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* The group “Good Jobs First” has published a “primer” for journalists covering Texas Gov. Rick Perry’s job-poaching visit to Illinois…
1. Get the Hard Texas Jobs Numbers. They reveal that interstate job piracy is a costly fool’s errand. We issued a national study on this very topic in January, and it has passages devoted to Texas on pages 4-5 and 16-20. We document that Texas under Perry in his first seven years netted a microscopic 0.03 percent (three hundredths of one percent) of its jobs base annually from corporate migrations—at great expense given to a tiny share of footloose companies.
What is Perry doing to help existing Texas firms expand and new firms to start up? (Not to mention operate safely.) Does he know that more than 9,500 business establishments with more than 110,000 jobs moved out of Texas during his first eight years in office? Where did they go and why?
2. Master the Texas Subsidy-Industrial Complex. Learn how private dollars (TexasOne)—some of them from site location consultants who profit from corporate relocations—bankroll Perry’s job-piracy forays. Learn about the Texas Enterprise Fund, where two-thirds of subsidized companies have fallen short on jobs, and where a fourth of recipient companies have given money to Perry’s campaigns or political proxies. The Wall Street Journal [8/13/11] summed it up as “Rick Perry’s Crony Capitalism Problem.” And the New York Times wrote at length about tax consultant (and big Perry backer) G. Brint Ryan.
Which consultants are accompanying Perry to Illinois? How much do they get paid when consulting for footloose companies? How much money have they given to Perry’s campaigns and proxies?
* Meanwhile, everybody’s trying to get in on the act…
The Chicago area’s wealthiest investors are much more nervous about their state’s economy than counterparts elsewhere in the nation, according to a poll released Monday that reinforces concerns some companies may relocate if Illinois’ financial situation doesn’t improve.
The poll by Morgan Stanley Wealth Management comes on the same day Texas Gov. Rick Perry is scheduled to be in Chicago to try to lure businesses from the state with the promise of lower income taxes and a stronger economy.
Analysts and economic advisers say it’s another wake-up call for lawmakers who repeatedly have failed to solve Illinois’ $100 billion pension crisis and other financial problems.
The AP’s lede is more than a little breathless. There’s nothing in the poll that “reinforces” any concerns, other than the investors are not happy at all with the state’s finances and economy. Is anybody?
* You may be hearing a lot about this poll, so keep in mind who was really surveyed…
Survey Methods: as part of the national survey of 1,000 US investors, age 25 to 75, with $100,000 or more in investable household financial assets, an oversample of 302 Chicago area investors were interviewed. Approximately one-third of those interviewed had $1 million or more in household financial assets. Poll conducted Jan. to March, 2013, by GfK Public Affairs and Corporate Communications.
* From the poll…
Most Chicagoland investors are bullish about the global economy (74%) and US economy (70%) but those numbers drastically dip at the state level:
• A majority (58%) sees a worsening of the state economy by the end of this year.
• Only 16% believe the state economy will be better by the end of 2013 compared to 40% believing the global economy will be better and 45% feeling the same way about the national economy.
• Economic issues top the list of Chicagoland investors’ concerns. 93% are worried about the financial well-being of the state with 80% describing themselves as “very” concerned.
• Investors are most concerned with the pension crisis (52%), Illinois state deficit (20%), state taxes (13%) and budget cuts (8%).
And…
Investors want financial advice—specifically, communication and analysis. Nearly eight in ten Chicagoland investors (77%) use one or more financial advisors, and for millionaires the percent increases to 88%.
• 87% want guidance and resources on changes in the fed tax policy & exemptions
• 86% want guidance on their portfolio asset allocation
• 83% want clear communication on how assets can contribute to a retirement income stream
• 81% want new investment ideas; analysis of the economy and potential portfolio impacts; and downside portfolio protection
• 66% want guidance on estate planning to minimize tax effects on assets passed to heirs
And…
Millionaires are different
Investors with household assets of $1 million or more, who make up a third of poll respondents, are more likely to see improvement in their portfolios from 2012 (77% vs. 53% in lower asset group) and, predictably, are less concerned than HNW investors overall about:
• Funds to cover the unexpected (44% vs. 68%)
• The ability to retire when desired (28% vs. 58%)
• Living beyond one’s assets (36% vs. 55%)
• Funding a child’s education (23% vs. 48%)• Paying off the student loan debt of their spouse, children or grandchildren (12% vs. 27%)
In the opposite direction, millionaires are somewhat more concerned about the trade deficit (93% vs. 80%, overall), phase-out of personal exemptions and deductions (93% vs. 86%, overall), volatility in the stock market (87% vs.78%), and terrorism (82% vs. 74%).
