Traders disappointed tax break deal failed
November 30, 2011 (CHICAGO) (WLS) -- A big tax break for two of Illinois's largest employers is now on hold after the state legislature adjourned without acting on the measure.
As trading began Wednesday on CME Group's trading floors, news was fresh of an overnight vote from legislators to not grant CME Group or Sears tax incentives to stay in Illinois.
"If you move all the traders out of the state, you wouldn't believe what people spend on a daily basis," said Michael Mason, trader.
In addition to traders, thousands of jobs are connected to thriving trading floors.
"It would be devastating, not only the clearing firms or trading firms would move with them. You're going to want to be as close to the trading host engines like where the trades match as possible," said Tim Weingart, who works for a clearing firm.
Brokerage firm TD Ameritrade would stay in Chicago no matter what CME Group's plans are. But keeping the trading floors close may be an asset.
"A lot of the things that we get to do with the exchanges are because of the relationships over time and I'd hate to lose those because of something like this because it does benefit our customers over the long run," said JJ Kinahan, TD Ameritrade.
Some advocate for keeping CME Group here for the broader reputation of Chicago as a center for commerce.
"Chicago doesn't butcher many hogs any longer and one of the things for which it's famous is its financial markets and innovation created by the CME Group," said John Carpenter, Chicagoland Chamber of Commerce.
"The CME is going to what it needs to do. The CBOE will do what it needs to do, because if they're not safe secure and growing they are not going to survive," said Donald Schwartz, Loyola School of Business Administration.
Schwartz left the private sector for academia. Now watching from a distance, he expects there to be a compromise to keep CME Group in Chicago.
"I'm an optimist. I'm not convinced that something won't be agreed on. At the end of the day, let's put all the adults in the room and do what's best for us," said Schwartz.CME Group did not have a comment about the legislative inaction. Sears has said it hopes to decide to stay or go by the end of the year. Insiders tell ABC7 that a new round of discussions is beginning to find a compromise bill that would pass the legislature next month.
The CME Group is the state's largest corporate tax payer. The company wants its annual bill rolled back by tens of millions of dollars.
Sears, on the other hand, wants a 10-year, $150 million extension of its tax exemptions, but a deal may not come until early next year when the issue comes up again in Springfield.
"Clearly we are at an impasse, and so I think people are going to have to go back to the negotiating table," said Rep. Barbara Flynn Currie, Democratic House majority leader.
The failed legislation also included tax breaks for other businesses, in general, and for low-income families.
The bill is HB1883.
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