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At the same time Illinois lawmakers are expected to debate a plan to strip retirement benefits from teachers, prison guards and university employees, they also may take up a proposal to deliver tax breaks to one of the state’s biggest corporations.
Four days after Decatur-based Archer Daniels Midland Co. announced plans to move its headquarters and 100 top executives and support staff out of Central Illinois, legislation was filed that would give the company financial incentives to keep its corporate address within Illinois.
* It gets even “better” than that. As I mentioned briefly to subscribers this morning, David Ormsby’s Illinois Observer reported today that another tax break bill is now in the hopper to benefit insurance giant and Schaumburg-based Zurich North America (click here to subscribe to Ormsby’s publication).
Chief Executive Officer of Zurich North America and Regional Chairman is Michael Foley.
And wouldn’t you know it, Mr. Foley also sits on the board of directors of the Civic Committee, which as we all know has been pushing hard to reduce pension benefits for public employees and retirees.
The comments pretty much write themselves.
* Related…
* Manar: ADM package offering ‘tens of millions’ in state tax breaks ‘unprecedented’
* Fight brewing over tax breaks to keep ADM in state
posted by Rich Miller
Tuesday, Oct 1, 13 @ 9:47 am
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Rich once again the Napoleonic quote comes to mind-”Morality is on the side of the heaviest artillery”.
Comment by Rolo Tomassi II Tuesday, Oct 1, 13 @ 9:55 am
GOP Extortion seems to extend to the state level as well as the federal level. It should be responded to in exactly the same manner. We don’t negotiate with or pass bills to benefit blackmailers.
Comment by PublicServant Tuesday, Oct 1, 13 @ 9:55 am
Another nail in the coffin of the argument for police powers in cutting pensions…
Comment by Realist Tuesday, Oct 1, 13 @ 9:57 am
Yes, Ironic.
HDEMS are taking necessary steps to save good private sector jobs; while HGOP’rs fights to save taxpayer funded DOC, DOT and DNR jobs.
Comment by Anon2 Tuesday, Oct 1, 13 @ 9:57 am
There is plenty of money available for SOME in this state. For other groups of citizens, the party line is that WE ARE BROKE, isn’t it? I wonder what it will take for people to wake up and demand that the corruption stops.
Comment by Anonymous Tuesday, Oct 1, 13 @ 9:57 am
Boy, these people don’t hate government when they have their hands out for corporate welfare. The hypocrisy is astounding.
Comment by Grandson of Man Tuesday, Oct 1, 13 @ 9:58 am
We are in the middle of the biggest redistribution of wealth to the wealthiest among us. When will the majority stand up and say enough?
Comment by RetiredStateEmployee Tuesday, Oct 1, 13 @ 10:06 am
Nice post Rich. Thanks.
Comment by Aha momment Tuesday, Oct 1, 13 @ 10:07 am
Yes, RSE, when will the majority stand up and say enough with high paying state jobs with generous pensions and healthcare benefits. over 1/2 of the state’s troopers make over $100K.
Comment by Anon2 Tuesday, Oct 1, 13 @ 10:12 am
Is Michael Foley on Bruce Rauner’s Campaign committee?
Just asking …
Comment by Oswego Willy Tuesday, Oct 1, 13 @ 10:17 am
And the alternative is to not compete to keep world class companies here? It seems to me for each of those ‘evil-doing’ corporate execs with the private jets and alligator shoes, there are hundreds if not thousands of Regular Joes working at those companies for good wages, good benefits and raising families in towns struggling economically. The language is incendiary here: “At the same time Illinois lawmakers are expected to debate a plan to STRIP retirement benefits from teachers, prison guards and university employees…”. I do empathize with people who are affected by this, but “strip” is a little too strong a word. What will “strip” them is if the system goes bankrupt. It needs reform badly even for the sake of the people depending on it.
Comment by A guy... Tuesday, Oct 1, 13 @ 10:17 am
The art of misdirection…
Comment by FirstStreet Tuesday, Oct 1, 13 @ 10:19 am
Anon2 - fill out an application. I believe they are online at the CMS website.
