With the economy the way it is, just about every state in the country is frantically scrambling to keep their local corporations from leaving or attracting new jobs by doling out huge government incentives.
Illinois, of course, is a special case, which means it’ll probably cost us lots more to keep and attract jobs than just about any other state.
Our years-long political civil war between former Gov. Rod Blagojevich and House Speaker Mike Madigan during the worst international economic crisis since the Great Depression saddled the state with migraines for years to come. No problems were solved or even addressed while everything was collapsing around them during their fight to the death. By the time Blagojevich was finally arrested, impeached and removed from office, the state found itself with a $9 billion hole in its budget.
Blagojevich’s criminal reputation and our horrific financial problems have made us a national laughingstock. The recent income tax hike passed by the General Assembly and signed into law by Gov. Pat Quinn prompted other governors to openly deride us and publicly (and privately) goad our employers into leaving.
Our extremely high workers’ compensation costs (2nd in the nation) were treated to a nasty media spotlight with the uncovering of a workers’ compensation scandal at a state prison. Hundreds of state workers filed for and received big workers’ comp checks because, they claimed, turning heavy cell-door keys gave them carpal tunnel syndrome. Even worse, the state didn’t attempt to find out if most of those workers had filed valid complaints. The howls of derisive laughter could be heard far and wide.
We’re such a popular punching bag that Missouri actually appealed a lawsuit all the way up to the United States Supreme Court to insist that protecting some of its farmland in a federally designated Mississippi River flood zone was infinitely more important than the 80-year-old Army Corps of Engineers plan to save Illinois towns along the river from drowning. The delay caused by that lawsuit may have resulted in the severe flooding of at least one southern Illinois town.
So, when Motorola Mobility said it might move away, it got $100 million in state tax credits. Gov. Pat Quinn claimed afterward that the company had to pledge to invest $500 million in research and development, but that investment was apparently the company’s plan all along, no matter where it went.
Groupon, the fastest growing company in America last year, barely had to glance at other states and got $3.5 million in pledged tax credits from Gov. Quinn.
Caterpillar’s CEO sent a letter to the governor revealing that the company was being recruited to move to another state. That caused the entire establishment to suffer a collective nervous breakdown, and the media, of course, had a field day. Never mind that the CEO later said he had no intention of moving and wanted to work to make his state a better place to do business. The media’s theme was firmly established, so it was just too easy to just write stories and columns about Illinois’ impending doom.
The latest threat to move elsewhere is from Sears.
Twenty-one years ago the company was loaded up with millions in state and local tax incentives to stay in Illinois. But those incentives are expiring next year and the struggling, aging behemoth has its hand out yet again.
If Illinois doesn’t pay up, Sears could move its headquarters away, taking 6,000 direct jobs with it and costing us thousands more jobs via suppliers, contractors and businesses which rely on Sears employees for their livelihoods. The economic and tax implications would be huge. So, since it would cost far more to let Sears leave than to keep it around, expect a juicy deal to be put on the table.
Face it, we’ve made our own bed here and now we’re being held hostage and there’s almost nothing we can do about it except to try to cut the best deals possible.
It’s distasteful as all get-out, but we’re basically left with no good choices. And the more deals we cut, the more deals we’ll have to cut. Until we can overcome our serious, long-standing problems, we’re at their mercy — and corporate CEOs are not generally known to have an abundance of that human quality.