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* From House Speaker Michael Madigan’s statement yesterday about his opposition to the corporate tax break bill…
The companies requesting these taxpayer-funded breaks currently pay little to no corporate income tax to the state, contributing little or nothing to help fund the very services from which they benefit significantly. Meanwhile, middle-class families continue struggling through a recession and job loss. So I find it very difficult to support tax giveaways for corporate CEOs and millionaire shareholders whose companies pay little in state taxes. I question our priorities when corporate handouts are demanded by companies that don’t pay their fair share while middle-class families and taxpayers face an increasing number of burdens.
* Senate President John Cullerton had this to say after the tax break bill passed his chamber…
“We’re not giving any money to corporations, we’re bringing jobs to Illinois,” said Senate President John Cullerton. “These specific bills that we passed, they are new jobs that are being added. So we’re not taking any money away from anybody or giving money to corporations, we’re adding jobs that aren’t here now.”
* The Question: Do you lean more in favor of Madigan’s argument or Cullerton’s? Take the poll and then explain your answer in comments, please.
posted by Rich Miller
Thursday, Dec 12, 13 @ 11:05 am
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I voted for Madigan’s statement. Technically, both of their statements are true…I just share the sentiment expressed by Madigan that this is getting out of hand.
Comment by Thomas Thursday, Dec 12, 13 @ 11:09 am
The “job retention” argument frequently fails to pass the “snicker test”.
Comment by one of the 35 Thursday, Dec 12, 13 @ 11:20 am
Besides, how can you argue that you needed such drastic pension reform because the state is broke if you’re giving away tax breaks?
I think this is a temporary position that was unfortunate for the corporations because of the timing.
(so that’s a vote for Madigan, at least on the heels of the pension vote)
Comment by Stuff happens Thursday, Dec 12, 13 @ 11:20 am
Madigan’s. His statement very close;ly reflect my own view.
The corporate welfare syndrome seems to reach a new level of absurdity every month. Recently, we’ve had state giveaways for companies moving down the street. Emanuel is using taxpayer money to poach companies from the suburbs. How does that benefit anyone, except the governors and mayors issuing press releases — and the corporations, of course.
The spectacle of execs from ADM — No. 28 on The Fortune 100, with $81 billion in revenues and $2 billion in profits annually — going under the Dome and begging to pocket their employees’ $2 million in personal income tax payments is surreal.
By the way, could you imagine the laughter if those ADM employees asked to keep their personal income tax payments for themselves?
Comment by wordslinger Thursday, Dec 12, 13 @ 11:27 am
Competing to provide incentives is a race to the bottom. Look at Boeing in Washington. It might start with tax breaks, but it ultimately ends in competing to provide workers willing to work for lower wages in worse conditions.
Comment by Angel's Sword Thursday, Dec 12, 13 @ 11:30 am
Both are disingenuous both I voted Madigan.
Comment by Bruce are you there Thursday, Dec 12, 13 @ 11:33 am
I voted Madigan as it hews more to my beliefs.
That said, it’s an awful situation, as Word pointed out, with Governors competing against each other, large city mayors competing against suburbs, etc.
If every state made a principled stand on this, it would level the playing field. My worry is that if, say, Illinois is the only state to do so, we’ll just continue to get poached by those with less integrity.
It’s time these “leaders” figured out it’s a global economy and that shifting jobs from Schaumburg to Chicago, or Illinois to Texas, is little more than moving deck chairs on the Titanic.
Comment by Joe Bidenopolous Thursday, Dec 12, 13 @ 11:38 am
MM’s argument - boy I have trouble siding with him on anything. Jobs are created by making IL attractive for business-competitive tax rates for everyone, stabile workforce, adequate roads and infrastructure, etc.-not tax credits.
Comment by Soccertease Thursday, Dec 12, 13 @ 11:38 am
Both statements are technically true. In theory I prefer Madigan’s stance. And voted for it.
In practice, I might go for Cullerton’s, but only for companies who are actually bringing jobs from another state, for a limited term, and meticulously enforced.
The best thing about Madigan’s statement yesterday was not his current stance, but his insistence that we review and rationalize this whole process.
Comment by walkinfool Thursday, Dec 12, 13 @ 11:39 am
I agree with both statements. How about a defined progressive tax break based on the number of jobs and the current corporate taxes paid.
Tangentially, I think Madigan’s move to take full credit for the pension legislation may be a little shallower that it is currently being perceived. Quinn’s secret signing of the legislation and Madigan’s boasting of his shuttle diplomacy skills seem to be geared at leaving an opening for the unions to support/fund Quinn during the looming campaign season.
Comment by Jack Handy Thursday, Dec 12, 13 @ 11:41 am
I voted with Madigan. This is all pure & simple greed. These are all empty threats to get more money for millionaires, who never seem to be happy with how much they have. If ADM wants to relocate to Chicago, let them pay for it. If they need more workers to conduct business, then hire them. It is not the taxpayers responsibility to subsidize very profitable companies.