From an investing perspective, millionaires are also more bullish than HNW investors overall on real estate for purchasing a second home (50% vs. 39%) and on investing in REITs (51% vs. 39%).
* Crosstabs are here.
*** UPDATE *** From Treasurer Dan Rutherford…
“Here in Illinois, we have all the factors needed to create a great business climate. We have a tremendously skilled workforce, an excellent transportation system, a wide variety of natural, cultural and recreational resources, great agricultural success and strong educational institutions to name a few assets. Though the state has many strong points, it is no secret that Illinois’ financial flaws are a downfall for business owners and residents. We have the worst credit rating in the country, a broken pension system and taxes have increased in recent years on businesses and individuals.”
“Texas Governor Rick Perry’s attempt to get Illinois businesses to move to Texas should sound an alarm to state leaders. We need to improve our business climate so we can better retain and attract businesses. We have some issues now, as highlighted by Gov. Perry, and we should make every effort to create a better environment where businesses can thrive right here in Illinois.”
* Related…
* Cahill: Consider Texas — carefully
* Perry in Illinois to lure business: On Tuesday, he’ll speak at the 2013 BIO International Convention in Chicago. The event draws business people from around the world and Perry will talk at an afternoon session about state legislative practices that support bioscience economic development.
* Editorial: Ignoring warning would be foolish
* Erickson: Quinn awash in advice for big-talking Texans: “His state, frankly, is water-challenged, and any company thinking of going to Texas better check on their water,” Quinn said. And then came the rains. And the flooding. And by Friday, Quinn was forced to issue a disaster declaration covering 38 water-soaked counties.
* Finke: Quinn tells Perry to butt out
* Editorial: Hey, Gov. Perry: Don’t mess with Illinois
* Illinois House approves bill to loosen workplace online privacy restrictions: The Illinois House on Friday voted to give employers more authority over employees’ online activity by allowing employers to request access to personal Internet accounts. The bill, sponsored by Rep. Jim Durkin (R-Western Springs), passed by a 68-36 margin, with two voting present, and now moves to the Senate.
* Editorial: Put Illinois to work - The stall on fracking is a job-killer
posted by Rich Miller
Monday, Apr 22, 13 @ 11:33 am
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“The group” Good Jobs First. Looks like some labor/left wing front group. I notice Rich didn’t tell us this.
Comment by PirateBill Monday, Apr 22, 13 @ 11:38 am
Texas’ “business-friendly climate” includes so little regulation that you can build a bomb factory - I mean a fertilizer plant - next to a couple of schools amd a nursing home. And the state can only investigate if there is a complaint.
Yes, move to Texas and do whatever the heck you want to do. They don’t care as long as your going to invest. Texas is open for business.
Comment by 47th Ward Monday, Apr 22, 13 @ 11:44 am
PirateBill, if you look for a conspiracy, you’ll always find one.
Comment by Rich Miller Monday, Apr 22, 13 @ 11:44 am
If Texas is doing better economically compared to states like Illinois, because it’s “pro-business,” why is Perry here, appearing desperate to take our jobs?
Also, to state again, Gov. Christie was trying to poach Illinois jobs when the state income tax increased. I believe Gov. Walker might have been up to the same thing. Well, their states are not doing so well. They offered big corporate breaks and did major budget cuts, and they don’t have much to show for it.
I believe that as part of its “rebranding” effort, the GOP should seriously consider changing its position on top-down economics.
Comment by Grandson of Man Monday, Apr 22, 13 @ 11:54 am
Rahm Emanuel: “I hope he remembers all three of the reasons” he’s coming to Illinois.
– MrJM
Comment by MrJM Monday, Apr 22, 13 @ 11:55 am
Blsssed with high-priced oil and defense spending, Texas has enjoyed a proportionally larger increase in population and jobs than the rest of the country.
But while the rest of the country has been shedding public sector jobs, the growth in government jobs in Texas has been twice that of the private sector.
He’s just another ego-tripping governor using taxpayer funds to churn out press releases on “job creation.” There are another 49 in the country.
