June 11, 2011
By Ted Regencia
CHICAGO — Illinois Governor Pat Quinn vowed Thursday to address the concerns of the Chicago Mercantile Exchange (CME), following reports that the world’s largest options and futures market is considering moving some of its operations out of Chicago over the issue of higher corporate taxes.
“I really believe that the best place for these markets is right here in Illinois,” said Quinn during an event promoting the state’s bio-technology innovation. “I’m sure we can work together. If somebody has a particular issue, or concern, or interest in something, we sit down with them and work it out.”
At the same time Quinn rejected concerns that the temporary tax hike he signed into law last January is driving many businesses out of Illinois.
“I don’t think anybody likes paying taxes,” Quinn said. “But that’s the price of having a democracy. Paying taxes is something necessary.”
On Wednesday, Chicago’s business landscape was shaken following news published in the Chicago Tribune, that CME executive chairman Terrence Duffy hinted of a possible relocation saying the company is “investigating what would be in the best interests of our shareholders.”
An actual move by CME, which has been in Chicago for more than a hundred years, or even parts of its operation, would be seen as a major setback for Illinois, which is still reeling from the effects of the economic slowdown and dealing with high unemployment.
The series of events started in January, when the state raised the corporate income tax rate temporarily from 4.8 percent to seven percent. Another 2.5 percent in personal property replacement tax is also affixed.
That new taxation rules prompted many corporations to complain about higher taxes and issue threats of leaving the state.
Last March, the equipment giant Caterpillar, which employs 23,000 in Illinois said it is consider offers to relocate to other states.
Illinois was also forced to extend 100-million-US-dollars in tax break over 10 years to Motorola Mobility to keep the cellphone company from fleeing its headquarters here.
But some analysts suggest companies are making an excuse of the tax increase to issue threats of leaving the state, and thereby forcing the state to extend more tax breaks as in the case of Motorola.