chicago paint & coatings association february 18, 2014 maggiano’s oak brook, illinois

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  • Slide 1
  • Chicago Paint & Coatings Association February 18, 2014 Maggianos Oak Brook, Illinois
  • Slide 2
  • Slide 3
  • State of Illinois $7 billion income tax increase in 2011 @$7 billion Pension Payment Current Fiscal Year $5.2 billion backlog of bills (as of 2/13/14) $233.7 million in states checkbook (as of 2/13/14) Before Pension Reform - @ 100 billion shortfall in state- funded pensions (teachers, state, university, etcdeficit growing at $17 million per day)
  • Slide 4
  • Loss of Revenue Since 1995 Illinois has lost 366,616 tax-paying households (806,054 people) Loss of $26.3 billion in taxable revenue 2012 Illinois is #2 in the nation where more people are leaving than arriving. #1 in 2011. In 2009 alone, 40,000 people left the state. Illinois has dropped from #6 in per capita income in 1998 to #16 in 2012 Illinois unemployment rate is 8.6%, higher than the national unemployment rate of 6.7%.
  • Slide 5
  • Largest Costs Structural Imbalance State Pensions, Medicaid, K-12 Education Pensions - $7 billion Medicaid - $7.3 billion Education - $8.95 billion flat through 2015
  • Slide 6
  • Tax Receipts 1 st Q FY 2014 (July-Oct.) - Operating Revenues increased by $486 million or 6.1% from FY 2013 - Individual Income Tax Revenues increased by 6% vs. FY 2013 - Corporate Income Tax Revenues increased by 13.4% vs. FY 2013 (Recently, House Speaker Mike Madigan proposed a 50% cut in Corporate Income Tax Rate from 7% to 3.5%) - Sales Tax Revenues increased by 7.7% vs. FY 2013 - Total Expenditures increased by $725 Million, or 9 % vs. FY 2013
  • Slide 7
  • Largest State Tax Exemptions as of 7/1/13 $1.96 billionRetirement & Social Sec. (I) $1.63 billion Food, Drug, Medical (S) $1.03 BillionStandard Deduction (I) $555 millionProperty Tax Credit (I) $405 million Tax-Exempt Organizations (S) $315 millionExemption from Trade-Ins (S) $259 millionFarm Chemical Exemption (S)
  • Slide 8
  • Largest Business Tax Exemptions $259 millionFarm Chemical Exemption (S) $219 millionIllinois Net Operating Loss Ded. (I) $183 millionManufacturing Machinery Exemp. (S) $142 millionGasohol Discount (S) $127 millionBiodiesel Discount & Exemption (S) $121 millionRetailers Discount (S) $116 millionNon Motor Vehicle Use (MF) 88% of all Exemptions are contained on these two pages
  • Slide 9
  • Other Tax Incentives Targeted Return to 3 factor income tax apportionment for non-service companies $70 million Repeal Research & Development (R & D) Tax Credit $13.2 million Eliminate the Manufacturers Purchase Credit (MPC) $37.7 million Decouple from federal accelerated depreciation (one-time revenue increase) $100 million Include Puerto Rico and outer continental shelf in definition of U.S. $30 million Require income tax withholding on gaming winnings over $1000 from non-residents $4 million Decouple from 2004 federal tax legislation (qualified production activities deduction) $53 million Repeal deduction for foreign and domestic dividends received by corporations $90 million End deduction for company owned life insurance $9 million Tax canned software $65 million Extend the insurance tax to industrial insurance $15 million Repeal exemption for fuel transported to out of state destinations (Stealth Gas Tax) $45-90 million Limit retailers sales tax discount $116 million
  • Slide 10
  • Challenges Going Forward Illinois Financial Problems Continue 2011 Tax Increase to Start Decreasing 2015. Will it be Extended? Unions and Progressive pushing a Graduated Income Tax. Will this proposal be on November ballot? Will it Pass? Pension Reforms Challenged in Court. Even if Constitutional, will savings be enough? Recently, a study reduced the cost savings to $145 Billion from $160 Billion.
  • Slide 11
  • Other Current & Future Issues Pet Coke Restrictions Corporate Income Tax Disclosure Fracking/Shale Gas/Price of Natural Gas (Leucadia) Chemical Regulation at State Level Chemical Bans Triclosan, BPA, Flame Retardants, Coal Tar Sealers, Polystyrene Containers Asian Carp/Chicago Waterway System/Mississippi River Illinois Pollution Control Board Opening
  • Slide 12
  • Paint Specific Issues PaintCare Program - Illinois Tax/Fee on Paint for HHW Collection Tax/Fee on Paint for Lead Abatement Tax/Fee on Paint for Window Replacement VOM Standards for Paint/Coating Products
  • Slide 13
  • Governors Race Republicans Rauner, Brady, Rutherford and Dillard Democrats Governor Quinn and Tio Hardiman
  • Slide 14
  • Possible Constitutional Amendments Term Limits/Changes Number of Legislators & Raises Threshold to Override Governors Veto - Term Limits 8 years total (effective 2015) - Reduces Senate from 59 to 41 members while increasing the House to 123 members from 118 members (effective 2023) - Increases threshold to override Governor to 2/3 from 3/5. Redistricting Commission draws Legislative Map (after 2020 census)
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