By Jes Greene
Illinois News Network
With Illinois ranked third in the nation for unemployment and companies fleeing to lower-tax states, corporate incentives will be an issue for whoever is elected governor in November.
And most of the gubernatorial candidates have track records supportive of tax breaks for select businesses.
The state has tried to stem this migration of jobs from the Land of Lincoln by offering some companies special tax breaks.
But critics say the practice unfairly benefits some businesses while leaving competitors at a disadvantage. They contend ordinary taxpayers are often left paying for a disproportionate share of government services.
Illinois has an unemployment rate of 8.6 percent, higher than all but Nevada and Rhode Island. That’s despite the enticements in a tax credit program in place since 1999 called EDGE, or Economic Development for a Growing Economy.
To qualify, businesses must invest in the state, create jobs and increase current operations or expand to a new location. Businesses must also prove they have competitive offers to move across state lines.
The gubernatorial candidates vary in their stances on these incentives.
After the House adjourned in December without voting on a special incentive for Archer Daniels Midland, state Sen. Bill Brady, R-Bloomington, called on Gov. Pat Quinn to reconvene the House to pass the deal.
But no vote was taken. ADM announced it is moving its corporate headquarters from downstate Decatur to Chicago. The future of other ADM office jobs in Decatur remain a question mark.
“Incentives have to be a win-win proposition. We have to make sure they’re a win for the state of Illinois as taxpayers and a win for the communities and workers,” Brady said.
In 2013, state Sen. Kirk Dillard, R-Hinsdale, co-sponsored a bill to grant EDGE incentives for Univar, a $10 billion chemical distribution company, to move to Illinois.
Dillard says he hopes incentives will soon be unnecessary.
“While we may need to continue to offer some incentives in the very short term, I want to make sure that small businesses have the same opportunity as the big guy for the kinds of advantages they need to become entrepreneurs,” Dillard told Illinois News Network.
Bruce Rauner has called for lowering taxes, reducing regulatory burdens and reforming workers compensation, the tort system, the cost of insurance, environmental restrictions and labor regulations.
“We are a regulation heavy, restrictive, heavy bureaucracy state,” Rauner said in a gubernatorial debate held Tuesday in Springfield. “We need to become pro-free enterprise and pro-growth again so we are stealing businesses back from Indiana rather than the other way around.”
Rauner’s campaign did not respond to repeated inquiries from Illinois News Network on where he stands on corporate incentives.
Illinois Treasurer Dan Rutherford is the only GOP hopeful to stand against the incentives.
“My contention is I want all of these marquee companies to stay here in the state of Illinois, but we don’t need to have special legislation drafted for just one company,” he said. “If you’re going to change the law because it’s good for one company, change the law so that it’s all applicable for those of that same type of company.”
Despite passing tax incentives for Sears Holdings Corp., CME, Caterpillar Inc., Motorola, Navistar and others since assuming office in 2009, Quinn says it may be time for a change in direction.
“I really think this is, the coming year, a good opportunity to take a step back and examine the tax code and the incentives in Illinois, and I’ve spoken to Speaker Mike Madigan and other leaders as well, and I think the coming year is a good time to take a look,” Quinn said in a December interview reported by CBS St. Louis.
Quinn did not elaborate on specific plans.
According to a FOIA obtained by INN, between 2001 and 2012 over $527 million in EDGE credits have been awarded to almost 250 companies in Illinois.
Caterpillar has received EDGE tax credits, but has not benefited from specific legislation within the EDGE tax program.