* This new law has been touted by several business groups and editorial pages as good government…
The law took effect immediately and extends [the enterprise zone program] that began in 1982 for another 25 years. Enterprise zones essentially give tax breaks to businesses within the designated areas. The breaks include an exemption from the retailers’ occupation tax paid on building materials and a tax credit for jobs created.
Quinn’s decision was timely, because the 97 enterprise zones around Illinois had been set to expire next year. Considering some of the bad publicity Quinn has received over the state’s image as being less than business-friendly — such as Peoria-based Caterpillar Inc.’s decision earlier this year to go to another state to build a new plant that will bring with it 1,400 jobs — the governor needed to do something to show that he wants businesses to stay and grow in Illinois.
The new law creates a board to oversee the process of determining which companies are eligible to participate in enterprise zones, and it will add a few of them. It also beefs up reporting requirements of companies receiving tax benefits from the program.
Quinn said enterprise zones have helped create and retain jobs. Businesses within enterprise zones have created more than 350,000 jobs, according to estimates from Quinn’s office.
Madison County’s experience with its enterprise zone has been more than positive. The Gateway Commerce Center is located at the intersection of Interstate 270 and Interstate 255/Illinois 255 and has convenient access to Interstates 55 and 70, as well as to airports, railroads and barge terminals.
The enterprise zone falls within the boundaries of both Edwardsville and Pontoon Beach, as well as unincorporated Madison County. Supporters say Gateway Commerce Center has added to the tax base of every taxing district that has property within the enterprise zone.
* I’ve driven by that Gateway Commerce Center. It’s huge. And it’s expanding…
An $80 million construction job and about 800 new, permanent jobs could be waiting in the wings if the Edwardsville City Council, Pontoon Beach Village Board and Madison County Board approve ordinances expanding the existing enterprise zone encompassing Gateway Commerce Center. […]
Besides the 800 new, permanent jobs at the new facility, the project represents 400 construction jobs over a 13-month period.
He said the warehouse would be twice the size of the 1.2 million-square-foot Hershey warehouse, one of the original developments in Gateway Commerce Center.
“It’s really quite amazing,” Towerman said.
* But sometimes, government incentives can go way too far. For instance, take the subsidies for Cabela’s and Bass Pro Shop..
An exhaustive investigation conducted by the Franklin Center for Government and Public Integrity found that the two competing firms together have received or are promised more than $2.2 billion from American taxpayers over the past 15 years.
“Retail is not economic development. People don’t suddenly have more money to spend on hip waders because a new Bass Pro or Cabela’s comes to town,” says Greg Leroy, executive director of Good Jobs First, a non-partisan economic development watchdog group based in Washington, D.C. “All that happens is that money spent at local mom and pop retailers shifts to these big box retailers. When government gives these big box stores tax dollars, they are effectively picking who the winners and losers are going to be.”
* The numbers…
* Cabela’s has received $551 million in local and state assistance during the past 15 years.
* Bass Pro Shops received $1.3 billion in local and state assistance during the same period.
* The federal government helped ensure liquidity for Cabela’s’ credit card division by providing $400 million in financing for the purchase of the company’s securitized debt.
* And check out the rationale…
Numbers don’t always tell the whole story, counters Larry Whitely, a spokesman for Bass Pro Shops, a privately held company based in Springfield, Missouri. Whitley argues the stores should be viewed as an amenity being added to a community — much like one might view a park or a library.
“These aren’t just stores – they are natural history museums,” he says. “Every store is designed to reflect the unique natural environment of the area in which it is located.” He adds that often a Bass Pro store is an anchor development that attracts additional retailers.
* But…
In fact, Ball State economist Hicks studied the economic impact of seven Cabela’s stores that opened between 1998 and 2003 and found that despite millions of dollars in economic development incentives given to the retailer, there had been no net gain in jobs detected in the communities one year after the stores opened.
“It’s not like folks suddenly have more money to spend on hip waders once a Cabela’s opens up. What generally happens is that instead of buying those hip waders from an independent business, they go to big box store,” says Leroy of Good Jobs First.
…Adding… And then there’s this disputed incentive…
Gov. Pat Quinn used his veto power Friday to reject a bill that would have required utility companies to purchase a synthetic natural gas to be made at a proposed plant that was to be built in the East Side neighborhood.
Quinn’s rejection of the bill puts the future of the plant in jeopardy because the agreement requiring companies to purchase the gas for the next 30 years was considered part of the guarantee making the plant economically viable. The plant is to be operated by Leucadia National Corp. on a portion of the former Republic Steel site near 116th Street and Burley Avenue.
Tom Shepherd, a spokesman for the Hegewisch-based Southeast Environmental Task Force, said his group is not willing to proclaim the plant dead – even though it led lobbying efforts during the summer to encourage Quinn to reject the bill.
“There’s no simple answer,” Shepherd said. “This plant has some serious business interests that want it built, and they may try to resurrect it in the future.”
