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November 20, 2007
Volume 21 - Issue 28
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CHICAGO INCREASES NATURAL GAS TAX
Over the objections of the city’s business community, the Chicago City Council last week approved a $5.9 billion spending plan that is “balanced” on nearly $275 million in new taxes and fees including $86 million in new property tax revenue. Included in this spending plan was an increase in the city’s natural gas use tax on businesses from the current 5.2 cents per therm to 6.3 cents per therm. In all, this increase will cost the city’s businesses $3.9 million a year. The current exemptions from the natural gas tax are still available, however. This tax does not apply to a business located in an enterprise zone:
- after it has used or consumed 2.25 million therms of gas in an annual tax year (July 1 through June 30) and provided that the business is:
- registered to pay, and in compliance with, the employer's expense tax (EET), and
- provided that the business has employed, and paid the EET on, at least 95% as many full-time employees or commission merchants in the four most recently due EET quarters combined as in the four previous EET quarters combined, and
- provided further that the tax shall again apply to the first 2.25 million therms of gas used or consumed by the business in the next annual tax year
The budget also contains new taxes on beer and liquor, a new 5-cent tax on bottled water, increased water and sewer fees, a telephone surcharge, and enhanced lease tax on automobiles. |
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COOK COUNTY COMMISSIONER PUSHES ALTERNATIVE TAXES
Cook County Board Commissioner Robert Maldonado introduced today alternative tax proposals that would raise $73 million for the county’s next year's budget and $123 million over a 12-month basis. The proposals include:
- Expanding the definition of the county’s current gas and diesel tax to "fuel tax”. This would now include jet fuel, propane gas fuel, diesel oil, motor benzol, motor benzene, kerosene, and other “special fuel”. The current rate of 6% would remain.
- 1% hotel tax increase.
- An on-premise alcohol tax of 1.5% of sales.
- Increasing the use tax from .75% to 1%. The use tax is for licensed property such as cars, snowmobiles and boats that are purchased outside of Cook County but registered with the state to an address inside the county.
- Raising the motor vehicle weight tax. This would be a new $100 tax on the purchase of vehicles over 3,300 pounds.
At the time of this writing, these proposals have been referred to the county’s Finance Committee, which is scheduled to meet again on Tuesday, November 27, 2007 at 10:00 am.
Again, no mention was made of the previously proposed taxes on natural gas and electricity. However, these proposals should still be considered very much alive. The proposed taxes on natural gas and electricity could still be an option for the Board if they fail at enacting these alternative taxes. CICI will keep you abreast of this new development. |
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MIDWEST GOVERNORS SIGN CLIMATE CHANGE PACT
The regional summit on energy and climate change hosted by the Midwest Governors Association (MGA) last week has resulted in an agreement where states, including Illinois, pledged to work together to reduce energy consumption, focus on renewable energy, and cut greenhouse gas (GHG) emissions. The MGA specifically agreed on:
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establishing GHG reduction targets and timeframes
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joining the Climate Registry to enable tracking, management and crediting for entities that reduce GHG emissions
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developing and implement other associated mechanisms and policies as needed to achieve GHG reduction targets, such as a low-carbon fuel standard and regional incentives and funding mechanisms
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developing a market-based and multi-sector cap-and-trade mechanism to help achieve GHG reduction targets. This cap-and-trade system should be developed to:
1. enable linkage to other jurisdictions’ systems to create economies of scale, increase market efficiencies, diversity and liquidity, while reducing costs
2. maximize economic and employment benefits, while minimizing any transitional job losses
3. reduce the shifting of generation and emissions to non-participating states
4. credit past and present actions to reduce GHG emissions; and
5. address potential interaction or integration with a future federal program
In Illinois specifically, business and labor groups have started lobbying state lawmakers about proposals to restrict emissions from coal-fired power plants and impose California-style pollution controls on cars sold in Illinois. These two recommendations were the most controversial among two dozen approved recently by the panel appointed by the governor to study ways to reduce greenhouse gases in the state by about 25% by 2020. The recommendations and the panel's report are nearly final but probably won't be formally submitted to the governor until late November.
There has also been focused attention on a cap-and-trade proposal to cap power plants' carbon dioxide emissions. To mitigate the cap's impact, the state would implement a system of emission allowances that could be bought and sold by plant owners, which according to the state’s utilities would be costly, paying an estimated $1 billion a year for the allowances. This cap-and-trade system accounts for the bulk of the panel's proposed greenhouse gas reductions. Business and industry argues that this will only lead to more cutbacks in Illinois, which will lead to more power — and more pollution — being generated by nearby states, hurting the Illinois economy and negating any environmental gains.
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SPECIAL SESSION NEXT WEEK FOR MASS TRANSIT FUNDING
Governor Blagojevich has called lawmakers back to Springfield next Wednesday for a special session to presumably pass legislation that would bail out the Chicagoland area’s mass transit systems before their self-imposed doomsday plan of cut backs becomes a reality on January 20, 2008. The plan the governor is endorsing would take the area’s sales tax receipts from motor fuel and apply it toward mass transit funding. However, the governor also wants to replace this “lost revenue” with his never-ending mantra of closing “corporate loopholes”, even though with record gas prices and record gasoline tax revenues, most argue that this “lost revenue” doesn’t really need to be replaced. CICI and the state’s business community will adamantly oppose any attempts to further eliminate sound economic incentives for the state’s business community.
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CICI ANNUAL MEETING DECEMBER 6
CICI‘s Annual Meeting will be held on Thursday, December 6th, 2007, at the Holiday Inn Express O’Hare, Penthouse Ballroom, located at 6600 N. Mannheim Rd, in Rosemont. All CICI members are encouraged to attend. For more information and to register, follow this link: http://www.cicil.net/Flyers/annualmtg.html
The day’s events begin with registration and a continental breakfast at 8:30 a.m. followed by the General Membership and Board of Directors meeting. The election of new CICI board members and officers will also take place. Ted Cromwell of the American Chemistry Council will give a presentation on DHS Chemical Security Rules before lunch. This year’s Keynote Speaker will be Laurence Msall, President of the Civic Federation. Msall will discuss the financial disasters in Cook County and the City of Chicago. After lunch, there will be an awards ceremony and a Regulatory and Legislative Affairs Committee meeting.
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.
Headquarters: 2250 E. DEVON AVE., SUITE 239, DES PLAINES, IL 60018 · TEL :( 847) 544-5995 · FAX :( 847) 544-5999
Springfield: 400 W. MONROE, SUITE 205, SPRINGFIELD, IL 62704 · TEL :( 217) 522-5805 · FAX :( 217) 522-5815 |
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