“We’re not giving any money to corporations, we’re bringing jobs to Illinois,” said Senate President John Cullerton. “These specific bills that we passed, they are new jobs that are being added. So we’re not taking any money away from anybody or giving money to corporations, we’re adding jobs that aren’t here now.”
Comment by AFSCME Steward Thursday, Dec 12, 13 @ 11:46 am
We voted for Madigan because he understands that IL needs some plan for addressing this stuff. IL does not need to pay for corps moving within state lines. CHI needs to shell out for that
Comment by CircularFiringSquad Thursday, Dec 12, 13 @ 11:46 am
Wordslinger,
But the local governments aren’t the root of this problem, its just a natural outgrowth of the current economy. Corporations get big enough, feel like they don’t have moral obligations, and can move freely between not just towns, but states, and on a global level between nations, so it becomes a system of one-sided competition. People compete to sacrifice the most for the privilege of having these businesses come, and corporate welfare is a part of that. Its easy to say cut off the welfare, but if IL did that one-sidedly we really would lose jobs.
Comment by Angel's Sword Thursday, Dec 12, 13 @ 11:51 am
Impossible to answer.
I would normally say Madigan’s, but:
1.) I have no faith his comments are motivated by anything more than a search for political advantage against a candidate like Rauner.
2.) A lengthy history of doling out these corporate subsidies undermines any initial confidence in his sudden “conversion” on this subject.
3.) The reforms being proposed to this process thus far would make it easier to distribute these tax incentives to corporations, not harder. CEO’s would not have to testify and the GA would not have to vote on approval.
I’ll believe the rhetoric is I still see it after next November… rather than suddenly hearing about “seeing the light” 11 months before election day.
Comment by Formerly Known As... Thursday, Dec 12, 13 @ 11:52 am
doesn’t help that the success of a politician’s term in office is often only equated with how many “jobs” they created. puts them even more in a position to take credit for and provide any incentives they can think of to keep those job numbers going up. and blaming someone else when they lose them.
Comment by PoolGuy Thursday, Dec 12, 13 @ 11:52 am
When workers have state taxes withheld from their paychecks, they, not unreasonably, expect that those taxes will go to the state. Not that the company they work for will be able to keep them.
What a boondoggle
Comment by Joan P. Thursday, Dec 12, 13 @ 11:55 am
Madigan’s statement. I am sick of corporate welfare, and of big business blackmailing local and state governments with threats to leave if they have to pay taxes, while the rest of us have to pay our taxes no matter what.
Comment by State employee Thursday, Dec 12, 13 @ 12:03 pm
Madigan’s argument is at least plausible, but Cullerton’s is just plain wrong because the credit is allowed for retained jobs as well as new jobs.
Comment by Anon. Thursday, Dec 12, 13 @ 12:07 pm
Madigan’s argument; it’s all about corporate greed.
Comment by Wensicia Thursday, Dec 12, 13 @ 12:11 pm
I hate to agree with Madigan but I do. Finally, an IL Democrat who is expressing true Democratic ideas and not the middle-of-the-road, semi-GOP stuff.
This country is in the current trouble due to enormous CEO salaries, over-compensated board positions and executives as well as not enough hiring.
You want a tax deal–show us the REAL jobs. Not some little $10-12/hr gigs with no bennies.
Comment by Belle Thursday, Dec 12, 13 @ 12:19 pm
Madigan’s, for many of the myriad reasons already stated.
Comment by Northsider Thursday, Dec 12, 13 @ 12:31 pm
Look, the Speaker is right. It is, IMHO, ridiculous that entities paying little to no tax want an EDGE credit.
Comment by Mongo Thursday, Dec 12, 13 @ 12:39 pm
It is rather interesting to observe the difference in reactions:
When Ken Griffin calls out his peers in person during a private speech and essentially says the same thing as Madigan, many commenters here lambast him.
When Madigan says this through a conveniently-timed press release, many commenters praise him without question.
It’s an interesting contrast.
Comment by Formerly Known As... Thursday, Dec 12, 13 @ 12:48 pm
I voted for Madigan because I agree with his statement. But, I think this is just talk; I don’t think he is sincere. The reason he is saying this is because he pushed to have retirees legally owed pensions slashed. So he does not want to appear as if he is showing favoritism to the big corporations. No doubt, later on we will once again see the real Madigan–his actions will not reflect these recent statements.
Comment by Earl Shumaker Thursday, Dec 12, 13 @ 1:06 pm
A question I have for Senate President Cullerton: the argument for all these tax subsidies is that these subsidies/incentives create jobs. Are there statistics available that show how many good paying jobs have been created as a result of tax breaks for corporations?
