be held at Praxair in Burr Ridge, IL, on October 18, 2007.  The meeting will start at 9:00 am.  All CICI members are invited and encouraged to attend.  Topics will include relevant discussions on the state budget, proposed taxes and fees, air emissions rules, and many other regulations affecting the industry.  If you wish to attend, please contact Lisa Frede with your RSVP at lfrede@cicil.net no later than October 16, 2007.

Please note that the Chemical Industry Council of Illinois Legislator is not intended to convey legal advice or set forth all legal requirements applicable to particular circumstances.

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