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* Indiana handed out several million dollars to take a small manufacturer away from Illinois…
Indiana Gov. Mitch Daniels joined executives from Illinois company Modern Drop Forge Tuesday to announce it is building a new facility in Merrillville, Ind.
Daniels said his state has offered Modern Drop Forge an incentive package worth $5.5 million over the next few years. The company will open a new manufacturing facility, creating up to 240 jobs by 2014. […]
Daniels invited the company executives to a mock citizenship naturalization ceremony Tuesday to welcome them to the state.
How cute. A “citizenship naturalization ceremony.” Excuse me, but when, exactly, did Indiana secede?
* Anyway, Indiana’s subsidy works out to just under $23,000 per job, spread out over three years. Then again, Daniels has grossly inflated job creation numbers in the past, so those numbers should probably be taken with a big grain of salt. Indiana has much lower workers’ comp costs than Illinois does, and that was one reason why the company moved…
Blue Island Mayor Don Peloquin says in this company’s case, workman’s comp differences alone will save several hundred thousand dollars a year.
“They’re looking at dollars. If it costs this much here under the workers comp law, when they go to Indiana, they drop it by 30 or 40 percent. They save that much money,” Peloquin said. “There’s very little a local mayor can do.”
* Illinois’ higher costs of doing business means that our subsidies probably have to be higher. For instance, Motorola’s state subsidy to remain in Illinois works out to about $44,000 per employee spread out over ten years. Even so,Mayor Emanuel just announced 200 new subsidy-free jobs for Chicago. Most of Emanuel’s job announcements, in fact, have involved no subsidies.
* Gov. Pat Quinn said he offered an incentive package to Modern Drop Forge, but no luck…
Illinois Gov. Pat Quinn said he wanted Modern Forge to stay in Illinois and the state made a “generous” offer to the company to stay, but Quinn said it’s the company’s choice to leave.
* Meanwhile, Quinn was on Chicago’s South Side today, touting a new public works project that will benefit Ford, which is also kicking in some cash…
A new construction project on the Southeast Side will alleviate the frustration of motorists caused by lumbering freight trains — and create 1,200 new jobs, officials say.
The $146 million project will lower the intersection of 130th Street and Torrence so two new bridges carrying the Norfolk Southern railroad tracks can pass over it, Gov. Pat Quinn announced Tuesday morning. The streets and the tracks currently intersect, resulting in hours of delays for about 32,000 motorists a day, officials said. […]
The project is partially funded by Ford Motor Company, which has an assembly plant nearby that regularly experiences 20-minute delays as employees and trucks carrying goods wait for trains to pass.
“Every minute counts,” said Ford spokeswoman Mary Culler. “We cannot be competitive without state-of-the-art infrastructure.” […]
The state of Illinois is paying $64.8 million of the price tag, and Norfolk Southern, federal government, city and Northern Indiana Commuter Transportation District are contributing as well.
* The Quinn administration is doing everything it can to tout new jobs today, including this IDES press release…
The Illinois Department of Employment Security (IDES) and Aon Corporation (NYSE:AON) have come together to place more than 100 job seekers in good-paying jobs at the Chicago-based professional services firm. The collaboration highlights Governor Pat Quinn’s efforts to grow jobs and connect qualified job seekers with ready-to-hire employers.
“Aon is a leading Illinois company, and a perfect match for Illinois’ highly skilled workers,” said Governor Quinn. “This is a great example of how our state and private businesses can work together to connect businesses, workers and jobs.”
“We sought the assistance of the Department of Employment Security to help us identify qualified and talented candidates, and they exceeded our expectations in a quick and efficient manner,” said Greg Besio, Aon’s chief human resources officer.
Working with the IDES’ Employment Services division, Aon was able to hire benefits advisors to work out of its Aon Hewitt office in Lincolnshire. The temporary employment is expected to last through mid-December and pay between $17 and $20 an hour.
* In other business-related news, both the RTA and the City of Chicago filed lawsuits today against Kankakee and Chanahon over lost sales tax revenue. The governments are upset that these small towns have allowed sham sales tax havens to be set up, which the towns profit from. Here’s the mayor’s press release…
The City of Chicago today filed a lawsuit in the Circuit Court of Cook County seeking damages from the City of Kankakee, Village of Channahon and three brokers over a sales tax kickback scheme that is diverting sales tax revenue from the City of Chicago.
“Companies are gaming the system and cheating Chicago’s taxpayers,” said Mayor Emanuel. “I have to be the voice for the taxpayers and I will not tolerate this.”
