* I can’t say as I blame the company for its disgust with the state legislative process. Cat pushed hard for the reinstatement of the research and development tax credit, which is only $25 million, yet is quite valuable to a state with several pharmaceutical and manufacturing headquarters…
Caterpillar spokesman Jim Dugan said he saw some irony in the fact that “a week or two ago we see the state quoted as saying they’re interested in” in working with Cat to bring the new plant slated for the continent to the Land of Lincoln - with the 1,000 or so jobs expected to come with it - but then lawmakers reject the measure containing the tax credit that Cat hoped to receive.
“Contrasted with this expressed desire to have businesses grow here, to locate here, (this) is a disconnect that is unexplainable,” he said.
However, Dugan said a decision on the siting is not linked to the R&D tax credit, and in fact involves reviewing a number of criteria. A number of different locations within the U.S., as well as in Canada and Mexico, will potentially be vying for the plant, with a decision on the location expected by the end of the year.
Inaction on the tax credit “is an example of a much, much broader, deeper, fundamental issue and problem” for the state, Dugan said. “We have a state that’s clearly lost without a rudder in the midst of a company like Caterpillar with 23,000 employees in Illinois.”
The problem, Dugan said, is that “there’s no long-term stability” or predictability in state policy for the company to depend upon.
No argument here.
The R&D tax credit should never have been allowed to expire in the first place. And if an agreement on a broader tax package can’t be reached, it ought to be revived on its own.
And maybe that’s what the GA needs to do with the rest of the tax cuts anyway. Allow members to submit amendments and vote on these tax cuts individually, perhaps during a Committee of the Whole. There’s an agreement on the Sears tax break, so that may pass. The Democrats can pass the EITC proposal. Just about everybody would vote for R&D. And that Chicago theater tax break will probably die. The CME deal would be an interesting debate in and of itself. I’d like to see it.
* By the way, Chiquita is leaving Ohio, so you can bet that Ohio will be pushing hard on its $400 million relocation offer to Sears…
On Tuesday, Chiquita accepted a $22 million in tax incentives from North Carolina to move its world headquarters from Cincinnati to Charlotte.
“It hurts to lose yes. Especially when we are losing nearly 400 jobs,” said Cincinnati councilwoman Cecil Thomas.
“It’s disappointing for your city and it’s a loss income tax wise as well,” said Cincinnati councilman Chris Bortz.
Nearly 375 jobs will be transferred from Ohio to North Carolina by 2014. Chiquita executives have contemplated the move since September.
Sears may or may not be a dying company, but they are our dying company and their state tax break is pretty small in comparison to the overall budget.