This one’s also running for president on the state dime.
http://online.wsj.com/article/SB10001424053111903999904576470232177476242.html
But public
Comment by wordslinger Monday, Apr 22, 13 @ 12:05 pm
Not to ruin the food fight between chicago democrats and texas republicans but the state of new york has been running a rather expensive and extensive ad campaign in chicagoland for weeks now delivering the same message that perry has to Illinois businesses in not so subtley hinting at the greater opportunity for them in new york state.
When you consider the buffoonish leadership of this state and the city of chicago/cook county over the last decacade, the fact that leaders from both parties and other states are trying to raid businesses it’s not a shock.
Comment by shore Monday, Apr 22, 13 @ 12:26 pm
Shore, unless there’s a new spot, New York is promoting it’s state, not dissing on any others.
Perry’s on a big-city tour meeting potential donors on the state dime. He’s been to LA and the Bay Area, and now Chicago. You can bet Wall Street is one the agenda.
Comment by wordslinger Monday, Apr 22, 13 @ 12:31 pm
- shore - and - wordslinger -
That same ad is running in the Springfield market, interestingly. Also, until the end, it sort of feels like a tourism ad.
Comment by Cheswick Monday, Apr 22, 13 @ 12:34 pm
“’High Rate’ Income Tax States Are
Outperforming No-Tax States” by the Institute on Taxation and Economic Policy (ITEP)
http://www.itepnet.org/pdf/junkeconomics.pdf
Granted, one can find statistics to support whatever their point of view is - but this report is an interesting read.
Comment by Joe M Monday, Apr 22, 13 @ 12:43 pm
This is a heck of a lot of press Perry is getting for a $38,000 ad buy and a visit to a national conference…
Comment by youre-it Monday, Apr 22, 13 @ 12:56 pm
We have had these economic woes for how long? What has been done to address them? Does anyone believe that our economy is going to get any better?
Comment by Jerome Horwitz Monday, Apr 22, 13 @ 1:06 pm
guess you could write a whole chapter on operating a company in Texas that ignores regulations that could lead to a building exploding.
Comment by Amalia Monday, Apr 22, 13 @ 1:06 pm
I think I saw in Politico or something that Illinois is the Republican Governors Assoc. number one target for conversion in 2014. I wouldn’t be at all surprised to see more of these visits between now and November ‘14
Comment by Joe Bidenopolous Monday, Apr 22, 13 @ 1:24 pm
To be fair, 47th, the fertilizer plant used to be out of town. The town allowed a nursing home and the schools to be built next to it. It’s just a lack of zoning laws, probably.
Comment by Chavez-respecting Obamist Monday, Apr 22, 13 @ 1:41 pm
If you read the Good Jobs First report on the biggest corporate relocation/retention deals you discover two interesting facts:
1. Many of these deals (including the Sears deal, which is #2 on the list) ended with the company deciding to stay put… which was probably their intention/desire all along, but they used the threat of moving to extort, er, obtain as many tax breaks and other goodies as they could get.
2. Of those deals that concluded with a company moving from one state to another, most simply moved to an adjacent state, and usually within the same metro area (e.g. NY/NJ or KS/MO). Cross-country moves are relatively rare.
Comment by Secret Square Monday, Apr 22, 13 @ 1:47 pm
You’re probably correct CRO, but the fact remains that state regulators were prohibited from investigating potential problems at this facility in the absence of a complaint, including knowing how much ammonium nitrate was on-site and whether the company was following safety regulations.
Comment by 47th Ward Monday, Apr 22, 13 @ 1:49 pm
=== Investors are most concerned with the pension crisis (52%), Illinois state deficit (20%), state taxes (13%) and budget cuts (8%). ===
Poor millionaires, they’re worried that the big bad pension boogeyman is going to get them. Are they afraid that someone is going after their freebies and loopholes to cover the pensions that are legally due? Or are they worried that this may remind private sector workers that their own pensions got ripped off by these people?
Comment by Norseman Monday, Apr 22, 13 @ 2:04 pm
Yes, that’s true also, 47th. It was pretty much a bomb plant, as you said in your original post. One that the municipality allowed vulnerable people to live and work near. Because you know, keeping people safe shouldn’t be a priority.
Comment by Chavez-respecting Obamist Monday, Apr 22, 13 @ 2:18 pm
WRT: “…Learn about the Texas Enterprise Fund, where two-thirds of subsidized companies have fallen short on jobs, and where a fourth of recipient companies have given money to Perry’s campaigns or political proxies….”
