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In which I once again agree with the Tribune

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Illinois

* Look, I am fully aware that supporting any sort of corporate tax break is definitely not a popular thing to do. But it’s hard to argue with this logic when it comes to ADM’s request…

ADM’s bid is getting a generally cool response from other political leaders … in part because it is not blackmailing the state. They’re reasonably confident ADM won’t move even if they don’t grant its request. […]

If ADM were based in, say, Seattle, and were dangling the prospect of moving its international headquarters to Illinois, you wouldn’t be hearing talk about blackmail. You’d be hearing: What do you want and how fast can you get here?

All true.

* More…

We don’t like the special incentive game that pits states and cities in competition. One estimate a couple of years ago put the nationwide cost of such incentives at $50 billion a year in lost tax revenue. States that win secure work for their citizens, but create tax inequities between employers. States that lose face painful job and tax revenue losses when employers depart.

Illinois should get out of the game … when Texas, Ohio, and the other states that want to poach its jobs get out of the game. […]

Many other factors go into location and expansion decisions for employers big and small. Illinois lawmakers have to get their heads around the fact that they have created an unwelcoming environment for employers.

It’s distasteful and even somewhat unethical. But what will the naysayers scream if ADM decides to move its new world headquarters elsewhere?

* The company has already dropped its request for a break on its headquarters’ utility taxes. The first one to move in any negotiation is almost always willing to move again. Negotiate for a better deal, including a sweetener for Decatur, then get it done.

posted by Rich Miller
Friday, Oct 4, 13 @ 9:58 am

Comments

They’ll get it. I don’t know that $1.2 million a year is worth the effort or bad p.r. for an $80 billion a year multi-national, but that’s their call.

Comment by wordslinger Friday, Oct 4, 13 @ 10:06 am
Whoa, Rich is this the end of world? What’s next Dogs and Cats sleeping together?

And who let the thoughtful person write an op ed for the Tribbies?

Comment by Nearly Normal Friday, Oct 4, 13 @ 10:07 am
One thing that I’ve learned in the whole ‘train’ thing (hence the screen name)–in doing research on the historical financing of railroad construction in the US is that things really don’t change much.
There were certainly ‘bubbles’ in the industry and towns often tripped over each other to offer the most outrageous financial perks to attract the most railroads–many of which had a disasterous outcome and should have never been constructed in the first place.

ADM 2013 meet Union Pacific 1870

It was a candy store then–it’s a candy store now

train111

Comment by train111 Friday, Oct 4, 13 @ 10:16 am
ADM sucks up more government subsidies than just about any company you can name (e.g., ethanol). The cost to taxpayers in revenue lost and increased food prices is in the billions of dollars.

They will get this subsidy because they always do.

Comment by Nonplussed Friday, Oct 4, 13 @ 10:20 am
=== Illinois should get out of the game … when Texas, Ohio, and the other states that want to poach its jobs get out of the game. […] ===

No, Illinois should get out of the game regardless of what Texas, Ohio, etc. do because its bad public policy. Illinois (and other states) should be attempting to lure businesses by offering an even, predictable, business-friendly playing field.

Comment by Just Observing Friday, Oct 4, 13 @ 10:26 am
The problem is that the rules of the game are not set by Illinois, JO. Just sayin

Comment by dupage dan Friday, Oct 4, 13 @ 10:58 am
I’m okay with corporate tax breaks, absolutely, but I just want to look at the picture holistically. I believe we need to close the structural deficit between the tax revenue we collect and government services that most of us support. There are a variety of ways to do this, and not all the ways are carved in stone. It’s a fine line that smart governance must walk, and it takes a spirit of compromise and very hard work.

I posted an article in another thread today that just gladdens me and makes my day. Unions made concessions to keep Chicago’s convention business alive. Now they have a working partnership with business that is bringing conventions to Chicago. I’ll repost the article.

http://www.suntimes.com/22925530-761/work-rule-changes-help-snag-convention-from-indianapolis.html

Comment by Grandson of Man Friday, Oct 4, 13 @ 11:12 am
Here is a way to get out of the game.
http://ilga.gov/legislation/BillStatus.asp?GA=97&DocTypeID=HB&DocNum=6190&GAID=11&SessionID=84&LegID=67549

HB6190 from last session would set up an interstate compact where member states agree not to poach each other’s businesses.

I’d appreciate policy minded people reading and consoderong the merits of the bill as the consensus that this is a dumb way to run economic development policy seems to be growing.

Comment by Dan Johnson Friday, Oct 4, 13 @ 11:44 am
HB 6190 sponsored by convicted felon Connie Howard who poached companies in her own special way.

Comment by 4 percent Friday, Oct 4, 13 @ 12:50 pm
The advantage to keeping a buisness is the income tax we make from the employees, as well as the money the employees spend in the communties.

