* From a Champaign News-Gazette editorial…
State Rep. Jack Franks, a Democrat from Marengo, has long been critical of the EDGE program. He’s said that he doubts “the EDGE credit programs works,” and he may well be correct.
* Full quote in the Tribune…
“I don’t think the EDGE credit program works,” said Franks, who sponsored the 2003 corporate accountability law and co-chaired a House study last year on state tax policy. “I think it’s a loser, a dead-bang loser.”
As I’ve said many times, I’m not a huge fan of corporate giveaways, but the EDGE has had some significant successes…
Among the first firms approved for a special EDGE deal was Ford Motor Co., which said it is collecting more than $25 million in tax benefits for the last five years and could qualify for an additional $20 million over the next four years after upgrading plants in Chicago and Chicago Heights.
Ford officials said EDGE was among the factors that helped secure jobs at the Chicago-area plants, where it agreed to keep 2,600 workers but said the local payroll now approaches 5,500.
And the new UAW contract means Ford will soon be investing a billion dollars to upgrade that Chicago plant.
That looks like a rousing success to my eyes.
So, the idea should be to reform the program and, as Rep. Franks has often demanded, do something to help small businesses as well.
* As far as the reform part, the governor has been working on it…
Gov. Bruce Rauner is halting a practice that let dozens of companies collect millions of dollars in tax breaks for creating jobs at one office while eliminating a greater number of jobs at another location.
Though it is common for large companies to operate from multiple locations, the state’s flagship jobs program long allowed companies to treat every location, division or subsidiary as an independent operation. […]
His latest initiative will prevent companies from signing up repeatedly for deals and turning what was supposed to be a 10-year incentive into a long-term subsidy.
* But Todd Maisch at the Illinois Chamber urges some caution…
In addition to insisting on job creation rather than rewarding job retention, the new rules would require that companies add jobs relative to their total number of workers in the state instead of at just one location. Some past deals rewarded companies for adding workers in one location while they cut elsewhere.
Maisch argues that taking away the retention credits is a mistake since other states that still do it will have an advantage.
“I do think it weakens our hands,” he said. […]
“There needs to be a bipartisan consensus around what happens when (Wisconsin Gov.) Scott Walker comes to town and really does a good job of convincing an employer from, say, Lake County to come,” Maisch said. “I imagine we’ll be talking with (Rauner’s) office very quickly.”
This from the same guy who went all-in on the state’s gridlock, urging the governor to “hang in there.”
Considering how bad this state’s business reputation is (most of it self-inflicted, but a good part of it due to the constant and very loud bad-mouthing by people like Rauner and Maisch), unilateral disarmament may not be a great idea. Yeah, it’ll make some people feel good, but I don’t know if cutting off our noses to spite our faces is ever a wonderful plan.
We should definitely be more discerning and stingier about these corporate subsidies. We need to make sure that the process is much more open. We also need to do something significant to help small businesses. But killing off all these subsidies is about as “smart” as killing off all labor union protections. Meat axes aren’t smart.