The chief executive of Chicago’s biggest homegrown bank says the city’s business community expected the state to hike taxes, but that the Illinois legislature needs to also quickly address spending that’s contributing to deep budget deficits.
Illinois’ corporate income tax rate recently rose from 4.8 percent to 7 percent. Earlier this week Northern Trust Corp. said it expects the tax hike to reduce its earnings by about $4 million a year.
In an interview Friday morning on Bloomberg TV, Northern Trust Chief Executive Frederick Waddell was asked whether the state’s decision to battle its budget problem through tax hikes would hurt the Illinois economy and drive companies from the state.
“You’re already seeing a lot of border skirmishes with Wisconsin and Indiana, who look at the decision to raise taxes in Illinois as an opportunity to take business out of Illinois,” Waddell said.
He suggested that Chicago’s business community is looking for more leadership from the state on the spending side of the ledger.
“I don’t think anybody here in the business community in Chicago felt we could get by without raising taxes,” Waddell acknowledged. “The Issue, though, is around spending.”
Besides raising taxes, “there’s not a commitment to address the deep budget deficits that face Illinois,” Waddell said. “That’s the issue the legislature in Springfield needs to address pretty quickly.”
Waddell also was asked by Bloomberg TV about President Barack Obama’s decision to name General Electric Co. Chief Executive Jeffrey Immelt to replace Paul Volcker as head of the president’s outside panel of economic advisers.
He called Immelt a “great leader,” and said his appointment as head of the outside panel “marks a change indirection from economic recovery to economic growth.”
“Being competitive in creating jobs in the United States is the No. 1 issue we face today, and I think Jeff, given his experience at GE, will do a terrific job,” Waddell said.
Separately, Waddell, who attended a Thursday night dinner in Chicago for Hu Jintao, said the Chinese president’s remarks at the dinner were “warm and welcoming.”
byerak@tribune.com
Illinois was 48th out of the 50 states in job growth even before the income and corporate taxes were raised. The higher rates put us at more of a disadvantage not necessarily against our border states that have similiar tax structures but against FL, TN, TX and other states that have no income taxes along with Governors who are aggressivly cutting spending and regulations. Even liberal Gov. Cuomo in New York is saying up to 15,000 state employees will go along with spending cuts. It will be interesting to see in a year or so which model works best. The tax and continued spending model of IL or the “lean and mean” model many other states are implementing.
I am proud to say I’m moving out of IL.
YAY!