Comment by Irish Tuesday, Oct 1, 13 @ 10:21 am
===The comments pretty much write themselves.===
Then what are we supposed to do?
Is Madigan pushing these bills? Why? Does he want to be Republican Leader too, in addition to being Speaker?
It used to be that Democrats stood up for working families and opposed corporate welfare like this. Up is down. Black is white. They say you get more conservative as you get older, but Madigan is taking that too literally.
Comment by 47th Ward Tuesday, Oct 1, 13 @ 10:22 am
This is exactly the reason I have absolutely no respect for the Civic Committee. They do nothing but further the negative feelings so many people have against the rich, as well as the stereotypes people have of those that run corporations. They have absolutely no respect or care for anybody but themselves. They will step on anybody and it’s disgusting.
Comment by Demoralized Tuesday, Oct 1, 13 @ 10:22 am
According to ADMs annual report, in 2012 the company had a net profit of $1.765 billion.
It’s state income tax liability — across all states in which it pays income taxes — was $21 million. Illinois’ share of that is not reported.
(Anybody in the Department of Revenue want to accidentally send an email to Rich?)
But ADMs effective state income tax rate overall was 1.1%.
Being in Illinois is obviously very good for ADM. Nearly $2 billion in annual profits, oogats in state income tax.
So why are they sticking a gun to the head of the taxpayers? Why should we pay for them to dump on Decatur, the folks who made their fortunes?
What kind of people do that sort of thing?
Comment by wordslinger Tuesday, Oct 1, 13 @ 10:22 am
Anon2 - So do you want to be a state trooper or Chicago copper or fireman or do you prefer a job when you never, ever have to think about ending your watch in a hospital or worse?
Comment by West Side the Best Side Tuesday, Oct 1, 13 @ 10:28 am
Oh so maybe what was meant by Rauners idea of the 30 or so execs to advise him is really him setting up a compensation committee that can allocate our tax dollars by compensating these poor oppressed ceos for deigning to bestow jobs upon us peasants. Neat.
Seriously though these developments just reminded me of a recent Forbes column titled “Give Back? Yes, It’s Time For the 99% to Give Back to the 1%.” No it wasn’t satire. And yes it was as bad as it sounds: tinyurl.com/nnybhfu. For some reason the civic committee came to mind when I first read it.
Comment by hisgirlfriday Tuesday, Oct 1, 13 @ 10:29 am
A Guy, what is your problem?
ADM makes billions in Illinois. They pay no state income taxes.
Pensioneers already did the work and just want what they were promised under their contracts.
Yet you’ll bend over for ADM and hose the pensioneers.
In what, presumably capitalist, world is that acceptable behavior for government? It’s Bizarro Robin Hood.
Comment by wordslinger Tuesday, Oct 1, 13 @ 10:36 am
Someone is going to have to pay for all this! Maybe we can get the state employees/retirees to give up their COLA completely?
Comment by Where will it end? Tuesday, Oct 1, 13 @ 10:37 am
There is no moral exemption for any man or body of men that breaks
contracts. Nor is there any hope of public or private respect for a
contract breaker. A contract breaker is an utter misfit as a citizen or a
business man.”
—Franklin MacVeagh, former President of the Commercial
Club of Chicago and U.S. Secretary of Treasury2
It is all about the money…follow the money.
The hypocracy is amazing.
“
Comment by facts are stubborn things Tuesday, Oct 1, 13 @ 10:37 am
Well, what are state employees going to do? Move their facilities?
Southern Illinois University-St. louis.
Northern Illinois University-Jaynesville
Chicago Public Schools of Hammond?
Joliet Prison (I know) of Dubuque
Not saying I agree with these practices in full, but it is about leverage.
Comment by Wumpus Tuesday, Oct 1, 13 @ 10:45 am
=Where will it end?==
Better idea. Since Illinois is broke, all retirees should not only give up their entire COLA, but give up their pension too. Then they can go on public aid and get free food and housing too and medical care too. That’d fix all the cheapo taxpayers.
Comment by Anonymous Tuesday, Oct 1, 13 @ 10:52 am
==The language is incendiary here==
I don’t think it’s incendiary to belittle a corporation with an extremely low tax liability wanting a further tax break.