Comment by Earl Shumaker Thursday, Dec 12, 13 @ 1:13 pm
Whatever MJM’s motivations, I agree with his sentiment. Corporations used to pay signficant corporate taxes, but today it has dwindled to a small portion of state revenues.
Comment by cicero Thursday, Dec 12, 13 @ 1:16 pm
Really neither of these arguments make that much sense. Against the Speaker’s point, if companies aren’t paying tax now, then a tax break doesn’t hurt the state (it does hurt locals if it includes local incentives). But against the Senate President’s, the jobs that you are keeping in state are actually people, and not all people move just because the jobs move (and vice versa).
Comment by RFG Thursday, Dec 12, 13 @ 1:23 pm
Corporations make great servants but terrible masters. Corporations are creations of government and government has a responsibility to ensure they pay their fair share. States competing with other states using special tax breaks means the rest of the states tax payers will pick up the short fall. I’d go Madigan one better, we need a federal tax law adding back those state tax breaks into the corporations pre-tax income.
Comment by Bill Edley Thursday, Dec 12, 13 @ 1:28 pm
I voted for Madigan’s December 11, 2013 statement. And I wish the pre-December 11, 2013 Madigan would have agreed with it.
Seems like there’s some room for a nuanced strategy here. If a company is in a growth industry, then some tax breaks strictly tied to living wage job growth might make sense. But only if legislators truly believed that the company are likely to leave if they don’t get those tax breaks. And when executives purchase a nice home in the Chicago suburbs, that’s usually a sign they are going to stay here.
Comment by Robert the Bruce Thursday, Dec 12, 13 @ 1:30 pm
By bribing companies to locate in Illinois, the state is delaying the implementation of badly needed reforms in government. Why not instead create an atmosphere where corporations are fighting to get in, instead of being bribed to come in.
Comment by Cook County Commoner Thursday, Dec 12, 13 @ 1:32 pm
Good article on why States should stop courting Boeing.
http://www.nationaljournal.com/next-economy/big-questions/why-states-should-stop-courting-boeing-20131212
Comment by PhoenixRising Thursday, Dec 12, 13 @ 1:38 pm
I don’t agree with either, but I lean towards Cullerton. If you talk to business owners/employers (and I do quite often), they say that Illinois is unfriendly and that the scales have been tilted too far in favor of labor (work comp, union organizing, prevailing wage, increase in income tax, etc.). While Illinois offers tremendous opportunity, it comes at a great price. I think what you are seeing in most of the requests for incentives/financial support is a result of leverage. The businesses know that they have something that politicians want (and Illinois needs) so they’re using that leverage in an effort to balance the scales.
Comment by Anon Thursday, Dec 12, 13 @ 1:49 pm
I also lean toward Cullerton, but in my heart of hearts I feel if some lobbyist dumped enough money into eithers campaign fund, they both would be singing a different tune.
I would also agree with Anon as far as taxes and workers comp, being huge factors.
Comment by Mokenavince Thursday, Dec 12, 13 @ 1:56 pm
So Madigan isn’t a fan of the TIF schemes and scams he helped pass and he now thinks we should reform how those TIFs work and are used? And how about that Illinois Sports Facility Authority? Madigan is now against the massive corporate welfare to Reinsdorf and millionaires of professional sports? $300 million plus for US Cellular, $600 million for Spaceship Soldier Field, United Center, etc.? Nah, Michael Madigan is a hypocrite as usual.
Madigan and Cullerton need to stop giving away any corporate welfare before we can believe what they say. They’re happy picking the winners and losers, and frankly, everyone in Illinois deserves better than that.
Comment by Jeff Trigg Thursday, Dec 12, 13 @ 2:12 pm
An interesting link for those who insist on bashing Illinois. Apparently our state is not as bad for business as some people like to assert:
http://www.economicfreedom.org/2013/12/12/economic-freedom-of-north-america-2013-2/
Comment by Bill White Thursday, Dec 12, 13 @ 2:16 pm
Was kind of on the fence, until I read “we are not taking any money from anyone”. What about all the money they are taking from present and future teachers, university employees, state police and all other state employees? Reluctantly I voted Madigan’s argument.
Comment by DuPage Thursday, Dec 12, 13 @ 2:21 pm
I agree with Bill White and would cite the same source as a reason Madigan’s statements are more supportable. The extra gravy is largely unneeded, but since some get it, all want it.
Comment by Toure's Latte Thursday, Dec 12, 13 @ 2:32 pm
I agree 100% with Madigan’s argument but I voted for Cullerton’s argument because Cullerton is being honest and consistent about it. I’m still kind of stunned about Madigan’s 180 on this. While I welcome it, I am absolutely perplexed by the timing of it. Where’s he been all these years? Now that practically every company has gotten some sort of handout over the years, now it’s time to stop?
