Friday, Oct 2, 2015
* There are some caveats to remember when reading today's Tribune story. First, businesses aren't infallible nor are they necessarily permanent. Stuff happens, stuff changes, companies go out of business. Second, the Great Recession most certainly did require some drastic actions, including giving tax breaks to help Illinois companies survive.
Illinois' flagship job program has awarded millions of dollars to companies that never hired an additional employee.
It's doled out millions more in tax breaks for corporations that eliminated jobs and became smaller.
And it's allowed companies to reap lucrative rewards and then relocate to other states without penalty or repayment.
Illinois cut these deals through a strategy dubbed EDGE — short for Economic Development for a Growing Economy — that was launched in 1999 by Gov. George Ryan as a way to create jobs and lure businesses from other states.
But what began as a modest number of tax breaks for a handful of companies has mushroomed into a billion-dollar giveaway rife with failure.
24 Comments »
- Keyrock - Friday, Oct 2, 15 @ 10:17 am:
About time this got the press it deserves.
- Wordslinger - Friday, Oct 2, 15 @ 10:18 am:
Very expensive p.r. machines for politicians at every level all over the country.
- Linus - Friday, Oct 2, 15 @ 10:22 am:
"(These business) incentives also carry a steep public cost. Every dollar awarded to a company is a dollar not collected to fund basic public services like education, transportation and health care."
Not that anyone's missing those dollars these days. Like people in need of LIHEAP assistance or mental health services, working-poor folks needing child care help, kids with developmental problems who are in need of therapy, etc etc ad nauseum.
- ihpsdm - Friday, Oct 2, 15 @ 10:26 am:
The incentives weren't even needed, in the case of ConAgra. They told Nebraska that they would have moved regardless of the incentives offered.
Only 300 workers are moving from Omaha to Chicago. The rest of the move to the Merchandise Mart includes employees from Naperville, which is not a net gain for the State of Illinois.
This move benefits Downtown Chivago, NOT Illinois, and incentives are being given when they weren't necessary.
I wish the state would focus more on helping the startups at 1871. Organic job creation from those types of companies is what this State needs. Poaching jobs from other states can only go so far.
- Tournaround Agenda - Friday, Oct 2, 15 @ 10:26 am:
It's really too bad the Trib editorial board doesn't read their own paper.
- Jasper - Friday, Oct 2, 15 @ 10:26 am:
Did Rauner benefit from this boondoggle?
===This move benefits Downtown Chivago, NOT Illinois===
You might consult a map.
- walker - Friday, Oct 2, 15 @ 10:29 am:
Who's ready to publicly consider support for what's in Jack Franks' bill?
Is decreasing the government giveaways to big business part of Governor Rauner's "pro-business reforms?" Is no money for ConAgra part of his "Turnaround agenda?"
These conclusions put Rauner into a real box. Is he pro-Illinois, or more narrowly pro-big business? Suspect even the Tribune Editorial Board is choking on this reporting.
- SAP - Friday, Oct 2, 15 @ 10:29 am:
==The state thus could give tax breaks to one arm of a company for 25 jobs while the other arm has already cut 600 jobs.== This needs to be addressed.
==Businesses in EDGE must pay back tax credits if they close down during the first five years, a provision that has affected about a half-dozen companies since the program began. But companies pay nothing back if they close after the fifth year.== Guess how far Mitsubishi is to the 5-year mark with the Bloomington plant and, for bonus points, guess how much longer they will keep a skeleton crew running the plant.
- cdog - Friday, Oct 2, 15 @ 10:38 am:
Great example of "corporate welfare" that even Charles Koch talked about in August 2015, "This means stopping the subsidies, mandates and preferences for business that enrich the haves at the expense of the have nots."
Those corporate welfare bums. Maker? Uh, no. Taker! Just a bunch of lazy lima beans!
- Beaner - Friday, Oct 2, 15 @ 10:49 am:
One of the audit finding of the JPTA (Jobs Partnership Training Act) twenty-five years ago was that Catepiller received millions to train workers when headlines were about the "Rust-belt", and all they could show for it, was where it was deposited into the Corporate General Fund. No new programs, no evidence dollar one was used to train anyone for anything.