==And the alternative is to not compete to keep world class companies here==
What “competition” do you want? No taxes for businesses? I’m sick of people feeling sorry for some of these businesses when, from where I’m sitting, they have it pretty good. I wish my tax liability were as low on a percentage basis as some of these corporations.
Comment by Demoralized Tuesday, Oct 1, 13 @ 10:53 am
Maybe we should just do away with the corporate income tax but institute a progressive personal income tax. Unfortunately that’d require opening up the State constitution to change and when the dust settled, the Civic Committee would protect the rich while gutting public employee pensions.
Comment by Sir Reel Tuesday, Oct 1, 13 @ 10:55 am
===And the alternative is to not compete to keep world class companies here?===
Why would that be the only alternative? Don’t argue like a child.
Comment by Rich Miller Tuesday, Oct 1, 13 @ 10:56 am
“Yet you’ll bend over for ADM but hose the pensioners.”
There are plenty of people who bend over to ensure that wealthy individuals like the Koch brothers and wealthy corporations get the breaks. These are the political foot soldiers who vote against unions, expanding health care, for tax breaks for the rich and the rest–even though these people could really benefit from what they despise.
I have words for these people but I can’t use them here.
Comment by Grandson of Man Tuesday, Oct 1, 13 @ 11:04 am
Wordslinger- No problem here. Why don’t you add up the collective state income tax of every employee who draws a check from ADM and add it to the total of income taxes paid to the state. All those families send kids to schools that hire teachers. They spend money locally too. I realize a lot of people who comment here have skin in the game. So does every struggling taxpayer in Illinois who’s paying the freight on this train wreck of debt. There’s another side to this argument, I’m respectfully trying to make.
Rich, your snideness in the last remark surprises me a little bit. Let’s argue like adults then. ADM is moving. They’re looking for the best economic system possible for them. That’s business. Illinois can choose to compete or not to have a world class company HQ in a world class city. There is competition for them. Why wouldn’t there be? I wouldn’t want to give away the store to keep them, but I’d go deep enough to attempt to keep another Fortune 50 company headquartered in Chicago/Illinois. That helps tourism, jobs and everything else economically. Hope this argument comes off more maturely to you. My issue is never going to be that I don’t take these things seriously enough.
Comment by A guy... Tuesday, Oct 1, 13 @ 11:06 am
When we can afford to offer super-no-tax deals to businesses, Illinois is NOT broke.
Comment by Anonymous Tuesday, Oct 1, 13 @ 11:07 am
Any company exec who publicly requests or argues for State corporate tax relief, ought to be asked what they are paying now, and have the decency to respond.
Frequently the answer has been “minimal or none”, for those who are honest, (like ADM recently).
Comment by walkinfool Tuesday, Oct 1, 13 @ 11:07 am
Anonymous @ 10:52 am said: == Then they can go on public aid and get free food and housing too and medical care too. ==
That’s the super secret plan to shift 90% of the state retiree cost to the feds …
Unfortunately, on bad days, I sometimes think the above is not a joke but actually part of someone’s plan.
Comment by RNUG Tuesday, Oct 1, 13 @ 11:11 am
There is an alternative. Look at Minnesota. They have a tax system that makes the CEO pay more than his secretary. They also have lower unemployment and higher incomes as a state than we do. You don’t have to pay extortion money to the rich and the corporations in order to have a strong economy.
Comment by Eugene Tuesday, Oct 1, 13 @ 11:12 am
===Illinois can choose to compete or not to have a world class company HQ in a world class city.===
We should compete.
What I objected to was your childish argument about how it was either one or the other. It’s not.
If a company CEO belongs to a group that is trying to “strip” benefits from retirees, and then that company asks for an EDGE credit as it moves its headquarters less than a mile in Schaumburg, the CEO and that company ought to be called out.
Comment by Rich Miller Tuesday, Oct 1, 13 @ 11:13 am
Sir Reel @ 10:55 am:
You don’t need to go to a graduated income tax to hit the rich. Just drastically increase the current income tax rate and exempt the first $150K of household income; that will accomplish pretty much the same thing. And about 90% of the public would love it since they would now be paying NO state income tax.
