* Not unexpected…
Gov. Pat Quinn says he would veto a bill that would allow automatic electricity rate increases to pay for electric grid upgrades.
Quinn said Monday that the Illinois Commerce Commission must have rate review authority to protect consumers.
More…
The governor said he’s not opposed to the idea of overhauling the antiquated electric grid, but maintained the legislation up for debate in Springfield doesn’t go far enough. Quinn said he wants more investment in alternative energy such as solar, wind and geothermal power, and suggested ComEd needs to pick up more of the cost instead of passing it along to consumers. […]
Quinn said his office is willing to negotiate with ComEd to pass a new version of the bill before lawmakers are scheduled to go home at the end of May. He said there are a number of legislative proposals that could easily be incorporated that would help win his support.
* Meanwhile, Sears’ state incentives are expiring next year and it’s shopping around…
Twenty-two years ago, Sears Roebuck and Co. leveraged an impending move from Sears Tower and fears it would move out of state into a sweet deal valued at $240 million and a sprawling new headquarters in Hoffman Estates.
Now, with the last of those state and local incentives set to expire in 2012, Sears again has been quietly evaluating where it wants to call home.
Sears Holdings Corp., the beleaguered parent to Sears Domestic, Sears Canada and Kmart, reportedly has been talking with officials in North Carolina, Texas, Tennessee and New Jersey. […]
As part of that process, the company commissioned an economic impact study that concluded the company’s departure could send shock waves through the suburbs with the potential loss of about 6,000 Sears employees and another 9,000 ancillary jobs with nearby businesses, vendors and contractors.
* A bill is in the hopper to extend the company’s deal…
House Bill 3435, which amends the Economic Development Area Tax Increment Allocation Act, was introduced in February. It would allow Hoffman Estates to extend the current deal that lured Sears to Hoffman Estates by 15 years beyond the current 23-year limit.
Sears would continue to get the lion’s share of property tax dollars collected from the development area in return for keeping at least 4,000 jobs at its headquarters.
The measure hasn’t really moved since it was introduced.
* And Gov. Quinn says he’ll do his best to work with the company…
“Sears has been an Illinois company for decades,” Quinn said at a news conference today.
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Quinn said he has met with Sears officials in recent months. […]
“I know how to work with the big businesses,” Quinn said, referring to news last week that Motorola Mobility would stay in Libertyville with the help of $100 million in credits from the state. The company also was reportedly investigating sites elsewhere.
Quinn sought to sound a confident tone in Chicago, saying he’d work with Sears officials to try to strike a deal that would work well for both taxpayers and the company.
* Raw audio of Quinn talking to the media today…
* Related…
* Second Chicago fast-rail line, to Detroit, gets big U.S. grant
- Yellow Dog Democrat - Monday, May 9, 11 @ 2:11 pm:
There are currently 6,000 jobs there.
Why would we give them the same deal to cut 2,000 jobs?
- John Bambenek - Monday, May 9, 11 @ 2:13 pm:
How many more companies do we have to bribe with hundreds of millions of dollars to stay will it take until we decide that this might not be the best approach to economic development?
- Niles Townhip - Monday, May 9, 11 @ 2:22 pm:
How many more companies do we have to bribe with hundreds of millions of dollars to stay will it take until we decide that this might not be the best approach to economic development?
————–
As long as other states are offering bribes too, it seems we have to as well. Unless all states stop, this will continue on and on.
- Yellow Dog Democrat - Monday, May 9, 11 @ 2:25 pm:
I guess the wait for Quinn to weigh-in on the Com-Ed measure is over.
Emboldened by concealed weapons legislation?
- Hattie - Monday, May 9, 11 @ 2:28 pm:
Quinn is simply trying to pay back his green supporters. The problem is he wants to use our green tax dollars with which to do it. The bill should rise our fall on it’s merits, not be used as a way to reward Quinn’s closest allies!