Very skeptical about the privatizing of the Department of Economic Opportunity. Loss of Transparency is desired as the usual malfeasance is to be kicked up a notch?
- Team Sleep - Friday, Oct 2, 15 @ 10:55 am:
Sorry - meant to type "pretty darn good bill". Whoops!
- Anon. - Friday, Oct 2, 15 @ 10:56 am:
walker @ 10:29 am ==Who's ready to publicly consider support for what's in Jack Franks' bill?==
You mean the bill that does nothing to cut back the EDGE credit, but would create a new economic development corporation responsible for "negotiating" EDGE credits (subject to approval by DCEO, of course)?
- Worth It - Friday, Oct 2, 15 @ 11:04 am:
EDGE needs to be completely dismantled, the gains these funds may (or may not) incentivize have more of negative impact on the small and mid-size businesses these connected companies compete with. More of the tax burden is spread to companies and individuals with less of a wherewithal to pay via economies of scale. How anyone can support an unlevel playing field is beyond me.
- Formerly Known As... - Friday, Oct 2, 15 @ 11:18 am:
If only IL still had a few mill o that EDGE $ now…
==Very skeptical about the privatizing of the Department of Economic Opportunity. Loss of Transparency is desired as the usual malfeasance is to be kicked up a notch?==
Well said @Beaner. Sounds like http://chicago.suntimes.com/chicago-politics/7/71/163847/navy-piers-private-operator-exempt-from-public-records-law
- Mama - Friday, Oct 2, 15 @ 11:24 am:
"Very skeptical about the privatizing of the Department of Economic Opportunity." I believe DCEO has already been privatized.
- Joe Biden Was Here - Friday, Oct 2, 15 @ 11:53 am:
It's hard to imagine that Rauner's plan to privatize economic development will be less of a corporate giveaway.
- The Way I See It - Friday, Oct 2, 15 @ 12:50 pm:
Modern American capitalism - socialize costs, privatize gains
- Newsclown - Friday, Oct 2, 15 @ 12:51 pm:
I remember when George Ryan introduced this program: at that time, it was nominally about helping businesses literally at the edge or perimeter of the state line, where competition just across the border on things like consumer products, even simple things like cut-rate cigs and groceries - or manufacturing and raw materials suppliers - was hurting Illinois business owners. Over the years, EDGE has grown ever-larger, as a convenient existing "vehicle" for recruiting new business development.
You gotta admit, the timing of the ConAgra give-away is really bad, considering the devastation goin' on with Rauner's psuedo-budget. And, it probably wasn't even necessary. The Con-Agra head guy lives here already - did we think he would ENJOY longer commutes to visit the office? Did that really REQUIRE a bribe to move the company here? See recent variations on this theme with Cat and Boeing.
- Blue dog dem - Friday, Oct 2, 15 @ 1:11 pm:
At long last…exposure to political pork at its finest. This tool wouldn't be necessary if we tweaked taxes in our state. That way our politicians couldn't pick winners and losers and ALL businesses could have a level playing field.
- plutocrat03 - Friday, Oct 2, 15 @ 1:25 pm:
The worst part of this boondoggle is that in some of the money deducted from the employees paychecks is allowed to be kept by the employer.
What a crock.
- RD55 - Friday, Oct 2, 15 @ 2:41 pm:
Hey Gov. I think the Trib found some of that waste and maybe fraud you wanted to cut out of the budget!
Oh, ConAg needs a few million . . . Never mind.
- Arthur Andersen - Friday, Oct 2, 15 @ 2:43 pm:
What were they thinking when they gave money to an investment firm to "retain jobs?" So the brokers are going to move away from their moneybags suburban clients. Yeah, right.
- burbanite - Friday, Oct 2, 15 @ 4:35 pm:
I knew a guy who lost his job in one of these "deals", they closed his company, (about 400 union layoffs) gifted their contracts to another co. for nothing in return (?) Then the other co. got a multimillion dollar incentive for creating "new" union jobs of around an equal number (but if you know about union jobs they did not reach full scale for over a year from date of hire and if you had worked for the old co. you had to apply and start as a newbie). I complained, no one responded or even acknowledged it. And it wasn't in Chicago.
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