And it also hits corporations since the constitution ties the corporate tax rate to the individual tax rate. Double whammy on the rich. Unfortunately, it would also hit small businesses … so there would need to be an exemption level on corporate income ($1 mil?) that lets small businesses avoid the increase.
Comment by RNUG Tuesday, Oct 1, 13 @ 11:18 am
–Why don’t you add up the collective state income tax of every employee who draws a check from ADM and add it to the total of income taxes paid to the state.–
They work for the money. If they’re not making ADM money, ADM will fire them. ADM is not running a charity.
They pay state income taxes; ADM does not.
ADM wants to take the state income taxes they pay, and apply it their already very profitable bottom line. Meanwhile, the rest of us will pick up the slack.
And you’re okay with that? Why?
Comment by wordslinger Tuesday, Oct 1, 13 @ 11:20 am
Sometime I don’t agree with Rich but this info is the reason I check out his site.
Big time tax breaks, public money for private university projects, expansion of Medicaid for hundreds of thousands of people etc. etc, etc.
Obviously no fiscal crisis and no way LOGICALLY for the state to claim any type of financial exigency.
But who knows how our courts would rule.
Comment by Federalist Tuesday, Oct 1, 13 @ 11:23 am
===If a company CEO belongs to a group that is trying to “strip” benefits from retirees, and then that company asks for an EDGE credit as it moves its headquarters less than a mile in Schaumburg, the CEO and that company ought to be called out.===
This is why I posted my half-snark question, and I have been reading, and not posting, trying to get my head around how someone like Mr. Foley can make an arguement, and belong to an organization, and have the two reconcile?
And yes, it is that important that if they have serious issues reonciling, it should be pointed out, and called out.
Ok, back to reading…
Comment by Oswego Willy Tuesday, Oct 1, 13 @ 11:33 am
“ADM makes billions in Illinois. They pay no state income taxes. ”
How much do they pay in property taxes?
How much do they pay in sales taxes?
How much do they pay in fuel taxes?
How much do they pay in utility taxes?
How much do they pay in tolls?
How much do they pay in hotel taxes?
How much do they pay in entertainment taxes?
How much do they pay in payroll taxes?
How much do they pay in licensing / registration taxes?
Comment by Re-Pete Tuesday, Oct 1, 13 @ 11:34 am
===How much do they pay in property taxes?===
They may pay nothing…
Would have been nice with that many questions, if you had one or two given to us, ya know, like throwing everyone “a bone” to your … point?
Comment by Oswego Willy Tuesday, Oct 1, 13 @ 11:37 am
==Why don’t you add up the collective state income tax of every employee who draws a check from ADM and add it to the total of income taxes paid to the state. All those families send kids to schools that hire teachers. They spend money locally too. . . .
ADM is moving. They’re looking for the best economic system possible for them.==
No, their headquarters is moving and they’re talking about locating a new IT site somewhere. There is no talk at all about moving the thousands of workers in Decatur and elsewhere. And they’re moving their HQ because they don’t want to live in Decatur, not for anything related to ADM’s business.
Comment by Anon. Tuesday, Oct 1, 13 @ 11:49 am
== Would have been nice with that many questions ==
Oops, forgot a few…
Telecommunications taxes,
airport taxes,
cell phone taxes,
vehicle taxes…
Comment by Re-Pete Tuesday, Oct 1, 13 @ 11:52 am
Well, - Re-Pete -,
When you have the true economic impact of ADM in real numbers, including cell phone tax, I, for one, will look forward to those numbers to make … your …point(?)
Drive-by list of questions really have little impact when just listing them.
Comment by Oswego Willy Tuesday, Oct 1, 13 @ 11:57 am
How much of ADM’s operations tax illinois’ infrastructure? Has anyone worked along the side of the road when one of those fully loaded semi’s drive by?
Comment by foster brooks Tuesday, Oct 1, 13 @ 12:02 pm
They are moving their headquarters because SOMEONE doesn’t want to live in Decatur. I know some of those IT people. They are locals. they are working at ADM because it is one of the few IT shops left in Decatur. They didn’t move to Decatur to work there, and they don’t want to move from Decatur.
