Editorial: Corporate Illinois and the Illinois General Assembly are once again on a collision course.
The Illinois Senate approved 30-27 this week legislation, Senate Bill 282, that would require Illinois publicly traded corporations to file private tax disclosure information with the Illinois Secretary of State whose office would then make the information publicly available on the Internet.
Senate President John Cullerton (D-Chicago) says lawmakers need more information to make better decisions on Illinois economic development policy.
In a statement, Cullerton said:
“By increasing the tax transparency of publicly traded corporations, policy makers can make informed decisions that promote economic growth while increasing public accountability for the use of tax dollars. I look forward to working with the business community and the members of the Illinois House to advance these goals.”
The senate president claims that questions exist whether Illinois tax incentives and credits work as intended. Additionally, Cullerton says two-thirds of Illinois corporations businesses pay no corporate income tax. A fact that infuriates rank-and-file taxpayers.
Cullerton’s populist jab at Illinois corporations comes on heals of the controversy over Hostess’ Chapter 11 filing and the firing of 18,500 employees, which includes 1,415 Illinois workers.
Initially, Hostess attempted to hoist the blame for the company’s faltering finances on its unions. But it quickly emerged that Hostess asked a bankruptcy judge to approve a plan to pay $1.75 million in bonuses to 19 of its executives. Moreover, Hostess had granted its executives pay raises earlier this year, including a boost to the salary of the company’s chief. It tripled from $750,000 to $2.5 million.
The gratuitous greed and willful indifference by company executives to the public perception of the effect of lining their pockets poisons the public relations well and creates the conditions for legislation like Cullerton’s.
Needless to say, the Illinois Chamber of Commerce is bitterly opposed to Cullerton’s plan.
“Forcing corporations to disclose their income tax return information serves no valid public policy purpose, threatens the corporation to possible political scrutiny, and is another prime example of how the State of Illinois shows its bias against Illinois job creators,” wrote the Illinois Chamber in an action alert to its members.
And the Illinois Chamber is right.
The legislation aims principally to submit the Illinois corporations to political scrutiny without advancing job creation.
If they wish to have it, existing securities law already provides bundles of information to lawmakers with which to club corporations.
But is clubbing corporations or cooperating with them the best path to Illinois job creation?
While Hostess management shenanigans does nothing to reinforce confidence in Springfield that CEOs’ top priority is job creation, not executive compensation, Cullerton’s bill will do little to boost business confidence in Illinois.
When the Illinois House returns to Springfield next week, it should defeat the senate president’s legislation.