- Chicago Cynic - Monday, May 9, 11 @ 2:30 pm:
Delighted with Quinn’s move on ComEd, and his framework for comprehensive energy legislation. With ComEd’s proposal under seige, maybe they’ll finally be persuaded to allow some progressive energy legislation to move forward.
- Chicago Cynic - Monday, May 9, 11 @ 2:32 pm:
Hattie,
The ComEd bill is not about the Smart Grid but instead is about an attempt to get automatic rate increases and remove much of the ICC’s jurisdiction. Investing in SmartGrid is smart, but that’s not what the ComEd bill is about. Quinn is on the right side of this one.
- Aldyth - Monday, May 9, 11 @ 2:33 pm:
Are there no large companies that want to stay in Illinois unless they are bribed? Are all states so desperate that they will give up huge amounts of tax dollars to lure them in? No wonder big companies have us over a barrel. We’ve created FrankenCorporateStein.
- Palatine - Monday, May 9, 11 @ 2:38 pm:
Just say no to both. It’s not worth it.
- soccermom - Monday, May 9, 11 @ 2:46 pm:
I have heard that New York and New Jersey had signed a “non-compete” clause, meaning that they would not bid down against each other to snag each other’s businesses. Is this true? Are there other states that have done this?
- Small Town Liberal - Monday, May 9, 11 @ 2:48 pm:
- The problem is he wants to use our green tax dollars with which to do it. -
That doesn’t even make sense. These companies want to be able to charge more for electricity without ICC approval. They say it’s to invest in smart grid technology, but without an ICC review, how are we supposed to know where that extra money is going? I work in this industry and believe me, you want the ICC to oversee rate increases.
- TJ - Monday, May 9, 11 @ 2:48 pm:
umm… not for nothing, but am I missing something here about the notion of Illinois benefiting from “geothermal power?” Does Illinois have any exploitable geothermal potential?
- Rich Miller - Monday, May 9, 11 @ 2:55 pm:
===Does Illinois have any exploitable geothermal potential? ===
Sure it does. Ever heard of heat pumps?
- wordslinger - Monday, May 9, 11 @ 2:56 pm:
–How many more companies do we have to bribe with hundreds of millions of dollars to stay will it take until we decide that this might not be the best approach to economic development?–
Probably when the rest of the Planet Earth stops doing it.
Sears is an interesting case. Historic Chicago company, crucial to building the city and The West.
When the company was still Blue Chip, Daley I and George Dunne played ball with the Brennan boys with all sorts of help to build the Sears Tower, wiping out the Madison Street Skid Row and opening up the West Loop, now out to the United Center.
When the junk-bonders wanted to chop them up, Sears cashed out the tower and took some mighty fine real estate off I-90. That land is way underdeveloped and will go through the roof when the economy recovers.
The work they do in Hoffman Estates is all on computer. They can do it anywhere. There are no fixed assets out there.
Heck, there might be a deal to move those jobs back downtown into the Sears Tower (I don’t recognize naming rights). There’s plenty of space available there
Bottom line, it will probably come down to a combination of the biggest deal, where the CEO wants to live and where he’s most comfortable playing golf. Like I said, what they’re doing out at Hoffman Estates can be done anywhere.
- TJ - Monday, May 9, 11 @ 2:58 pm:
==Sure it does. Ever heard of heat pumps?==
Ah, gotcha. I was just thinking in terms of power derived from hot springs and magma chambers when I saw “geothermal power.”
- Yellow Dog Democrat - Monday, May 9, 11 @ 3:01 pm:
=== Heck, there might be a deal to move those jobs back downtown into the Sears Tower (I don’t recognize naming rights). There’s plenty of space available there ===
THAT would make sense. Illinois roadways would be much better off without 6000 people driving to and from Hoffman Estates every day.
Rahm — Make it Happen!