Comment by mythoughtis Tuesday, Oct 1, 13 @ 12:10 pm
The GOP formula is smaller government when it comes to the needy, and corporate welfare for the greedy.
Comment by reformer Tuesday, Oct 1, 13 @ 12:13 pm
Others said it, but Anon 2, you are kidding, right? Have you ever been shot at, had a car try to run you over, or have someone throw bricks at you? I’d gladly see state troopers and cops in high crime areas have 1) more experience and 2) higher pay.
Your ridiculous remark has nothing to do with the corporate greed of ADM.
Comment by Mongo Tuesday, Oct 1, 13 @ 12:15 pm
Re-Pete
I give up. How much do they pay ? I’m sure you have all the figures.
Comment by AFSCME Steward Tuesday, Oct 1, 13 @ 12:28 pm
OK, Re-Pete, I’ll take it on:
Sales taxes - ADM is not subject to sales taxes the same way the average Joe is. Illinois Tax Code includes sales tax exemptions for manufacturing equipment, farm machinery, building materials for manufacturing companies, rolling stock (interstate carriers delivering sold goods outside Illinois), and more.
Fuel tax - Businesses located in enterprise zones are exempt. ADM in Decatur was granted enterprise zone status in 2012.
Utility tax - “High-impact” businesses are exempt, as are businesses in enterprise zones.
Tolls - Toll roads are located around Chicago and so don’t affect most of the trucks coming to and from Decatur.
Hotel and entertainment taxes - I’m guessing it’s a pittance compared to ADM’s annual revenue.
Payroll taxes - Well, we see what they want to do about that.
Licensing/registration fees - See http://www.cyberdriveillinois.com/publications/business_services/dfc.html. We’re talking a few hundred bucks at most to register the business. Granted, they may have to buy tags for company vehicles at the same rate everyone else pays. If you want to see that as a burden, I respectfully disagree.
Comment by OldSmoky2 Tuesday, Oct 1, 13 @ 1:09 pm
OldSmoky2 —
You forgot to mention that property taxes don’t go to the State. Neither do tolls. So it’s not relevant to this conversation.
Comment by Wait a minute Tuesday, Oct 1, 13 @ 1:14 pm
Don’t forget that Zurich is moving into a Schaumburg TIF district come Jan 2014.
http://www.dailyherald.com/article/20130918/news/709189918/
How much is too much??
Goofy rationalization by people like Re-Pete only try and cloud the numbers. People already working in Schaumburg and eating lunch there are not going to spend more money on lunch just because they moved a mile northwest of where they were.
Comment by Pete Tuesday, Oct 1, 13 @ 1:25 pm
== I realize a lot of people who comment here have skin in the game.==
I’m really getting sick and tired of that refrain. My problem isn’t your opinion. It’s great to have legitimate differences and to argue about them. My problem is the continued argument you make that somehow individuals with “skin in the game” are any different than this “average taxpayer” you keep referring to. We are ALL taxpayers. To me your arguments come off as extremely arrogant.
Comment by Demoralized Tuesday, Oct 1, 13 @ 1:45 pm
We need a uniform business incentive policy. This constant negotiation / hostage situation is not good for any of the states who play this game.
Let’s create a transparent and consistent policy. One that creates incentives for creating and keeping jobs here and one that has additional incentives for investing and growing here.
Comment by siriusly Tuesday, Oct 1, 13 @ 1:58 pm
We need a uniform business incentive policy. This constant negotiation / hostage situation is not good for any of the states who play this game.
___
Bad idea. It would be like playing blackjack with both of the dealers card showing before your cards are dealt.
Comment by Pete Tuesday, Oct 1, 13 @ 2:03 pm
===Bad idea. It would be like playing blackjack with both of the dealers card showing before your cards are dealt.===
Governments and taxpayers shouldn’t feel like they’re constantly being forced to play blackjack in casinos run by big corporations.
Comment by OldSmoky2 Tuesday, Oct 1, 13 @ 2:14 pm
== Drive-by list of questions really have little impact when just listing them. ==
They are used to provoke thought in the reader.
