Get ‘er done
Tuesday, Nov 3, 2015 - Posted by Rich Miller
* From the Illinois Policy Institute’s news service…
Illinois’ Governor wouldn’t say how many prospects there are to possibly buy a manufacturing plant in Bloomington-Normal but said one thing that’s keeping potential buyers away is Illinois poor business climate. During a stop with the McLean County Chamber of Commerce Governor Bruce Rauner said his administration is looking for a buyer to take over the plant being vacated by Mitsubishi. However, Rauner said finding one to seal the deal is difficult because of the cost of doing business in Illinois and somethings have to change.
“Our property taxes are too high. Our corporate income taxes are not competitive, but workers comp, tort system and just the regulatory burden and the red tape is punishing for businesses and especially for manufacturing firms.”
Our corporate income tax rate was slashed back in January, but he’s not wrong about the other stuff.
* More…
“I’ve been working my tail off trying to get a buyer for the Mitsubishi plant,” said Rauner. “We’ve got people interested, but they look at (the state’s) regulations and taxes and they think, ‘Oh, I don’t know …’”
After his talk, Rauner declined to give a specific number of potentially interested buyers or specific reasons causing their hesitation to proceed.
“I don’t know if it would be right for me to say why people are hesitant … so far we haven’t had success,” Rauner told reporters, noting there are fewer jobs today in the state than 16 years ago.
“We are bleeding our manufacturing base in Illinois at a fast pace,” he said. “It’s our regulations and our taxes. Our property taxes are too high. Our corporate income taxes are not competitive. Workers’ comp, our tort system and the regulatory burden and red tape are punishing for businesses, especially for manufacturing firms. That’s what we’ve got to change.”
Look, I know people in general don’t like corporate incentives. I, on the other hand, wouldn’t rule anything out, particularly for this plant. The governor has suspended the EDGE credit going forward. He might want to rethink that.
You go to war with the army you have, not the one you want to have or believe you ought to have. He has some weapons in his arsenal and he ought to use them, because we’re not a so-called “right to work” state so favored by international manufacturers these days, and we’re not gonna be.
- Cable Line Beer Gardener - Tuesday, Nov 3, 15 @ 1:31 pm:
Does the Governor ever say anything positive about this State?
- LizPhairTax - Tuesday, Nov 3, 15 @ 1:32 pm:
I’ll take him at his word that he’s trying to fill it, but you’ve got to wonder if it is better for his agenda if it stays empty.
- Get a Job!! - Tuesday, Nov 3, 15 @ 1:36 pm:
Using a weapon wouldn’t fit into his victim mentality. Having that plant unfilled only helps him push his agenda.
- Joe M - Tuesday, Nov 3, 15 @ 1:36 pm:
At least the Governor didn’t bring up trying to make Illinois a right to work state. Maybe that is a sign he is acknowledging some realities?
- 47th Ward - Tuesday, Nov 3, 15 @ 1:37 pm:
Illinois has lost manufacturing jobs for a variety of reasons, not the least of which is free trade agreements that create huge incentives to ship manufacturing jobs to low-wage nations. Those nations also allow more latitude on work rules, pollution, etc.
Illinois isn’t competing with Indiana or Wisconsin for many of these jobs, instead we’re competing with Vietnam and Bangladesh.
That doesn’t mean we don’t need to change some things. It just means that reducing our wages and denying our citizens the right to collectively bargain will not alone return us to the glory years of our 1950s economy. It’s fun to pretend, but it’s never going to happen.
It’s the 21st Century Global Economy and Illinois can’t stop it, no matter how much we’d like to.
- Honeybear - Tuesday, Nov 3, 15 @ 1:38 pm:
I agree with you. We should not as a state unilaterally disarm when other states are readily putting offers out there. That being said, there should be A LOT MORE accountability, a slower payout and reqular reporting. As it is I don’t think there is any reporting or checks being done as to whether these companies are really bringing the jobs in and how long we had them. I don’t think anybody knows! It kills me to think that companies are getting millions and we just hand them a check and walk away. For God’s sake people aren’t getting meals on wheels service any more in some places. I highly doubt anyone at DCEO knows anything anymore. Transparency? Accountability? What’s that?
- hisgirlfriday - Tuesday, Nov 3, 15 @ 1:39 pm:
Working his tail off? Give me a break. If he cares about this plant he would have at the very least lifted the edge tax credit moratorium on it, using the same logic as he did to extend the tax credits for the new chicago med show.
- AC - Tuesday, Nov 3, 15 @ 1:43 pm:
==You go to war with the army you have, not the one you want to have or believe you ought to have==
The message is that there are known knowns. There are things we know that we know.