- Lincoln's Penny - Monday, May 9, 11 @ 3:08 pm:
Me thinks ComEd is underestimating Quinn on this one…
- Yellow Dog Democrat - Monday, May 9, 11 @ 3:17 pm:
BTW, this seems like a good time to remind everyone that the Illinois GOP’s budget plan includes eliminating the Department of Commerce and Economic Opportunity.
You know, the agency that puts together deals to keep companies like Sears in Illinois.
- OneMan - Monday, May 9, 11 @ 3:34 pm:
Also a good time to remind everyone that this state now needs to bribe companies that have been here 100 years to stay…
- Small Town Liberal - Monday, May 9, 11 @ 3:39 pm:
- Also a good time to remind everyone that this state now needs to bribe companies that have been here 100 years to stay… -
Yeah, I’m sure Jersey is hoping they’ll move there for the scenery and a chance to run into Snooki.
- Rich Miller - Monday, May 9, 11 @ 3:43 pm:
OneMan, that makes no sense. They were “bribed” 22 years ago as well.
- ANON - Monday, May 9, 11 @ 3:45 pm:
YDD, if this State’s tax structure was set up in a way that wasn’t so hostile to corporations interests, there wouldn’t need to be “deals” put together to bribe them into staying.
- Small Town Liberal - Monday, May 9, 11 @ 3:54 pm:
- there wouldn’t need to be “deals” put together to bribe them into staying. -
Yes, that’s why those corporate bashing socialists down in Texas have to offer the same kind of deals to “bribe” companies into going there.
- Demoralized - Monday, May 9, 11 @ 3:54 pm:
ANON,
It has nothing to do with the tax structure. We could have no corporate taxes and the corporations would still be looking for a deal. Get your head out from under a rock. This has been going on in EVERY state since the beginning of time.
- Lefty Lefty - Monday, May 9, 11 @ 3:56 pm:
6,000 jobs x $50,000/year/job = $300,000,000 in salaries paid per year.
5% of this is $15,000,000/year in income tax revenue for the state. Not too shabby.
How much does/would Sears pay in property taxes? Can the loss in revenue to local taxing bodies be directed to them (at least in part) to take the sting out of the deal?
Making deals can work for all involved.
- Bill Baar - Monday, May 9, 11 @ 4:05 pm:
Sears Abandoned the West Side. Now they’ll abandon the NW Burbs. Maybe this isn’t a good company to have around anways.
- CircularFiringSquad - Monday, May 9, 11 @ 4:11 pm:
LeftyLefty makes some sense
We think it is called leverage
BTW Quinn changed no votes on concealed carry and it is unlikely he changes any minds on Com Ed, but he might help some groups load up the ComEd bill with some googoo energy stuff and help it pass
- Wensicia - Monday, May 9, 11 @ 4:13 pm:
The ComEd bill needs to be shot down, they shouldn’t be allowed automatic rate increases.
- OneMan - Monday, May 9, 11 @ 4:16 pm:
To some extent true, but it’s one thing to bribe a company when it moves (even within a state) it’s another to bribe it to stay put, IMHO…
Regardless I don’t know if keeping Sears here is that good of an investment.
http://www.businessweek.com/news/2011-05-03/sears-holdings-tumbles-after-same-store-sales-decline.html
Not sure if anyone who is pinning their future on a Kardashian collection is worth keeping.
- Bemused - Monday, May 9, 11 @ 4:22 pm:
Just another example that Corporations have no soul or conscience. The only thing important is the next quarterly report. They are all aware they can pull the equivalent of driving out to the boonies and saying put out or walk. But hey they have the same standing as living breathing human types. Excuse me, that is except for the paying taxes thing.
- Cincinnatus - Monday, May 9, 11 @ 4:23 pm:
Lefty Lefty,
I love Sears, and recognize their positive effect in both Illinois and America. Past, present and future. But…
A straight up linear analysis of their last deal shows tax breaks of about $11M per year. Using YDD criteria of a couple of million is a wash, the breaks given to Sears are about a wash. It would be better and fairer to give breaks to ALL businesses in the state instead of the shenanigans associated with a carve out to a preferred business or industry. Here again, we have know-everything elites picking winners and losers using arbitrary values assigned without knowledge of market forces (see also green energy and high speed rail subsidies).
