* From the Associated Press…
The Illinois Department of Commerce says it has reached tax-break deals with three companies following Gov. Bruce Rauner’s recent decision to reinstate corporate tax incentives.
The deals through the EDGE tax-credit program, though, would not provide tax incentives until Rauner and Illinois lawmakers agree on the overdue state budget.
The department did not provide the size of the tax breaks the companies would receive.
Under the deals announced Tuesday, Fabrik Industries Inc. of McHenry would add 25 new jobs and invest $5 million. The company now employs 264 people.
The other two companies are in Rockford and Northbrook.
* The reason I’m singling out the McHenry County company is because the Associated Press just ran a long story about corporate tax credits and featured that county’s most prominent state legislator, Rep. Jack Franks…
Though fond of some of the Rauner changes, Franks said they don’t address “the underlying program at all.”
He believes the EDGE program favors big companies far too heavily, something small businesses in the state frequently complain about.
“I think a better approach would be to lower the tax rates on all corporations,” Franks said.
Franks was also quoted in a recent News-Gazette editorial and the Tribune saying this…
“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.”
* Team Rauner asked if I’d seen the above story and then asked if I’d asked Franks about it. I told Rep. Franks what was going on and he responded via text with a statement…
They have tightened up some regulations but still have no way of measuring if there is a return in the investment. Additionally this is not line itemed and blows another hole in the budget.
I told the Rauner folks about Franks’ statement and they sent me an e-mail exchange from Rep. Franks…
From: [Jack Franks]
Date: August 10, 2015 at 10:42:47 AM CDT
To: [Richard Goldberg], Robert Stefanski
Subject: Fwd: Fabrik Molded Plastics, Inc.
Gentlemen the attached is self explanatory. This is not only an increase of 100 jobs but also the retention of 400
When I spoke with Mr Wagner he said the state was unhelpful and slow to respond. Can we get someone who is a decision maker to meet with him? I’m happy to answer any questions. Jack
Sent from my iPhone
Begin forwarded message:
From: “Keith C. Wagner”
Date: August 10, 2015 at 10:17:16 AM CDT
To: [Jack Franks]
Subject: Fabrik Molded Plastics, Inc.
Representative Jack Franks,
I appreciate your call and interest in helping Fabrik Molded Plastics with our intentions to grow our business in Illinois. It is good to hear that your willing to put efforts into persuading the state to hear about our plans hopefully offer some assistance to our company. Below is a short narrative regarding what we have been doing so far and what we plan to do in the near future.
Fabrik has been in McHenry County since 1980, 35 years. We are a custom plastic injection molder that employs 400 people and services companies throughout the world. Our primary niche is Automotive products for just about every automobile manufacturer. Our employees range from entry level machine operators to highly skilled executives. We are a growing company that invests within our community and our people. Fabrik continues to pursue interns from high schools and colleges, we also work with local workforce development groups, taking on new hires that have been struggling to find work.
Fabrik is growing our business and our current facility in McHenry will not allow us to meet our customers demands. So as any good business would do, the management team embarked on an analysis of expansion in IL and our options outside of IL. Our intended plan within Illinois, would be to buy the building adjacent to our facility in McHenry and add manufacturing capacity. The growth would cost Fabrik over 5 million dollars and would add 100 jobs in the next 3 years.
As we have been exploring expansion possibilities we have visited several other states and we are considering the potential of utilizing offers that are being made.
In the first quarter of 2015, Doug Martin of the City of McHenry and Pam Cumpata of McHenry County EDC met at Fabrik to have a conversation on our expansion plans for the company. Included in that conversation was Andria Winters of DCEO. The next step was to complete the State of Illinois Project Profile so that DCEO had information on the company and expansion plans. The Project Profile requested that we supply the offers from the other states, which I have declined to provide to DCEO until an Illinois offer is made. Illinois should make an offer if they intend to compete. Hopefully, Illinois will come through with a package that compares to our other choices.