There are known unknowns. That is to say there are things that we now know we don’t know.
But there are also unknown unknowns. There are things we don’t know we don’t know.
- Sir Reel - Tuesday, Nov 3, 15 @ 1:43 pm:
Why wouldn’t it be right for him to say why people are hesitant? Maybe some specifics would start the conversation. The same old generalities aren’t enough.
Or maybe it has less to do with his Turnaround Agenda and more with the global economy. Of course that would weaken his argument and we can’t have that.
So, more generalities.
- Ahoy! - Tuesday, Nov 3, 15 @ 1:45 pm:
Even with our Corporate Real Estate taxes being “slashed” we are still in the highest 15 with with a rate of 7.75% (5.25 + 2.5). I believe we are the 10th highest with a flat tax.
http://www.taxadmin.org/fta/rate/corp_inc.pdf
It’s not as high as it once was, but it’s still one of the higher corporate taxes. Workers comp and UI are our biggest downfall, that in our overall reputation which is going to take a while to repair.
- Anon221 - Tuesday, Nov 3, 15 @ 1:47 pm:
There was an awful lot of “I” in his talk. Contrast that to http://www.bettergov.org/news/mitsubishi-exits-what%E2%80%99s-illinois%E2%80%99-next-move
Also, if Mitsu stays in place through (or to) May 2016 with a small workforce, I believe they won’t be required to “return” the EDGE monies they originally received because they will have lasted 5 years.
http://www.pantagraph.com/business/will-mitsubishi-have-to-repay-taxpayers/article_a007101e-0d75-52f9-8c11-7e18fbb04514.html
- drop the soapbox - Tuesday, Nov 3, 15 @ 1:48 pm:
Corporate income taxes were not “slashed” in January. The temporary tax increased expired and the rate was returned to its previous level.
- forwhatitsworth - Tuesday, Nov 3, 15 @ 1:49 pm:
I heard a rumor awhile back that Tesla was very interested in the Mitsubishi plant but they wanted Rauner’s “Right-to-Work” (for less) zone in place to avoid paying union wages.
- Stumpy's bunker - Tuesday, Nov 3, 15 @ 1:50 pm:
What incentive does BVR have to peddle this joint if its vacancy “proves” the need for his agenda??
- Triple fat - Tuesday, Nov 3, 15 @ 1:51 pm:
We need Federal legislation outlawing all corporate tax incentives; at the state or Federal level. Big business extorting our tax dollars with threats of moving elsewhere is nothing more than extortion. No state should have the right to poach jobs from other states through bribery.
- VanillaMan - Tuesday, Nov 3, 15 @ 1:52 pm:
Believing that Rauner wants to sell the Mitsubishi plant and undermine his own political agenda by selling it - take more faith than I have.
- Cheryl44 - Tuesday, Nov 3, 15 @ 1:55 pm:
I’m with VMan.
- Qui Tam - Tuesday, Nov 3, 15 @ 1:57 pm:
==You go to war with the army you have, not the one you want to have or believe you ought to have==
The message is that there are known knowns. There are things we know that we know.
=There are known unknowns. That is to say there are things that we now know we don’t know.
But there are also unknown unknowns. There are things we don’t know we don’t know. =
Is Donny Rumsfeld in line to be the newest Rauner “superstar”?
- Corporate Greed - Tuesday, Nov 3, 15 @ 1:59 pm:
I am tired of greedy companies. If Mitsubishi doesn’t want to do business in Illinois, let them take their jobs elsewhere. Enough corporate charity.
- JS Mill - Tuesday, Nov 3, 15 @ 2:01 pm:
Since he in now in the real estate business he may want to take a few lessons on how to actually sell it.
Rarely do agents highlight all of the negatives and, in this case, everybody and their brother knows what those are. How about workin’ your tail off and talking up the positives? Give a think big fella.
- Headed to the exit - Tuesday, Nov 3, 15 @ 2:03 pm:
Has anybody heard of the manufacturers purchase credit(MPC), which recently expired. However, prior to the recent expiration, Illinois manufacturers could earn a use tax credit of 6.25% on purchases of manufacturing machinery and equipment and then use that credit against tax they would’ve paid for property consumed in the manufacturing process. So manufacturers pay no use tax in the end on anything manufacturing related. I’m sure this credit will be reactivated, probably in a retroactive fashion. Thus to say Il is not manufacturing friendly is a misnomer.
- Neveranonymous - Tuesday, Nov 3, 15 @ 2:08 pm:
The Governor isn’t exactly building a reputation for being a straight shooter. I simply don’t believe the Governor would be honest about his own efforts to promote the state or the concerns of the prospects, if it were off message. And, given the public statements he has made denigrating the state’s business climate, why wouldn’t you expect prospective businesses to parrot his talking points in order to secure some breaks from the state? Rauner has already discounted the value of doing business here with his own words and has invited objections such as these.