- Rich Miller - Monday, May 9, 11 @ 4:32 pm:
===It would be better and fairer to give breaks to ALL businesses in the state===
OK, but if you did that, businesses would continue to ask for special treatment as a condition of staying or moving here. Then what?
- Yellow Dog Democrat - Monday, May 9, 11 @ 4:41 pm:
@Demoralized/Anon -
According to the non-partisan Tax Foundation, here are the 2011 Business Tax Climate Rankings:
Illinois - 23
North Carolina - 41
Texas - 13
Tennessee - 27
New Jersey - 48
In other words, of the four other states in consideration, only one has a better tax climate for businesses than Illinois.
Keep in mind that while Texas is often hailed as having no corporate income tax, it DOES have a gross receipts tax, and its budget mess is as bad or worse than Illinois.
- Yellow Dog Democrat - Monday, May 9, 11 @ 4:47 pm:
@Cincinattus -
I actually like TARGETED economic development packages, provided:
1) Taxpayers know what they are getting in return;
2) We know how much it costs;
3) There’s accountability if the company doesn’t deliver on its promise of job creation/retention;
4) We apply the same standards of “Budgeting for Results” to economic development spending that we apply to education and human services.
Right now, we take $1.6 billion in revenue off the books every year and hand it right back to companies, without even the promise to stick around for a decade like we get from Sears.
In fact, we gave tax breaks to the Tribune Corporation while they were slashing reporters’ jobs, declaring bankruptcy and giving managers bonuses.
There’s a lot of talk in Springfield about holding teachers, human services providers, and everybody else accountable for how are tax dollars are spent. Well, how about some accountability for the tax breaks we hand out?
Not even a SINGLE hearing this year on tax expenditures.
- Cincinnatus - Monday, May 9, 11 @ 4:48 pm:
Here is a very recent survey of corporate executives, you know, the guys who hire/fire and actually move businesses, not a think tank of intellectuals:
http://www.chicagobusiness.com/article/20110504/NEWS02/110509937
Illinois ain’t looking so good.
- Damfunny - Monday, May 9, 11 @ 4:53 pm:
who still shops at Sears or Kmart?
how much longer do you think they’ll be in business?
they’re going buh-bye, just like:
–Wieboldts
–Montgomery Ward
–Handy Andy
–Builders Square
–etc.
- Plutocrat03 - Monday, May 9, 11 @ 5:01 pm:
It just proves an old adage - Once you are on the governmental dole, you only get off when you die.
I bet Illinois never recovered the dollars they spent the last time. The suggestion that Sears move back downtown is laughable. If what they do is work from a computer, then why should they torture the suburban based staff by an interminable commute? There is no decent public transportation between Hoffman Estates and the city center.
- tomhail - Monday, May 9, 11 @ 5:18 pm:
Let’s pass on Sears and give Amazon.com whatever thay ask to relocate here from Seattle. Sears is in a real estate crisis that they will never really recover from, and their attempts at online sales only attract their credit account holders. These long-term bribes no longer pay off in our global economy.
- Chicago Cynic - Monday, May 9, 11 @ 5:33 pm:
“Here again, we have know-everything elites picking winners and losers using arbitrary values assigned without knowledge of market forces (see also green energy and high speed rail subsidies).”
Good grief grow up Cincinnatus. Every state in this country competes with every other with incentive packages designed to attract and retain businesses. It doesn’t matter whether they’re run by D’s, R’s or Attila the Hun. It’s all about attracting jobs.
- Little Lebowski - Monday, May 9, 11 @ 5:49 pm:
“Not even a SINGLE hearing this year on tax expenditures.”