Following the submission of the Project Profile and during the discussion requesting additional information, a representative from the Governor’s office contacted Pam Cumpata to inform her that the Governor was suspending the EDGE Tax Credit incentive until a State budget was in place and to my knowledge that is still the case.
On a local level, the City of McHenry and other taxing bodies are doing all they can to help create a financial incentive for us to aid in our decision process. The total amount that has been discussed as an abatement of taxes would equal $30,000 a year for 10 years. The abatement discussions are not going well, unfortunately the school districts that amount to over half the proposed abatement are not open to the idea. One of the school districts is not discussing the project with the City of McHenry, so it does not look good for the abatement to reach even half of the original proposed amount.
The timing of the start of this project is coming closer, we do not have the luxury of time that we had when we began this process months ago. We hope to hear from the State of Illinois in the next few weeks so we can begin to make plans to expand here where our roots are. Fabrik is not a big company with resources that can withstand a long period of courtship and legalities, so we can receive an incentive package that will aid us in expanding our business. We are hoping that a simple incentive plan that helps us financially with our growth plans can be offered by the state.
What can the State do to help is the question that needs to be answered. Training credits are welcomed, but do not add up to an incentive worth the time and efforts.
Keith Wagner
President, Fabrik Molded Plastics, Inc.
Jack did the right thing for his district. Good on him. It’s why the Democrat keeps getting reelected in one of the most Republican districts in the state. The man is relentless.
But now he wants to slam the door shut on other districts. Not good.
By the way, I texted Rep. Franks that the governor’s office had released his e-mail and didn’t hear anything back. I’ll let you know if he responds.
*** UPDATE *** From Rep. Franks…
I did not understand your statement that they sent you my email. It had not crossed my mind that they sent you the communication where I asked that they help my constituent.
My criticism of the program remains. It needs to have metrics to determine return on investment It also has to be included in the budget as a verifiable line item. The program needs to be further improved.
Having said that I also have an obligation to help my constituents which were eligible under the guidelines and I did so.
It would serve the governor better to listen to constructive advice instead of attacking the messenger.
To reform Illinois we need to work together. I continue to do so and invite the governor to join me.
- walker - Wednesday, Nov 25, 15 @ 10:14 am:
Sharing the Representative’s email publicly is unnecessarily confrontational with a potential ally on certain issues.
- so... - Wednesday, Nov 25, 15 @ 10:17 am:
==Sharing the Representative’s email publicly is unnecessarily confrontational with a potential ally on certain issues.==
So is bashing the EDGE program when you’re asking for it for your district.
- Oswego Willy - Wednesday, Nov 25, 15 @ 10:19 am:
I don’t know if I’m at all comfortable with the releasing of the emails, insofar as Rauner himself and his personal and governmental transparencies, or lack thereof exist.
Is this a “gotcha” or an informational release to give context?
Making emails fair game… is fair game.
I don’t know if the “gotcha” is worth the breaking of a trust in this specific instance.
I get it, I do. Just a tough way to be seen as a partner when facing the “Geez, is there an email out there that clukd haunt me?”
If I were the Rauner Crew, if I had another way to make thus point, I might’ve taken it. Now? This road? Hope Rauner’s Crew thinks about all the emails they’ve sent.
Tough way to go about working out differences.
- Georg Sande - Wednesday, Nov 25, 15 @ 10:24 am:
Just like the so-called “corporate loopholes” Franks now rails against, but voted to sustain time and again, Franks likes/uses DCEO when it suites him … but also publicly rails against the department when politically opportune.
- Anon221 - Wednesday, Nov 25, 15 @ 10:25 am:
It looks like more than just EDGE in is play here. This goes all the way back to the total veto of the first budget by Rauner and all the dominos since, especially those related to the munis. The school districts mentioned above, like many in the state, are already looking at ways to possibly raise their property taxes to cover the massive shortfalls from the state this year. So, yes, they are hesitant or even resistant to abatements of any kind right now. Munis are broowing from other funds currently to just cover basic operating budgets because of their pass through funds being held up, and big time Winter hasn’t even hit yet. EDGE is a part of this story, but not the total. December 1st is the first turning point.
