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* Power Construction is moving from Schaumburg to Chicago (15 miles, according to Google) and is getting $2.4 million in state assistance over ten years. That naturally prompted questions…
Dan Seals, the former congressional candidate now serving as assistant director of the Ill. Department of Commerce and Economic Opportunity, was asked how he justifies giving a tax break to an Illinois company to move a short distance from suburb to city.
“We didn’t give a company a tax credit to move a few miles. What we did is saw a company that we thought was a good company that was looking to leave the state entirely that was receiving several million dollars to come to another state. We wanted to compete. We thought it was a good company to retain. And that’s what we did. And we won,” Seals said.
“You only get [the state aid] if you create the jobs. If you don’t create the jobs, you don’t get `em. And they’re based on the tax revenue that comes off the job. So, the state comes out ahead.”
Power got an EDGE tax credit. About the EDGE credit…
The EDGE program is designed to offer a special tax incentive to encourage companies to locate or expand operations in Illinois when there is active consideration of a competing location in another State.
The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. The non- refundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years.
To qualify a company must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full time jobs in Illinois.
In other words, if a company is being lured by another state and they’re willing to create some new jobs, the state can let them use their employees’ state withholding taxes to lower their corporate income tax bill. Power says it will create 30 new jobs.
Still, it would be nice to know what state was competing with us and how much they were offering.
posted by Rich Miller
Thursday, Sep 26, 13 @ 10:37 am
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So, 2.4 Million for 30 jobs, that’s roughly 800k/job, or over 10 years, 80k per head per year.
That return on investment kinda sucks.
Comment by John Bambenek Thursday, Sep 26, 13 @ 10:41 am
Looking forward to the Quinn press release in 3 months about the ‘jobs’ created.
Comment by OneMan Thursday, Sep 26, 13 @ 10:44 am
From the Power website:
–Founded in 1926, Power is the largest construction firm focused exclusively on serving greater Chicago.–
That would seem to limit other states in the running.
And even if they were looking at, say, Hammond, what benefit would that be to Indiana, or loss to Illinois? The lion’s share of their business appears to be in greater Chicago.
Comment by wordslinger Thursday, Sep 26, 13 @ 10:46 am
It seems relatively easy to create documentation that they are considering another state. All a company has to do is reach out to another state and play that state against Illinois.
Illinois would be far better off focusing on creating a universal business friendly environment instead of trying to pick winners and losers. As it, such programs are ripe for unfair treatment, abuse, and creates a more complex business climate.
Comment by Just Observing Thursday, Sep 26, 13 @ 10:49 am
John, I think you mean $80k/job over 10 years which would be $8K per head peer year
Comment by PoolGuy Thursday, Sep 26, 13 @ 10:51 am
Nevermind, I put the crackpipe down.
All better now.
Comment by John Bambenek Thursday, Sep 26, 13 @ 10:56 am
Great, they are starting a war with Schaumburg. Jerks. Dan Seals is part of the orphanage of failed congressional opponents working for Quinn as stated by the WLSAM radio morning newsguy.
Rich, you should threaten to move out of state to Florida or Louisiana.
That way, you and Barton could set up in the Trump Tower with your EDGE credit. Wumpus would be head of security for the added job. Plus, you could pay Barton in more than Twinkies and Ferrara Pan Candy, so that would be 2 jobs.
Comment by Wumpus Thursday, Sep 26, 13 @ 10:59 am
no worries, it’s a heck of a drug, to paraphrase Rick James
Comment by PoolGuy Thursday, Sep 26, 13 @ 11:00 am
Keep picking and choosing who gets breaks. That is the IL way. Seems to chase the rest away. NOBODY likes the game played that way. So they take there ball and go.
Comment by bk Thursday, Sep 26, 13 @ 11:07 am
yea to bad the Governor is bent on driving other business’ out of the state. . .
http://www.guns.com/2013/09/20/lewis-machine-tool-relocate-illinois/
say bye bye to 100 plus jobs and a company that does by my guess $60 million a year
Comment by Todd Thursday, Sep 26, 13 @ 11:08 am
This state against state poaching is so common now’s I bet there’s consultants who specialize in advising companies on how to work the system.
Comment by Sir Reel Thursday, Sep 26, 13 @ 11:13 am
My entire family has left IL and it makes me sad. We are now selling and moving away from this socialist experiment based on the politics of this State. Keep an eye on your Republican neighbor States. What a contrast!!!!!
Comment by bk Thursday, Sep 26, 13 @ 11:15 am
Corporate welfare is overtaking people welfare.
Comment by Rufus Thursday, Sep 26, 13 @ 11:21 am
bk
So into what state bastion of liberty and poverty are you relocating the family fortune? Just so we know where to forward the mail…
Comment by Old and In The Way Thursday, Sep 26, 13 @ 11:41 am
They need to make these pay-to-stay tax credits recoverable. If the company ever leaves the state in the future, they should have to refund the credit with interest. That’d make a lot of companies more carefully consider using them and, for those that take them, be a disincentive for them to leave. Another state would have to offer them enough money to pay for their move and to pay off their IL credit for the company to find it worth moving.
Comment by thechampaignlife Thursday, Sep 26, 13 @ 11:43 am
Rufus
Corporate welfare far exceeded people welfare a long time ago. Between the states and the federal government it’s not even close. That is just the obvious welfare and doesn’t even consider the defense budget, talk about corporate welfare! Wanna buy a $600 hammer?
Comment by Old and In The Way Thursday, Sep 26, 13 @ 11:53 am
@bk:
Your normal trolling website down today?
Comment by Demoralized Thursday, Sep 26, 13 @ 3:16 pm
Calling me a troll. Way to go you must be a liberal because they usually either call you a racist or use some form of personal attack in place of a logical point. I hope your not the last one out of this Detroit buisness model of a State. But, it sounds like you will be. And yes my family fortune will not be transfered to the teachers unions and public pensions as will whatever you have left after paying your FAIR share to the corupt machine you are so comfortable with. I really do pity you all. I will be paying ZERO State taxes and propery taxes that are not criminaly high. As a matter of fact warmer weather will be a plus.
Comment by bk Thursday, Sep 26, 13 @ 4:28 pm