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No, we’re not the worst

Wednesday, Nov 16, 2011

* Good news and mediocre news in Site Selection Magazine’s latest rankings

* Look, 21st overall ain’t great, but it gives the lie to the “We’re all gonna die!” rhetoric from those who claim Illinois is the worst state ever. And 2nd in new plant openings is a plus, even though our high population means our per million rate is also around the middle of the pack. Tax competitiveness is still not horrible, even after the January tax hike.

* And we’ll never be able to compete with states like Texas because, for the most part, as survey responses clearly show, Illinois doesn’t roll this way

* “a pro-business, entrepreneurial, right-to-work state”
* “no state income tax, ease of pulling permits, available work force”
* “the government makes it easy to do business”
* “Texas is progressive, fewer regulations”
* “willingness to work with business”
* “the tax climate, regulatory environment, incentive programs and work-force development efforts”
* “the state fights OSHA, EPA and other negative, useless regulations; no state income tax”
* “work-force availability, existing facilities and good economics for labor and facilities”
* “cooperation and flexibility of state and local officials; proactive in growing the economy.”

We can make it much eaiser to do business here, no question. But busting unions, killing off the income tax and fighting OSHA and EPA ain’t gonna happen. If that’s the climate you really want, then China or Mexico would probably be your best bets anyway.

…Adding…
Via a commenter, note that 11 of the 20 states that are ahead of us in overall points have worse tax climate rankings.

…Adding More… The Tribune editorial board, which is so sure of itself on so many other issues, goes all wobbly and equivocates on meeting CME Group’s demands

We honor CME’s long history in Chicago, where it pioneered the financial futures that became its mainstay, and created the stock-options industry led by CBOE Holdings. We honor Sears, which also has deep ties to this region. We appreciate all our headquarters companies, and we hope they realize their prospects are good in Illinois, despite the frustrating political dysfunction all around them. Their petitions for economic development incentives should be evaluated individually. The state needs to drive a hard bargain on behalf of taxpayers.

But let’s face it: Illinois is in trouble. Unemployment is at 10 percent, significantly higher than the state’s neighbors. It needs to entice and to retain employers in order to grow its tax base and put its citizens to work. For lack of more taxpayers, the state isn’t paying its bills. It isn’t addressing its spiraling pension costs. But it creates a fundamental sense of unfairness if it tries to bankroll incentive packages for every employer who whispers about moving. Trying to satisfy Duffy and his peers and avoid that sense of unfairness, the General Assembly proposed a grab-bag of special deals, tax cuts and revenue enhancers.

Incentive packages for individual companies have to rise and fall based on their benefit to the state, and they shouldn’t be shoveled through as part of some tax-cut Christmas tree that winds up costing the state hundreds of millions of dollars.

Nobody says being broke is easy. Illinois is finding out just how hard it is.

It’s weird that they can’t just come out and say what they mean.

* Other stuff…

* Chicago Latinos pay more in taxes than they get from government, study finds: Chicago-area Latinos pay substantially more in local taxes than they collect in education and other government services, according to a study being released on Wednesday by the University of Notre Dame. The report by the university’s Institute for Latino Studies says Hispanics pay $4.3 billion in direct sales, property and other taxes, and contribute another $724 million to stores and other businesses they patronize.

* New study shows local Latinos provide vital boost to the economy

* FutureGen-Ameren relationship could be resolved soon

- Posted by Rich Miller        


24 Comments
  1. - wordslinger - Wednesday, Nov 16, 11 @ 11:08 am:

    The U-haul folks will never let facts get in the way of their naturally negative disposition.

    Texas is so right-to-work that they’ve always welcomed with open arms low-wage undocumented workers from south of the Rio Grande. That group has been the main driver in the state’s population growth the last 10 years.

    Bad week for the deport-them-all crowd. You have the Illinois studies cited above, plus the Wall Street Journal has been running a series all week on the blessings of both legal and illegal immigration from Mexico.


  2. - Louie - Wednesday, Nov 16, 11 @ 11:11 am:

    How many right to work states are in the top 20?