I welcome Madigan’s argument but can’t figure out why it’s taken him so long to come to his senses. Cullerton’s argument justifies his many years of voting for these corporate deals. He is consistent and honest, even though I disagree with the hand-outs.
Who is this guy with the gavel and what have they done with the real Mike Madigan?
Comment by 47th Ward Thursday, Dec 12, 13 @ 2:42 pm
While I support both I voted for Madigan - the corporations are demanding more and more to stay in Illinois - after a while this is just costing to much - the salaries paid their top execs can be over the top -
Comment by Marie Thursday, Dec 12, 13 @ 2:43 pm
I also think Chicago Cynic hit the nail on the head, in the other thread with taxpayer giveaways being a parallel incentive to “right to work” laws:
=== Chicago Cynic - Thursday, Dec 12, 13 @ 10:16 am:
It’s a race to the bottom. Which state can give away the most. Which can offer cheapest wages, etc. There’s an old saying in sales training, “never talk price until you’ve established value.” States are competing all on price and not much on value (educated workforce, other advantages of a particular locale).
Illinois will never win on price, but we have a good case to make on value. Central location, access to transportation, educated workforce, etc. If those things matter more, we’ll often win. ===
Comment by Bill White Thursday, Dec 12, 13 @ 2:50 pm
I reluctantly voted for the Madigan position. I think corporate welfare has gotten way out of hand, but I don’t trust Madigan is doing this to benefit the people of Illinois. The only way this madness will stop is to impose a federal tax of 100% of the value of any state or local incentive. For good measure the executives making the decision should be held personally responsible as well to avoid the “cost of doing business” mind-set.
Comment by Past the Rule of 85 Thursday, Dec 12, 13 @ 3:25 pm
What Bill White said.
Comment by persecuted Thursday, Dec 12, 13 @ 3:26 pm
I voted for Cullerton’s. EDGE tax credits are only used when a company has a legitimate out of state option. While the State may not receive any increased tax revenue from a corporation with an EDGE credit, the State will receive income taxes from the employees and in-direct benefits by those employees (sales tax from spending money in the community, property taxes from owning a house, etc.) when those jobs are created in Illinois. Same goes when a job is retained with an EDGE credit. While you aren’t adding new revenue, you are maintaining what you have. Which is better than those jobs and employees being transferred out of State and taking those indirect benefits and their spending with them.
Comment by Down South Thursday, Dec 12, 13 @ 3:49 pm
People like to complain about “corporate welfare” but a simply look at the Comptroller report shows that corporate tax incentives only total $350 million annually.
In contracts, individual incentives total Billions of dollars. I don’t hear anyone complaining about the personal exemptions, reduces sales tax on food and medicine, property tax deduction and other tax incentives that cost the state far more revenue. And don’t lead to jobs….
Comment by 4 percent Thursday, Dec 12, 13 @ 4:41 pm
It was very tough, but I voted for Cullerton, because for all my pro-union bloviating, I want to be considerate to corporations also. I’m very happy with the comments supporting Madigan’s argument.
People mention that corporations move to states like Florida and Texas because of no income taxes. People also mention that we must attract businesses in Illinois based on our good qualities. One asset that Illinois is now obtaining, and may be able to sell in the future, is health insurance expansion. The “business-friendly” states I mentioned have among the highest number of people without health insurance. If they don’t implement the ACA, or any health insurance reform, corporations interested in a healthy business environment may choose states like Illinois. I read that Germans see their univesal healthcare as pro-business, because it gives them an economic advantage, and they can’t understand why we’re fighting against compulsory health insurance.
Comment by Grandson of Man Thursday, Dec 12, 13 @ 4:47 pm
4 percent, “only” $350 million in corporate incentives?
That’s about $80 million more than the annual budget for the state police. And about $50 million more than the combined budgets of public health and juvenile justice.
Those, to me, would be core functions of state government, not covering country club dues and car leases for multinational execs.
Corporate income tax revenues are $2.5 billion, borne mostly by small companies that do virtually all their busIness in state. That’s about 7 percent of GRF. To take $350 million of their tax burden and give it to the big dogs who aren’t paying anything is whack.
By the way, individuals pay $15.6 billion in state income taxes, about 46 percent of GRF.
Comment by Wordslinger Thursday, Dec 12, 13 @ 5:09 pm
Madigan has it right. A lot of these corporate beggars pay no state taxes, so what “tax break” are we giving them? It is just corporate welfare, a transfer payment from taxpayers to tax recipients.
Most of these deals are one-way streets. The corporation gets the benefits of the deal up front or within a short time frame, and they are rarely held to any standard for their performance in terms of creating jobs or retaining jobs in the state or city that gave them the deal.
Bleep them, I say. Help them pack their bags.
Comment by DuPage Dave Thursday, Dec 12, 13 @ 6:40 pm