- Anon221 - Wednesday, Nov 25, 15 @ 10:26 am:
borrowing, not broowing.
- Oswego Willy - Wednesday, Nov 25, 15 @ 10:26 am:
There’s also a vengeful/spiteful feel in this release.
Unless the two parties had a talk about Franks understanding the differences in his wants and public position, this was a “gotcha” move, waiting to spring without fair warning(?)
- Anon221 - Wednesday, Nov 25, 15 @ 10:32 am:
Some background:
http://www.nwherald.com/2015/07/23/expanding-mchenry-manufacturer-fabrik-plastics-weighs-move-away-from-illinois/ala705r/?page=1
- walker - Wednesday, Nov 25, 15 @ 10:32 am:
Georg: Agree with your characterization, but wouldn’t a simple statement like: “Representative Frank expressed to us his own support of this specific credit in his district,” served Team Rauner better? I hope we’ve not started an internal email war.
- Anon221 - Wednesday, Nov 25, 15 @ 10:33 am:
Ripple effect: http://www.nwherald.com/2015/07/29/illinois-budget-impasse-puts-halt-to-mchenry-county-summer-internships-job-training/agjqul9/
- Cubs in '16 - Wednesday, Nov 25, 15 @ 10:34 am:
I agree releasing the email was intended to be a ‘gotcha’ but not convinced it is in principle. Just because Franks supposedly disagrees with the tax breaks doesn’t mean he shouldn’t use them to benefit his district. It would be silly for him to not take advantage of a program; opposition notwithstanding.
- Oswego Willy - Wednesday, Nov 25, 15 @ 10:37 am:
- walker - is On It.
Plus, that gives Franks more than “fair public warning” and it allows both parties to discuss differences without basing the discussion on breaking trust.
- Thoughts Matter - Wednesday, Nov 25, 15 @ 10:37 am:
Oswego Willy -
Adding to your point- it seems to me that the Governor and his staff have done quite a few ‘gotcha’ statements and moves. I think (in my opinion) they do it to show their complete lack of respect for everyone but themselves. Of course, it doesn’t have the effect they think it does.
- Norseman - Wednesday, Nov 25, 15 @ 10:39 am:
“Trash,”"gotcha” and “snark” are the major operating tenets of the frat boys. Willy has accurately described the Rauner issues with this matter.
Regarding Franks, it’s a classic “do as I say, not as I do.”
- Oswego Willy - Wednesday, Nov 25, 15 @ 10:41 am:
- Thoughts Matter -
Yeah, and it goes directly to thst the Rauner Crew does not see the Legislature as Co-Equal and that the Governor is a CEO poised to make clear Rauner rules… while not owning his own choices.
I would’ve used - walker -’s example.
- hisgirlfriday - Wednesday, Nov 25, 15 @ 10:44 am:
I dont see much here.
The Franks e-mail shows him going to bat for his constituents under existing law while his public statements indicate he supports some reforms to the system going forward and has general concerns on the statewide impact of the program. I dont see his comments as foreclosing on other legislators from other districts doing exactly what he did for a constituent under the system as it now stands.
- Abe the Babe - Wednesday, Nov 25, 15 @ 10:47 am:
Why antagonize a person who can be with you 90% of the time?
And why cling on to Dunkin who probably can only be with you 25% of the time?
Makes no sense but I wouldnt dare question the wisdom of these superstars.
- ChicagoVinny - Wednesday, Nov 25, 15 @ 10:53 am:
I don’t see how this is different from governors in other states who oppose the ACA/want to replace it, yet still participate in Medicaid expansion as it best serves their constituents under current law.
