Companies Can’t Lose, but Can Illinois Taxpayers Win With Incentives?

Companies Can’t Lose, but Can Illinois Taxpayers Win With Incentives?
November 13, 2013

Benjamin Yount

Benjamin Yount writes for Illinois Watchdog. (read full bio)

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

The Illinois Legislature last week 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.

‘All Should be Eligible’

“Everybody should be eligible for the same credit,” state Rep. Jeanne Ives (R-Wheaton) said from the floor of 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 tax credits and what tax credits are designed to do,” state Rep. Mike Zalewski (D-Chicago) 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.

Incentive for In-State Move

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

Office Depot has the old Office Max headquarters in Naperville, Ill., 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,” state Rep. Jack Franks (D-Marengo) said.

$160 Million Lost to Incentives

Illinois has lost $160 million to special tax breaks under Gov. Pat Quinn (D), 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,” state Sen. Matt Murphy (R-Palatine) 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.

Used with permission of Watchdog.org.

Benjamin Yount

Benjamin Yount writes for Illinois Watchdog. (read full bio)