  3. - walkinfool - Wednesday, Nov 16, 11 @ 11:13 am:

    Please note: this is a chart of the top half of states in ranking. Wisconsin and Missouri are not even in the top 25. So much for Illinois being “the worst state for business”.

    Good point that if you can justify no workers’ safety or environmental regulation, assuming that the mythical perfect marketplace will fix everything, then China, India, or SE Asia are for you. On the other hand we can learn a lot from other states on making the regulatory processes easier and more timely.

    Illinois is doing surprisingly well in bringing manufacturing back from the brink and even back from overseas, despite public perceptions. But we do need much better entrepreneurial and small business support, and continued growth in exports.


  4. - Yellow Dog Democrat - Wednesday, Nov 16, 11 @ 11:17 am:

    Thanks for the post Rich.

    As I said yesterday, Perception dominates much of our business “climate”. As long as Illinois executives keep spreading the story to other Executives that Illinois is hostile to business in order to advance their own tax break bill or political agenda, our entire economy will continue to suffer.

    Thus the schism between our new plant openings and executive rankings.

    Another great link in this month’s edition of Site Selection Magazine is this article, on how government can better work with the business community.

    There’s sound advice in there for Quinn and DCEO.


  5. - walkinfool - Wednesday, Nov 16, 11 @ 11:23 am:

    Also note that most of those states ranked better than Illinois still have a worse tax climate ranking. Taxes, while important as one part of the cost of doing business, are simply not among the biggest drivers when companies choose to stay or move.


  6. - Irish - Wednesday, Nov 16, 11 @ 11:55 am:

    And right after you build and nice new shiny plant and you are standing there watching the next Katrina come ashore or you are standing on a hill watching your home being swallowed up in a wildfire you are thinking maybe Illinois wasn’t so bad after all.


  7. - ratbstard - Wednesday, Nov 16, 11 @ 12:31 pm:

    Regarding “Chicago-area Latinos pay substantially more in local taxes than they collect…” I’d like to ask why the study couldn’t/didn’t differentiate between taxes paid by Citizens of Latin descent and those paid by IAs of Latin descent? I’m pretty sure it would make a BIG difference.


  8. - Yellow Dog Democrat - Wednesday, Nov 16, 11 @ 12:33 pm:

    The Tribune Editorial would have been much clearer-headed if theyd just said that business tax breaks should be decided within the Budgeting for Results framework. Lets measure the return on investment for taxpayers of giving Duffy $100 million a year versus say, cutting the high school dropout rate in half and see which program comes out on top.

    That said, I give the Tribune credit for not simply regurgitating talking points from CME and Sears. The tide has turned when big business cant even depend on the Tribune for a favorable editorial.

    This tax package is done, IMHO.


  9. - Ahoy - Wednesday, Nov 16, 11 @ 12:59 pm:

    “Texas is progressive, fewer regulations”

    What?


  10. - Yellow Dog Democrat - Wednesday, Nov 16, 11 @ 1:01 pm:

    Also, lets not forget that the Texas budget relies heavily on oil fees which are effectively paid by consumers in Illinois and elsewhere, and the last time I checked they still hadnt figured out how to close a $27 BILLION structural budget deficit. They are on a two year budget, but thats still a pretty big number.


  11. - VanillaMan - Wednesday, Nov 16, 11 @ 1:36 pm:

    Yeah!
    We aren’t the worse!
    Illinois is not the worse place for business!
    Hip Hip! Hooray!

    We merely suck, that’s all!


  12. - wordslinger - Wednesday, Nov 16, 11 @ 1:40 pm:

    Vman, as always, thanks for adding your knowledge and insight to the discussion.


  13. - 47th Ward - Wednesday, Nov 16, 11 @ 1:42 pm:

    VMan, first, the word you’re looking for is “worst” not worse. Worse is used when comparing one thing to another. Worst is used as the least good thing among several things being compared.

    Second, just admit you’re wrong and be grateful that things are better than you’ve been saying for so long. It’s actually a good thing that Illinois isn’t the “worse” state in the country as you’ve been claiming.


