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United gets promise of fuel tax break

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Illinois

This story may get some traction.

Gov. Rod Blagojevich has promised to provide some relief from high fuel prices, but not for the millions of motorists facing stiff prices at the pump.

Rather, as part of a package of incentives offered to keep United Airlines from moving its headquarters out of state, the governor has pledged to work with the General Assembly to reduce the sales tax it charges the air carrier when it fills the tanks on its planes.

The move comes as Blagojevich and Democratic leaders have soundly rejected similar proposals to reduce the amount of sales taxes the state charges motorists when they fill up their cars, trucks and SUVs.

Blagojevich spokeswoman Rebecca Rausch denied the incentive was a case of the governor looking out for Big Business instead of the little guy.

I hope the company got that promise in writing.

posted by Rich Miller
Wednesday, Jul 26, 06 @ 5:49 am

Comments

That is so typical â€“ forget about providing a little relief for the taxpayers of Illinois. Only take care of the big company that can provide the large donation to your campaign fund.

Comment by state worker A Wednesday, Jul 26, 06 @ 6:05 am
Velma is right: Rod doesn’t look out for big business OR the little guy. Only himself.

Comment by Ruh Roh Wednesday, Jul 26, 06 @ 6:29 am
I’m surprised Rod didn’t offer to just give United Airlines the State of Illinois Thompson Building in downtown Chicago. Giveaways are the extent of his economic proposals.

Comment by Anonymous Wednesday, Jul 26, 06 @ 6:36 am
$20.00 for less than half a tank and I drive a car that gets 29 mpg. This governor does not represent the voters and citizens of this state - he represents himself. His own party members are wary of him and his big ideas and I’m sure banking institutions are about ready to give Illinois the boot. It’s all Rod, all the time - in his mind.
He has completely wasted an opportunity handed to him to do some good for this state and this country. I too how that United’s attorneys got his promises in writing and in a couple of different languages, just to make sure.

Comment by Disgusted Wednesday, Jul 26, 06 @ 6:38 am
Let’s see…….United just emerged from Chapter 11 bankruptcy protection, having palmed off its pension plan onto the taxpayer-subsidized Pension Benefit Guaranty Corporation.

Now the suits are moving their headquarters from Elk Grove to downtown Chicago (having wrangled a big fat TIF subsidy from Richie Daley).

Still not enough. The crybabies now need relief from fuel taxes.

People are sick and hungry and poor in this state, and our public officials have run our finances into a ditch — and yet the pols fall all over themselves in a rush to give outrageous tax breaks to the fat cats.

United’s been screwing up for years, and we taxpayers should subsidize them??

Excuse me for asking, but — whatever happened to capitalism?

Comment by Flee the Friendly Skies Wednesday, Jul 26, 06 @ 7:44 am
Why is this tax break only for UAL, there are many other companies who are facing the same fate? The Guv doesn’t want to give anything back to the rest of the citizens or business in his state. Rich could you check with the “old truth teller” Abby, and find out why this is?

Comment by Dr. Yan Wednesday, Jul 26, 06 @ 8:58 am
How would everyone (in Illinois, that means Democrats) react to this if the governor was a Republican? “Just another Republican looking out for big business.” Right? Well, now it’s a Democrat cutting a deal with big business. Any comments?

Comment by Wildcat Wednesday, Jul 26, 06 @ 9:24 am
Also interesting is the fact he can find breaks for United, money for stem cell research, but can’t seem to find the cash to pay Medicaid bills on time.

Comment by Wildcat Wednesday, Jul 26, 06 @ 9:27 am
I guess those corporate loop-holes aren’t so bad after all.

Comment by Anon. Wednesday, Jul 26, 06 @ 9:59 am
tax breaks for the little guy are a terrible idea. If anyone took econ 101, they’d recognize that there is a clear negative externality to consumption of gas by SUVs and the like. They’d also recognize that there’s a possitive externality created by having a huge company like United doing buisness in the state. Good move on both counts by Rod.

Comment by Econ 101 Wednesday, Jul 26, 06 @ 10:42 am
The gov is just looking out for the less fortunate in society. This applies to the working poor (”AllKids”) as well as bankrupt commercial air carriers (”United”).

Comment by Six Degrees of Separation Wednesday, Jul 26, 06 @ 12:58 pm
101, you should have stuck around for my course. Rod flunked out. If he had made the grade, he would have learned that tax abatements to underperforming companies in a competitive market environment have an extremely small effect on the overall success or failure rate of the companies. Companies succeed or fail ultimately as a function of more complicated factors including the overall economies in which they operate, the supply/demand for their goods/services, and the skill and efficiency of operations.

The “halo effect,” or “possitive externality” as you call it of having a corporate headquarters relocate within your region is about as expensive and about as useful to the economy in the long run as buying a new Buick every six months because you love that new car smell. The only people that get well off that deal are the car dealer and the next buyer of the low-mileage one-owner.
In this case, United gets a new Buick, Chicago gets a low mileage one-owner, and the Illinois taxpayer gets hosed.

At least they could have promised not to lose so much luggage or something.

Comment by Econ 301 Wednesday, Jul 26, 06 @ 4:21 pm
I checked gas prices around the country today, all four corners, central and western state cities and the big ones, LA, DC, NYC, Miami, Tampa, etc. Of the twelve I researched (on Gasbuddy.com), the highest two were NYC and LA. Guess which city was 3rd - Springfield, IL!!!! Talk about getting hosed. We’re running with the big guys now.

Comment by Disgusted Wednesday, Jul 26, 06 @ 7:32 pm