Sounds like the subsidies Sears, Motorola, the CME group, etc… recieved to stay in illinois under the to create or save jobs banner. Many of which turned around and performed layoffs and closing instead.
Like we don’t have the exact same thing happending here with politicians picking and choosing the winners and losers based upon who gets a tax break and who doesn’t — who gave a campaign doantion and who didn’t.
Crone-ism capitoll of the nation Chicago is.
Comment by anon Monday, Apr 22, 13 @ 2:27 pm
Wonder if Bruce Rauner got to participate in the millionaire poll.
Also good for Rutherford for not falling into the trap of bashing Illinois and making it seem like he’s rooting against Illinois at the same time he addresses outside criticism of the state.
Comment by hisgirlfriday Monday, Apr 22, 13 @ 2:30 pm
You know if Treasurer Dan Rutherford actually believes that Illinois has all these great things to attract businesses then why does the politcal apparatus feel it necessary to give-in to the corporate terrorist that demand tax breaks while holding their employees hostage?
Comment by anon Monday, Apr 22, 13 @ 2:49 pm
Good point Norseman. Did anyone else notice the quotes in the article from Lawrence Msall? I’m sure the outcome of the poll was not due to the IPI’s involvement , nor their desire to cut and/or outright eliminate government pensions in the future ?
Comment by Roadiepig Monday, Apr 22, 13 @ 2:53 pm
A quick look at Google Earth images will confirm that many Illinois agricultural communities have fertilizer plants in the midst of residential and commercial areas. There is very little difference in that regard between Illinois and Texas.
The thing that bothers me about discussions on the issues raised by Governor Perry’s visit to Chicago is that so many of us are so defensive about it. We should admit our shortcomings more readily. When it comes to progress in business, we are inferior to Texas in certain ways.
Illinois should focus on ways that it can improve and become more competitive. Our state is beautiful. Texas is ugly. Surely, our state government can focus on ways to improve the business climate here.
Comment by JoeVerdeal Monday, Apr 22, 13 @ 3:10 pm
–thing that bothers me about discussions on the issues raised by Governor Perry’s visit to Chicago is that so many of us are so defensive about it. We should admit our shortcomings more readily.–
If you’re in business and a competitor is trash-talking about you to an existing customer, you hit back.
The whole concept of raiding parties is pathetic. Again, it’s just ego-tripping to churn out press releases.
Comment by wordslinger Monday, Apr 22, 13 @ 3:19 pm
And so here comes yet another yahoo governor to tell Illinois business leaders the reasons they should move to his economically challenged state. Of course, in this case, it’s a governor who probably forgot what was on that list of reasons before his plane even lifted off the runway in Texas. But despite the less than perfect government Illinois (and every other state, including Texas) has, there are some important things to remember: One, Illinois ranks 15th among U.S. states in gross domestic product per capita, while Texas ranks 24th. Two, as Rich has pointed out before, Illinois has the fewest state government employees per capita in the country, almost 33% lower than Texas. Three, despite the perception that exists in some quarters, Illinois’ per capita state tax burden ranks just 30th in the country. Four, Chicago alone has the third largest gross metropolitan product in the U.S. and was recently ranked fourth among the world’s cities in the Martin Prosperity Institute’s Global Economic Power Index. It’s no wonder jealous governors looking to make a splash come to Illinois looking for a little business; after all, if you’re gonna go fishing, you want to go to the lake where the fish are.
Comment by OldSmoky2 Monday, Apr 22, 13 @ 3:29 pm
Did Larry Msall (or Tylenol Fahner) give up their State pensions before raging about them?
Comment by Arthur Andersen Monday, Apr 22, 13 @ 5:38 pm
I think we need to be very careful about whether and how we participate in a race to the bottom with southern right-to-work states. One thing I have noticed about high-level corporate executives: they may move their jobs to Podunkville at $11.50 and hour, but they tend to keep the corporate suites and themselves in more genteel locations
Comment by steve schnorf Monday, Apr 22, 13 @ 6:03 pm
A hundred years ago, no one in Illinois worried a bit about Texas. There is a reason or two why we do today.
Kvetching about Texas is juvenile.
Comment by VanillaMan Monday, Apr 22, 13 @ 8:09 pm