  14. - Yellow Dog Democrat - Wednesday, Nov 16, 11 @ 2:17 pm:

    Jeez Vman, even a hardcore partisan ought to be able to admit that being in the top half of the country doesnt “suck.”. And being 2nd in the country in new plant openings is actually pretty darn good.

    You need to get that chip out of your head.


  15. - Robert - Wednesday, Nov 16, 11 @ 3:24 pm:

    23rd in tax climate and better in that ranking than some red states like Oklahoma and Alabama - not bad at all!


  16. - Anonymous - Wednesday, Nov 16, 11 @ 3:40 pm:

    Strange ranking system in that some of the metrics look at gross transactions, instead of on an average or a ratio. Thus all of the top 10 states (by population) make the list, even California that scored a 11th, 37th, 47th and 49th in the 4 categories that weren’t based on gross transactions.


  17. - Just Me - Wednesday, Nov 16, 11 @ 3:46 pm:

    Now, now, Mr. Miller. Just a couple months ago you went off on a tirade about how “lists” can be made to show whatever it is the author wants to show. I’m just sayin…


  18. - dupage dan - Wednesday, Nov 16, 11 @ 4:06 pm:

    =We can make it much eaiser to do business here, no question. But busting unions, killing off the income tax and fighting OSHA and EPA ain’t gonna happen. If that’s the climate you really want, then China or Mexico would probably be your best bets anyway=

    Hmmm, comparing Texas to China and Mexico as far as the business climate goes. Nice touch.


  19. - mokenavince - Wednesday, Nov 16, 11 @ 4:14 pm:

    We sholud at least be ahead of Ohio,I was surprised we are in the top 25. Take a close look and notice what Executive’s think 25th and probly sinking.


  20. - Left Out - Wednesday, Nov 16, 11 @ 4:33 pm:

    Regarding “Chicago-area Latinos pay substantially more in local taxes than they collect…” I’d suggest a deeper look at the data. Most cities generate most of their income from direct taxes from individuals. However, they also need transfers from the state, for example for schools, and direct taxes on corporations, for example property taxes on factories, to balance their budget. Most cities in Illinois would run up a debt every year if they only relied on taxes for individuals who live in that town. There is also the fact, as pointed out in the story, that Latinos have lower average income which effects the amount of sales tax and income taxes paid.


  21. - Robert - Wednesday, Nov 16, 11 @ 4:43 pm:

    ==Now, now, Mr. Miller. Just a couple months ago you went off on a tirade about how “lists” can be made to show whatever it is the author wants to show.==
    I think you need to consider the source. This isn’t a study by a thinktank linked to either political party; it is a study by Site Selection Magazine.


  22. - Joeverdeal - Wednesday, Nov 16, 11 @ 5:23 pm:

    Perhaps the best thought to take away from this article is that Illinois is a state with great potential to improve.

    It goes without saying that Illinois’ government has failed to do many of the right things. It is probably fair to say that Illinois is hostile to business interests, generally speaking. It is also true that the problems that we are suffering now have the potential to cause us to change and to improve this state.

    I would not be surprised to see a greatly improved situation in a few years.


  23. - Demoralized - Wednesday, Nov 16, 11 @ 10:04 pm:

    Yes, Texas is what I would strive for. I particularly like the comment about the lack of regulation and taxes. What business wouldn’t want that? Don’t mind us behind the curtain, spouting pollution, paying low wages, making ourselves rich and not contributing to society through taxes. Great corporate citizens one and all.


  24. - VanillaMan - Wednesday, Nov 16, 11 @ 10:43 pm:

    Since my last comment was deleted, I better make myself clearer.

    It might be OK for just any old US state to rank where we do, but with the history of Illinois? Please - we must do as well as we have had in the past.

    Illinois should always be at the top. Chicago has always been a city that made things happen in the global economy. The fact we rank as we do is obviously insufficient.

    We may not be the worst, but we are definately failing even in comparison of where we have been historically.

    We ain’t Indiana.


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