- My button is broke... - Tuesday, Nov 3, 15 @ 2:08 pm:
The Mitsubishi plant is also in an Enterprise Zone which is set to expire in March 2017. The Governor has suspended new zones (or renewals) from happening because of the budget impasse.
Local governments can abate the property taxes for businesses located in an enterprise zone. There are also utility tax and sales tax incentives. I’m sure a company won’t commit to locate there until there is certainty with the enterprise zone.
- Anonymous - Tuesday, Nov 3, 15 @ 2:18 pm:
==I heard a rumor awhile back that Tesla was very interested in the Mitsubishi plant but they wanted Rauner’s “Right-to-Work” (for less) zone in place to avoid paying union wages.==
It’s not what you got, it’s what you(re willing to) give
- Almost the Weekend - Tuesday, Nov 3, 15 @ 2:19 pm:
Rauner won’t offer any incentives to recruit companies to take over this facility in Bloomington. It goes against his narrative of the story he is writing about Illinois’*terrible business climate
On the flip side he will offer huge tax breaks for his Winnetka neighbor the CEO of ConAgra to move headquarters from Omaha to Chicago so he can work closer to home.
It will be interesting to see what Rauner does when Caterpillar cuts jobs which will hurt Decatur and Peoria. That has nothing to do with Illinois’ business climate, more to do with terrible corporate leadership at Cat.
- Enviro - Tuesday, Nov 3, 15 @ 2:20 pm:
I agree with the idea of talking up the positives of Illinois.
Instead of being negative about Illinois, we should play to our strengths. Illinois’ strengths are a diverse economy, deep pool of skilled labor, and our quality of life with many cultural advantages in Chicago and beautiful forest preserves and recreational opportunities throughout the state. These are powerful draws for companies.
According to the Council for Community and Economic Research, Chicago is has a more affordable cost of living than other large U.S. urban centers and technology hubs. Transportation in San Francisco, for example, is 10 percent more expensive than in Chicago, and housing in New York is as much as 237 percent more expensive than in Chicago.
- Grandson of Man - Tuesday, Nov 3, 15 @ 2:22 pm:
Notice that Rauner doesn’t mention unions or the prevailing wage. What Rauner talks about is what he should have focused on from the beginning. Analyze reforms that may help businesses and make the state more competitive–and justify proposals with something other than talking points.
There are two reforms out there that Rauner may be able to get–property tax freeze and more workers compensation reform. Like others have said, a good leader recognizes the best deal available and works on that.
- Bulldog58 - Tuesday, Nov 3, 15 @ 2:27 pm:
=Rauner declined to give a specific number of potentially interested buyers or specific reasons causing their hesitation to proceed.=
Classic Rauner, he has buyers just like he always has a plan but he never has anything specific to share…it’s always forthcoming. Still in campaign mode. He has to find a way, any way, to switch over to governing mode.
Unfortunately for Illinois what Rauner’s current strategy of budget hostage taking and demanding a Turn Around Agenda ransom isn’t governing mode, it’s CEO mode.
- GA Watcher - Tuesday, Nov 3, 15 @ 2:27 pm:
Drop the Soap Box: You are correct that the 5 percent rate was allowed to expire. It did not go back to the previous rate, however. It was reduced to 3.75 percent.
- Austin Blvd - Tuesday, Nov 3, 15 @ 2:27 pm:
These job losses Bruce bemoans wouldn’t have anything to do with a global economy or an aged product would they? What would CAT say?
Rauner bemoans Mondelez (aka Nabisco) jobs moving out of Chicago. Well, they are not moving to Indiana or Wisconsin or Texas. THEY are moving to MEXICO.
Rauner wants Illinois to compete with states like MEXICO.
Wonder what their workers comp policies are.
- Headed to the exit - Tuesday, Nov 3, 15 @ 2:34 pm:
Edge credits, enterprise zones, MPC credits not to mention investment partnerships are exempt from income tax completely in Illinois, which recognize hundreds of millions in gains that are untaxed at the partnership level- we aren’t business friendly
- Juice - Tuesday, Nov 3, 15 @ 2:36 pm:
Forwhatitsworth, Tesla’s current factory is in California. A lot of people on the right are saying the new battery plant would have gone to New Mexico if it were right to work, but the reality is Nevada is much closer to the supply of lithium and to the car factory, so I wouldn’t place too much weight on those rumors.