- Honeybear - Wednesday, Nov 25, 15 @ 11:03 am:
EGDE is simply corporate blackmail. Wagners letter is a ransome letter. If Republicans are going to scream that the state is broke then fine, we have no money for paying ransome. Fabrik needs to pitch in and help the state without issuing demands or GET OUT! Using the ever popular term, that corporate tax money should go towards helping “taxpayers”. Fabriks profit margin is not the State of Illinois’ concern. Yes I don’t want 264 people to lose their jobs but that is on Fabrik not the state. The death of hostages is on the hostage taker not the victim to whom the demands have been issued. Fabrik put a gun to their own employees heads and said “give me a tax abatement or our employees are going to die.” That’s just sick. Fabrik employees YOU NEED TO ORGANIZE!
- Austin Blvd - Wednesday, Nov 25, 15 @ 11:03 am:
The issue of business tax breaks aside, the release of a letter like Franks’ to bolster support for their decision speaks volumes about the integrity of the governor’s operation.
Transparency when it serves them. Lack of transparency when it doesn’t.
- hisgirlfriday - Wednesday, Nov 25, 15 @ 11:10 am:
@ChicagoVinny
Right. Its also not unlike governors who fundamentally oppose government unions and seek to reform them out of existence but at the same time still do the practical thing and negoriate with existing state employee bargaining units
- Anonin' - Wednesday, Nov 25, 15 @ 11:15 am:
How clever
The SuperStars pimp Jack — always great fun.
The Blagoofians had a fine time doin’ same. (always hate to compare, but this one too easy)
Of course the Blagoofians had to put that asisde to deal with the G. HMMMMM
- walker - Wednesday, Nov 25, 15 @ 11:19 am:
Before we beat people up for lack of perfect consistency, let’s consider those who believe certain personal income tax credits are bad public policy, but take advantage of them while they exist.
- wordslinger - Wednesday, Nov 25, 15 @ 11:24 am:
Curious that the Frat Boys would go out of their way to whack Franks, considering he’s one of their most likely Dem votes in the House.
- Oswego Willy - Wednesday, Nov 25, 15 @ 11:28 am:
To the Franks update;
Very thoughtful response, measured, and owning the email while still framing his own position beyond what the Rauner Crew tried to do in its “Gotcha”
Two points;
From the response…
===It had not crossed my mind that they sent you the communication where I asked that they help my constituent.===
Franks was blindsided, not warned, of this tact.
And…
Again, from the response…
===It would serve the governor better to listen to constructive advice instead of attacking the messenger.===
Listening to advice isn’t the Bruce Rauner forte, and his Crew is towing that line.
I can’t express enough my frustration in the deliberate and obvious obstructionist moves that Rauner and/or his Crew choose when so many see opportunity after opportunity to find common ground, and the Administration finds a way to make it a way to be combative… to just be combative at times.
The statements of former Gov. Edgar haunt my thoughts as I read responses like this specific one by state Representative Jack Franks, a Democratic member.
- Past the Rule of 85 - Wednesday, Nov 25, 15 @ 11:36 am:
It doesn’t matter what they say or do about the Edge program. State corporate welfare will never go away as long as other states are willing to pay the piper. The only way to stop this is to impose a federal tax of 100% of any state or local incentive. Let the move decisions be made based on the attributes of the workforce, infrastructure, proximity to market, etc.
- Todd - Wednesday, Nov 25, 15 @ 11:37 am:
Madigan’s complaint has been he doesn’t think he can trust the Gov. Does releasing this email engender more or less trust among the members he has to deal with?
me thinks not
- Dee Lay - Wednesday, Nov 25, 15 @ 11:41 am:
OW is on point RE: the Franks update
- Daniel Plainview - Wednesday, Nov 25, 15 @ 12:08 pm:
These superstars have the maturity of a preschooler tattling on someone for saying a dirty word.
- Lincoln Lad - Wednesday, Nov 25, 15 @ 12:09 pm:
I find it all kind of funny. Frank’s being caught playing both sides, public versus private; the Gov’s office showing that to the world (which isn’t watching anyway); and a debate on what’s fair and right in such things. How about being consistent, whether anyone is watching or not?