Comment by Re-Pete Tuesday, Oct 1, 13 @ 2:21 pm
===They are used to provoke thought in the reader.===
When I visit your Blog, I will keep that in mind.
Here, usually, drive-by comments get it from all sides, and since you do not deny it was a drive-by, you are getting the usual.
Comment by Oswego Willy Tuesday, Oct 1, 13 @ 2:26 pm
ADM is probably just one of the two-thirds of Illinois corporations with no corporate income tax liability as the IL Director of Revenue has testified. Wouldn’t we all like to know who those are? HB 3627 will do that.
Comment by eyewitness Tuesday, Oct 1, 13 @ 2:30 pm
===Governments and taxpayers shouldn’t feel like they’re constantly being forced to play blackjack in casinos run by big corporations.===
Who is forcing governments to do anything? These governments are taking money away from schools, parks, and libraries to reinvest it into property values so they can spend more money. All branches and levels of government are competing with each other. It’s been that way for over 200 years. Look at State versus federal rules, Municipal Home rule, and township jurisdictions versus County jurisdictions. None of these competitive practices serve the tax-payer when it’s a win at all cost mentality. Heck even parties and candidates put aside common sense in the election season to win.
You think Big Corporations are forcing governments? I think it’s the opposite. It’s a game politicians willingly play to one up the next government over.
We have the best transportation access in the country. Illinois is centrally located with access to rail, airports and highways. Chicago has 4 season regional climate, excellent public transportation, great access to drinking water, and no significant worries regarding natural disasters.
That is what the State of Illinois investment is! That is where the tax dollars are dedicated. Now we have government officials that think tax breaks and financial incentives are required?
Let those companies try and find those assets in another state. Let them go to another urban center with a similar talented labor pool. They’ll come back.
Unfortunately our elected officials are soft and pull out the wallet at the first hint of negotiations. Our labor unions know this too well and have conditioned our elected leaders to bend easily.
I don’t blame the big corporations. I blame the elected lack of leadership that can’t negotiate to save a dime for the taxpayer.
Comment by Pete Tuesday, Oct 1, 13 @ 2:32 pm
==You think Big Corporations are forcing governments?==
Great question. I don’t fault these companies for asking, especially when their likely to get what they ask for. I wish I could say I’m leaving unless you give me some dough to stay. I just did it with my cell phone company the other day. I’m betting the state wouldn’t be so receptive to me as an individual.
Comment by Demoralized Tuesday, Oct 1, 13 @ 2:44 pm
sorry . . . they’re likely . . . bad English.
Comment by Demoralized Tuesday, Oct 1, 13 @ 2:44 pm
How does ADM make $1.75+BILLION and pay so little IL tax? Are they using the “Wal-mart loophole”? Speaking of which, was that loophole ever closed? What did Wal-Mart pay in IL income tax last year?
Comment by Taxpayer Tuesday, Oct 1, 13 @ 3:07 pm
Obviously there are a lot of non-tax experts on here today.
ADM may have had $1-2 billion in earnings WORLDWIDE but the vast majority of these were not in Illinois. Companies ONLY pay taxes on income derived in the state. They are a major exporter meaning that they are not taxed in Illinois.
Secondly, ADM pays tens of millions of dollars or more in property taxes, sales taxes, utility taxes, payroll taxes, etc.
ADM just spend tens of millions of dollars building a new Inland Port in Decatur. Additionally, they are contributing $500,000 per year for 10 years to Decatur schools, millions to social service agencies, and to the economic development agency.
Decatur is not a world class city. It’s very difficult to attract top level talent to Decatur and to travel there.
Comment by 4 percent Tuesday, Oct 1, 13 @ 6:00 pm
–Obviously there are a lot of non-tax experts on here today.–
What’s a non-tax?
Everybody gets that ADM doesn’t pay income taxes on profits derived out of state — it’s a sweet deal. Does that entitle them to their employees tax payments, too?
Comment by wordslinger Tuesday, Oct 1, 13 @ 6:13 pm
The edge credits are disgusting. We have given these companies so much that we can’t offer them anything else but the payroll tax from their employees? That may sound like a small price to keep a good paying job here in IL but that price should be paid by those employees and not the tax pool that has to be made up by the rest of us.
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