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Companies can’t lose, but can Illinois taxpayers ever win with incentives?

By   /   November 7, 2013  /   No Comments

By Benjamin Yount | Illinois Watchdog

SPRINGFIELD, Ill.—  Illinois lawmakers are determined to lower the state’s 9.2 percent unemployment rate, even it that means paying big companies to do business.

WE PICK, YOU PAY: Critics say Illinois lawmakers should not pick winners and losers.

The Illinois Legislature on Wednesday gave first or final approval to three tax incentive packages:

  • Archer Daniels Midland, Illinois’ agribusiness giant, asked a Senate panel for $30 million in tax breaks to move 200 jobs to a new world headquarters in Chicago. The company would also get tax breaks for adding 500 jobs over the next five years to its former home in Decatur.
  • Office Depot, which has merged with Office Max, is asking for $53 million in tax incentives to possibly place its world headquarters in the Chicago suburbs. Illinois senators approved the request.
  • The Illinois House rubber-stamped a $5 million tax break package to lure chemical company Univar to Illinois from Washington state.

“Everybody should be eligible for the same credit,” suburban Republican Jeanne Ives said from the Illinois House. “Instead, what we do here in Illinois is decide who is going to be a winner and who is going to be a loser in the marketplace.”

Ives said “about 10 different companies” have special tax break requests pending before the Illinois Legislature.

Lawmakers shepherding the tax incentives through the statehouse say Illinois needs the jobs.

“There’s been a lot of discussion … about the use of (these) tax credits and what tax credits are designed to do,” Chicago Democrat Mike Zalewski said. “(Tax credits) are designed to be an incentive, to incentivize a company to relocate to Illinois from another state.”

Zalewski said Univar wants to move to Illinois from Redmond, Wash.

ADM, however, wants to move its world headquarters 180 miles from Decatur to Chicago.

ILLINOIS OR FLORIDA? Office Max and Office Depot are shopping for a new headquarters in both Illinois and Florida.

Office Depot has the old Office Max headquarters in Naperville and the Office Depot headquarters in Florida. The company will simply choose one or the other.

“I don’t believe we should be doing special winners and losers, unless the state is the winner,” suburban Democrat Jack Franks said.

Illinois has lost $160 million to special tax breaks under Gov. Pat Quinn, Franks said. It has more than $7 billion in unpaid bills and, Franks said, giving away tax dollars is not going to erase those debts.

“I wish we didn’t have to do this on a piecemeal basis. I wish we could make the same fair deal for everyone across the board,” Republican Sen. Matt Murphy said. “But there is no getting around the fact that we have the second highest unemployment in the country.”

Murphy blames Illinois’ dismal unemployment rate on “failed policies” from the state Capitol.

Nevertheless, the Legislature is expected to approve all three tax deals, perhaps this week.

Contact Benjamin Yount at BYount@Watchdog.org and find him on Twitter @BenYount.

 

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