Coali­tion kicks cronies in Spring­field show­down

Daily Southtown (Sunday) - - OPINION - Austin Berg Austin Berg, a writer for the Illi­nois Pol­icy In­sti­tute, wrote this column for the Illi­nois News Net­work.

The for­mula for bad eco­nomic pol­icy in Illi­nois is pretty sim­ple.

State law­mak­ers have the power to of­fer spe­cial priv­i­leges. Mon­eyed in­ter­ests from legacy in­dus­tries go to the state cap­i­tal in search of them. A few busi­nesses get pro­tec­tions, carve outs or sub­si­dies. Politi­cians get money, fa­vors or a new job.

But some­thing in­ter­est­ing just hap­pened on one of the most hotly con­tested bills of the year, with a legacy in­dus­try fight­ing to crush startup com­peti­tors pro­vid­ing needed in­come to nearly 10,000 Illi­noisans. Cronies lost.

The story started back in Fe­bru­ary. A bill on li­a­bil­ity laws in the car rental in­dus­try­was mak­ing itsway through the Illi­nois Se­nate. It wasn’t any­thing spe­cial, but a few amend­ments in May com­pletely trans­formed that bill into a weapon for com­pa­nies like En­ter­prise to pun­ish startup com­pe­ti­tion.

What com­pe­ti­tion? App-based busi­nesses like Ge­taround and Turo al­low ve­hi­cle own­ers to rent out their car to peo­ple look­ing for one. So for car rental com­pa­nies un­will­ing to adapt, smart­phones can cut into their role as mid­dle­man.

En­ter a bill that­would give Illi­nois the most dra­co­nian lawin the na­tion gov­ern­ing th­ese peer-to- peer car rental ser­vices, or “car-shar­ing.” Es­sen­tially, it treated car-shar­ing busi­nesses like tra­di­tional car rental com­pa­nies in all the ways that­would ham­per their suc­cess, in­clud­ing a crush­ing tax bur­den, but left out the spe­cial perks that tra­di­tional car rental com­pa­nies en­joy in Illi­nois, such as a sales tax ex­emp­tion on all the ve­hi­cles they pur­chase. With that bill on the ta­ble, car rental com­pa­nies primed the pump with plenty of money for both sides of the aisle. And voila, the bill ended up on Gov. Bruce Rauner’s desk.

Rauner’s ad­min­is­tra­tion saw which way the wind was blow­ing. Ve­to­ing the bill out­right meant they’d al­most cer­tainly get beat with an over­ride vote, given the bill passed with strong sup­port in both the House and Se­nate. So they brought to­gether a coali­tion, in­clud­ing car-shar­ing com­pa­nies like Ge­taround and Turo and busi­nesses with skin in the game like All­state and Gen­eral Mo­tors.

They came up with a frame­work of their own, and is­sued an amenda­tory veto in Au­gust. The new pro­posal kept the car­shar­ing tax bur­den rel­a­tively lowand en­sured the new in­dus­try could com­pete on a level play­ing field.

De Paul Univer­sity Pro­fes­sor Joe Sch­wi­eter­man, di­rec­tor of the Chad­dick In­sti­tute for Met­ro­pol­i­tan De­vel­op­ment, called the re­forms a “best prac­tice” for how states should deal with car-shar­ing. The orig­i­nal bill was “overly in­tru­sive” and “would have harmed thou­sands of cus- tomers.”

Car rental com­pa­nies weren’t go­ing to take that ly­ing down. The race for an over ride was on. Both sides of the fight ran ads in ma­jor po­lit­i­cal news­let­ters, fed hos­tile sto­ries to me­dia out­lets and tried to get cus­tomers in­volved in the fight, not to men­tion all the po­lit­i­cal money.

For­mer state Sen. Pam Althoff— a co-spon­sor of the car­share-killing bill— quit her job as a law­maker in Septem­ber, im­me­di­ately started a lob­by­ing busi­ness and took En­ter­prise as a client.

On Wed­nes­day, the dust set­tled.

En­ter­prise, Althoff and the other over­rid­ers didn’t have the su­per­ma­jor­ity votes they needed. The coali­tion beat the cronies. More rea­son­able reg­ula- tions are mov­ing for­ward.

For some peo­ple, the way spe­cial fa­vors are nor­mally doled out to spe­cial play­ers in Spring­field is called be­ing “pro-busi­ness.”

But true busi­ness friend­li­ness comes from things like sim­ple, equally ap­plied rules and good bang for your tax buck. Illi­nois is far from that. So it hangs around the bot­tom of small-busi­ness sur­veys and lags far be­hind the rest of the na­tion in jobs growth.

The car-shar­ing vic­tory is real busi­ness friend­li­ness. And that means Illi­noisans — whether or not they ever rent their car through an app— have cause for a lit­tle cel­e­bra­tion.

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