- Dilemma - Tuesday, Nov 3, 15 @ 2:39 pm:
If it were me and I heard that Tesla rumor, I would immediately start touting the fact that Illinois has a large nuclear and wind energy base (green), and that fits perfectly into the image that Tesla has. There could be all sorts of ways for the state to encourage additional green energy production at that site to lure them here. Instead of accepting that right to work is the thing that must change, look at what positives we have, sell those positives and then try to find some other creative incentive to make the sale.
- Earnest - Tuesday, Nov 3, 15 @ 2:43 pm:
The biggest disincentive to employers locating to Illinois is absolutely a structural issue: the structural budget deficit. Other things would help the business climate, but that one thing is bigger than the rest put together.
- Headed to the exit - Tuesday, Nov 3, 15 @ 2:46 pm:
Also, for multistage corps that are domiciled in Il, the income tax rate should have little influence on their decision process since a multi state Corp apportions income based on sales within Il divided by sales everywhere, thus in a lot of instances only 4-5% of a corporations income gets taxed by Illinois at 3.75%. Too bad the commoner isn’t able to realize the wholes in his rhetoric.
- Excessively Rabid - Tuesday, Nov 3, 15 @ 2:53 pm:
Two of the biggest disincentives to businesses locating here are the inability to even talk about a budget and the lack of an adequate, sustainable revenue stream.
- Headed to the exit - Tuesday, Nov 3, 15 @ 2:54 pm:
Holes that is
- Springfieldish - Tuesday, Nov 3, 15 @ 2:56 pm:
Interesting that the “Tesla-Right-to-Work” rumor involving this Bloomington plant is the same rumor the State of Washington’s IPI clone, “Washington Policy” floated last year.
http://www.washingtonpolicy.org/blog/post/did-washington-lose-6500-jobs-over-right-work
- NoGifts - Tuesday, Nov 3, 15 @ 3:24 pm:
Our property taxes are so high because our income taxes are so low. The state doesn’t fund the schools so the money has to come from local residents. The largest part of property tax is for schools. Grade school district…high school district….and community college district.
- Blue dog dem - Tuesday, Nov 3, 15 @ 3:51 pm:
Rich, can’t agree with you on this one. When governments start doling out tax goodies, you are inherently picking winners and losers in a capitalist society. It just isn’t right to keep doing this.
- Bulldog58 - Tuesday, Nov 3, 15 @ 3:56 pm:
Reno scored the Tesla battery plant because of a HUGE tax incentive…Right to Work wasn’t even an after thought.
http://www.rgj.com/story/news/2014/09/04/nevada-strikes-billion-tax-break-deal-tesla/15096777/
- Chicago 20 - Tuesday, Nov 3, 15 @ 4:23 pm:
-Illinois Policy Institute news service-
Geez, didn’t the courts deny the Illinois Policy Institute press passes because they were not actually news media yet somehow their “news service” still gets credence.
- Chicago 20 - Tuesday, Nov 3, 15 @ 4:33 pm:
Tesla receives $13,600 in government subsidies for every car they build.
Consumers in Illinois receive $6,000 in government subsidies to purchase a Tesla.
In the end, Tesla is losing $4,000 on every car it sells.
We would all be better off if Musk developed a viable business model that didn’t depend on the taxpayers keeping him wealthy.
- Ghost - Tuesday, Nov 3, 15 @ 4:45 pm:
i support corporate incentives tied to actual payroll. not hope to hire. do something like give a tax break for every dollar over 36k in salary spent on non-managment level and non executive staff salaries for people who live in illinois. i.e gice credit fornhigh wages for people who offset the tax break by paying taxes here…. but dont count the exhorbitant salaries of a couple of higher up…. true middle class building incentives. we dont need more minimium wages sweat shops that consume social services and call it a boon…. we dont want to crash our wages like indianna and wisconsin
- Wordslinger - Tuesday, Nov 3, 15 @ 6:47 pm:
These governors over the years talking about how they’re “competing ” with other states for “manufacturing jobs” are a bunch of conceited loons.
They’re not players on the world manufacturing scene, they’re pigeons to be plucked after decisions have already been made. Nice press releases, though.
For crying out loud, have any of them heard of a little place called Asia, or Mexico?
- BeenThereB4 - Tuesday, Nov 3, 15 @ 8:43 pm:
If the Gov. is pushing the Mitsubishi plant like he tried to sell the JRTC, then maybe he should farm that job out to someone with more experience in sales.
“It’s a terrible, horrible building . . . want to buy it?”
- She Comes First: The Thinking Man/s Guide to Pleasuring a Woman.rar - Friday, Nov 6, 15 @ 9:01 am:
Really no matter if someone doesn’t be aware of afterward its up to other people that they will assist,
so here it happens.