ADM does nto pay us any income tax as it is, so it is looking to recoup the income tax it witholds from its employees. The problem is that income tax money is one of the beneftis to the State of keeping them here. I support keeping a buisness by giving it tax breaks if it has good salaries for its employees becuase we recoup the money in taxes and sales.

The ultimate question is do we come out ahead? i.e. if ADM pays it employees well, then they make good money to spend on houses, property tax, clothes, baseball games, restraunts etc. Therefore it would not be money lost to keep them here, it is money gained by holding onto employers who pay real middle class wages.

If they just pay minimium wage or low salaries, let them go to texas with all the other minimium wage jobs that cost states in the end.

Antecdotally I beleive ADM pays well, and therefore it helps support true middle class and better level wages in the State. If I am correct in that, then give them some edge money and encoruage them to be loyal to the State. They are driving up our wages and filling our State with people who have disposable income.

We dont need more Jimmy Johns and Wal-marts, we need more ADM’s

Comment by Ghost Friday, Oct 4, 13 @ 1:16 pm
Agreed.

Comment by A guy... Friday, Oct 4, 13 @ 1:58 pm
In some ways, we’re already beating Texas. We just have to get our jobless rate down. Corporate tax breaks, or closing loopholes, are some of the many things we can do on a case-by-case basis. Texas has the highest rate or people without health insurance (ad infinitum, sorry), and the government won’t expand Medicaid to help its residents. We expanded Medicaid and are promoting our new healthcare system. If Obamacare goes as planned, many people will benefit from it. Mississippi won’t expand Medicaid, and some of its residents are paying a terrible price.

http://www.reuters.com/article/2013/10/04/us-usa-healthcare-mississippi-idUSBRE99304320131004

We fix our tax system and budgets, work with corporations, form partnerships with labor, expand health insurance and pass progressive social legislation like legalizing SSM, and I believe we will be in much better shape in the long run, better than the no income tax states.

Comment by Grandson of Man Friday, Oct 4, 13 @ 2:16 pm
=== The problem is that the rules of the game are not set by Illinois, JO. Just sayin ===

@DuPage Dan — I see your point, but then doesn’t that infer that Texas, Indiana, etc. set the rules? Illinois doesn’t have to play under these sets of rules just cause some other states do. And I don’t think it would be at our peril. Illinois can compete with its own set of policies.

Comment by Just Observing Friday, Oct 4, 13 @ 2:46 pm
It is difficult to pretend these companies bear the full burden of blame when we are the ones who opened this Pandora’s box.

Comment by Formerly Known As... Friday, Oct 4, 13 @ 2:49 pm
I dunno ’bout this one–they’ll keep those thousands (4400, I believe) of jobs in Decatur, of course, but they could really send a message stick it to Quinn and the Legislature if they feel like it and move somewhere else big, nice, and relatively close, like Indianapolis, for instance, instead of Chicago–and THEN would we hear the whining begin…!

Comment by Just The Way It Is One Friday, Oct 4, 13 @ 3:14 pm
–if they feel like it and move somewhere else big, nice, and relatively close, like Indianapolis, for instance, instead of Chicago–and THEN would we hear the whining begin…!–

Meh, these guys are already hooked up to the golf courses, clubs, cultural institutions up north, and have been for a long time.

They’re not beefing, they just want this little thing. Why Quinn chose to take it as a hostage is beyond me. It’s nothing in the scheme of things.

Lot of hostage-taking these days, lol.

Comment by wordslinger Friday, Oct 4, 13 @ 3:18 pm
Duh? They’re going to move and create the jobs whether they get the tax money or not. But let’s cough up $24m to line the pockets of a profitable corporation just because…? Just because WHAT?

Comment by eyewitness Friday, Oct 4, 13 @ 3:38 pm
The controversy over a measly 100 or so jobs staying or leaving is ridiculous in light of the State having the second highest unemployment in the country- where was the outcry when Klein tools a fixture in Illinois for 70 years relocated to Texas and moved nearly 1000 jobs? If ADM will only stay if they get the incentive- tell them adios

Comment by Sue Friday, Oct 4, 13 @ 3:43 pm
=these guys are already hooked up…=

Well, you can see how connected I am, Word…didn’t know that–obviously makes it FAR more unlikely for them to bolt then.

Comment by Just The Way It Is One Friday, Oct 4, 13 @ 3:48 pm
===where was the outcry when Klein tools a fixture in Illinois for 70 years relocated to Texas and moved nearly 1000 jobs? ===

One reason is that Texas kicked in a boatload of money. Also, I think your job loss estimate is way high.

And using the loss of Klein after another state gave them money to argue against a tax break for ADM to open a world hq and a new tech center is a bit incongruent, if you ask me.

Comment by Rich Miller Friday, Oct 4, 13 @ 3:58 pm