- Oswego Willy - Wednesday, Nov 25, 15 @ 12:13 pm:
- Lincoln Lad -
1) Playing “gotcha” ain’t governin’, buildin’ trust, or findin’ common ground.
2) When Rauner is “caught”, especially by media, it’s “baloney” while the hypocrisy still remains.
Rauner governs in the hypocrisy, so why call out others when they’re as guilty as anyone?
Did I also mention that trust thingy… Yeah, I did.
- Oswego Willy - Wednesday, Nov 25, 15 @ 12:16 pm:
Stupid phone…
“But, you’re on point, they all need to stop the hypocrisy and be consistent.”
Ugh. Apologies.
- Henry Francis - Wednesday, Nov 25, 15 @ 12:26 pm:
Putting to the side the Franks-GO issue, what kind of deal is DCEO negotiating here? 25 jobs and $5 million investment is the MINIMUM required for EDGE - and that is all the company has to do here to qualify for the credits. I thought Franks email made clear they were going to add 100 jobs. Why isn’t DCEO requiring them to create the 100 jobs?
DCEO also seemed to have quite the light touch with the ConAgra deal - that only required 100 jobs.
- Precinct Captain - Wednesday, Nov 25, 15 @ 12:27 pm:
I don’t really see the problem here. Franks helped a constituent by simply forwarding an email when this constituent was being ignored by the superstar bureaucracy.
==- Lincoln Lad - Wednesday, Nov 25, 15 @ 12:09 pm:==
Does this call for consistency apply to the governor’s office, who has been all the over board on the Edge program?
- Lincoln Lad - Wednesday, Nov 25, 15 @ 12:32 pm:
I think it’s kind of a two way street. If you are actively using the program to support credits for a constituent, don’t use the call from the reporter at the AP as the opportunity to harshly criticize the program. That strikes me as completely disingenuous. Keep it real, or don’t grab the spotlight. It was a gotcha moment, and it was probably too hard to resist, even though it accomplishes nothing. Frank’s will do what he’s going to do irrespective.
- Lincoln Lad - Wednesday, Nov 25, 15 @ 12:35 pm:
-Captain-
Say what you mean, do what you say. If you need to hide it, ask yourself if you should even be doing it.
It’s ok to change your mind, but try to act in a way you’d want your family and friends to see and be proud of.
- Abe the Babe - Wednesday, Nov 25, 15 @ 12:42 pm:
I’m gonna plug my nose and defend Franks here. You can work to improve a program while at the same time still help constituents participate in the existing flawed program.
There’s no inconsistency there. It would be like a congressman refusing an earmark because he doesn’t like the earmark process. You do what’s best for your constituents while at the same time pushing reform. Many reputable congressman did just that, and we’re finally successful.
- Blue dog dem - Wednesday, Nov 25, 15 @ 1:37 pm:
Companies employing 400 are not in any way small. These are the 5%ers. When I need to expand my business 25% we are talking adding 4 employees. I can’t even get somebody to pick up the phone. If taxes are too high, make the playing field level for all. Isn’t this america?
- Todd - Wednesday, Nov 25, 15 @ 1:45 pm:
If I dislike the carry law and make public my beefs with it, should I not still try and help people though the system?
- Suburbanon - Wednesday, Nov 25, 15 @ 2:29 pm:
Nothing in this makes any good political sense. Instead of getting some positive PR for keeping an employer to stay in Illinois, the Governor’s staff creates a bigger negative story that only makes them look bad - and petty.
I think they call it cutting off your nose to spite your face.
- Arsenal - Wednesday, Nov 25, 15 @ 2:40 pm:
==You can work to improve a program while at the same time still help constituents participate in the existing flawed program.==
Bingo.
OTOH, as for Rauner upsetting Franks/breaking trust…there’s really been no indication that Franks trusted Rauner anymore than any other D, so there probably wasn’t much to lose.