YDD- You missed the Revenue committee when SB 4 (EDGE credits to Motorola and Continental Tire). Revenue Chairwoman Emeritus proposed sunseting all tax credits not already subject to a sunset. That little exercise didn’t go well.
- wordslinger - Monday, May 9, 11 @ 6:02 pm:
–If what they do is work from a computer, then why should they torture the suburban based staff by an interminable commute? –
Why are they a suburban based staff? Have you ever seen the reverse commute on the Kennedy? They were downtown for a hundred years. They had a real big building there for a long time.
- Pat collins - Monday, May 9, 11 @ 6:23 pm:
>Well, how about some accountability for the tax >breaks we hand out?
You mean elections?
Too bad the bill for Sears wont’ have a TIF reform. That is, only gov. districts that WANT to join have to. So schools keep their share of the money
- Plutocrat03 - Monday, May 9, 11 @ 7:23 pm:
Why are they a suburban based staff?
After 22 years they moved…..
- Precinct Captain - Monday, May 9, 11 @ 7:55 pm:
I’ve always wondered about how municipalities measure the jobs that companies promise to keep when the governmental bodies give the corporations welfare, I mean economic development tax credits.
- Caldwell - Monday, May 9, 11 @ 8:01 pm:
Texas does not have a similar fiscal situation. It has an enormous cash reserve. Try again.
- Caldwell - Monday, May 9, 11 @ 8:06 pm:
Also, Tax Foundation rankings OK but don’t include WC and lawsuit climate. Two huge factors for many businesses.
- JustMe - Monday, May 9, 11 @ 8:17 pm:
==1) Taxpayers know what they are getting in return;
2) We know how much it costs;
3) There’s accountability if the company doesn’t deliver on its promise of job creation/retention;
4) We apply the same standards of “Budgeting for Results” to economic development spending that we apply to education and human services.==
Ideally, maybe. In this world, not a chance on any of these.
- wordslinger - Monday, May 9, 11 @ 8:34 pm:
–Why are they a suburban based staff?
After 22 years they moved..–
Sears Holding (Sears, KMart, Lands End)already has a ton of office space downtown. Last I checked, that privately financed skyline is relatively full, with the normal capitalistic ups and downs.
But the reverse commute is real. Plenty of folks living in the city are heading out to the burbs for work. They run shuttles from the city to Oak Brook because there is literally no public transportation out there (and that’s the way Pate and Lee wanted it).
Put it this way: If they’re looking on to hang on to their corporate employees, Hoffman Estates or Chicago makes a lot more sense than Jersey, Texas or Carolina. If not, they can move anywhere.
Sears has been rocky for years. They have some strong brands ( DieHard, Craftsman, Lands End) but the business model is wobbly in the WalMart, dotcom era of retail.
They’re invested in a lot of real estate; old neighborhood stores and mall anchors. It’s tough. That’s not the retail trend.
But since I’m sure they don’t pay any corporate income tax anyway, I doubt the alleged Illinois “business climate” has much to do with it.
I’m surprised Wisconsin isn’t mentioned. They have two big campuses outside Madison and Milwaukee, and Lands End is a Sears moneymaker.
- Mark - Monday, May 9, 11 @ 11:18 pm:
“Yellow Dog Democrat - Monday, May 9, 11 @ 4:41 pm: @Demoralized/Anon - According to the non-partisan Tax Foundation, here are the 2011 Business Tax Climate Rankings:
Illinois - 23
North Carolina - 41
Texas - 13
Tennessee - 27
New Jersey - 48
In other words, of the four other states in consideration, only one has a better tax climate for businesses than Illinois. Keep in mind that while Texas is often hailed as having no corporate income tax, it DOES have a gross receipts tax, and its budget mess is as bad or worse than Illinois.”
Yellow dog, I googled that survey, and it was released October 26, 2010 BEFORE the Quinn Tax Hike!