The City alleges that Kankakee and Channahon have attracted a large number of corporations and an enormous amount of revenue by offering Illinois retailers kickbacks of sales tax revenue if they purport to process their retail sales through brokers set up in those municipalities. The brokers “accept” sales in Kankakee and Channahon on behalf of the retailers. Although this practice was prohibited by the Illinois legislature in 2004 but both municipalities continue to enter into such arrangements.
This practice is so profitable that Kankakee and Channahon now lead the state in annual retail sales per capita at $78,000 and $62,000 respectively—tenfold the per capita sales of Chicago and roughly double the per capita sales of municipalities that are home to major retail shopping malls.
I get the part about the ridiculous sham sales offices designed to avoid the Chicago-area’s high sales taxes. The state definitely needs to get rid of those.
But Kankakee does a lot of business with out of state companies which have no Illinois facilities and need a local sales tax nexus. Those out of state agreements are certainly inflating the tax receipt numbers used by Chicago. I may have more on this in a little while, so check back.
Chicago’s lawsuit is here. The RTA’s lawsuit is here.
posted by Rich Miller
Tuesday, Aug 23, 11 @ 1:39 pm
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But at least the workers’ comp. lawyers are all staying in Illinois. We take our victories where we find them.
Comment by Skeeter Tuesday, Aug 23, 11 @ 1:52 pm
I take a train that every day goes by/over one of these underpass projects in Downers Grove, how in the heck does someone conclude this creates 1,400 jobs? Is this 1,400 people who were unemployed who will now be employed? Seriously, these construction project job numbers seem to be the product of the same mind that names pharmaceuticals.
Comment by OneMan Tuesday, Aug 23, 11 @ 2:02 pm
These Hoosiers crack me up, they act like such machers.
Facts:
Illinois GDP in millions: $644,200 — 5th nationally
Indiana……………………..$267,600 — 16th nationally
Much maligned Michigan, by the way, has a much larger GDP than Indiana, at $372,400 millions
Illinois per capita GDP…$50,238, 15th nationally
Indiana……………………..$41,169 36th nationally
Big talkers.
Comment by wordslinger Tuesday, Aug 23, 11 @ 2:37 pm
Does it surprise anyone that Illinois, a large state, has a bigger GDP than Indiana, a relatively small state? I think the better questions are which state is growing economically, has a lower unemployment rate, has a more attractive business climate and has a stronger balance sheet. I doubt Illinois is doing very well in those areas, particularly compared to Indiana.
I won’t even get into the question of which state has a smarter and more competent governor.
Comment by Jim Tuesday, Aug 23, 11 @ 3:27 pm
Is that how it works, Jim? People just populate a state willy-nilly, irregardless of the economic opportunities? Silly me, I thought they went hand-in-hand.
But if Indiana is such a swell place to do business, why aren’t more people getting in on the action?
Comment by wordslinger Tuesday, Aug 23, 11 @ 3:35 pm
wordslinger,
Which state was it that lost a Congressional seat?
Comment by Cincinnatus Tuesday, Aug 23, 11 @ 3:49 pm
=irregardless=
Regardless or irrespective.
Double negatives don’t become you, word.
Comment by dupage dan Tuesday, Aug 23, 11 @ 4:44 pm
The construction at 130th and torrence to lower the street will create 1200 jobs. Cmon what are they doing this with handshovels and pails. Talk about Daniels inflating jobs numbers Quinn is more crazy than I thought if he thinks this will create 1200 jobs.
Comment by fed up Tuesday, Aug 23, 11 @ 5:34 pm
Nexus is not something that out of state companies need. It is something they have based on their operations in Illinois which may or may not include permanent facilities. There would be no reason for a company to establish an Illinois location purely for the purpose of establishing nexus.
Out of state retailers who do not have facilities in Illinois collect state use tax (6.25% or 1%) from their customers either because they are required to by law or have volunteered to collect it. State use tax is apportioned out of one big fund allocated based on a set percentage and is not tracked by locations within Illinois, so those sales would not affect Kankakee’s taxable retail sales per capita.
Comment by Pelon Wednesday, Aug 24, 11 @ 7:30 am
First New Jersey ran its ads in Illinois acting as if IL was bad for business. The other day I heard a few ads on a Chi sports talk station for South Dakota.
Gee, I wonder which GOP governors don’t have presidential aspirations.
Comment by Kasich Walker, Jr. Wednesday, Aug 24, 11 @ 9:57 am