About face

About face

House Speaker Madigan has struck a populist pose on corporate tax incentives, denouncing the very practice he previously embraced.

Illinois House Speaker Michael Madigan plays his cards close to the vest, making few statements and answering even fewer questions.

So when he speaks, it means something, even though Madigan often makes a point of being less than clear. So it was interesting, if not instructive, on Wednesday, just one day after Illinois lost 1,600 Naperville jobs to Boca Raton, Fla., that Speaker Madigan issued a ringing denunciation of providing tax incentives to retain businesses that are considering a move out of state.

"We must resist the temptation to cave to corporate officials' demands every time they impose a deadline for payment in exchange for remaining in Illinois, and end the case-by-case system of introducing and debating legislation whenever a corporation is looking for free money from Illinois taxpayers," he said.

Madigan's statement was a combination of demagogic flim-flam. ...

"So I find it very difficult to support tax giveaways for corporate CEOs and millionaire shareholders whose companies pay little in state taxes."

... and a reasonable call for a serious discussion of a complicated issue.

"We should instead take a more long-term approach to helping all job-creating businesses in Illinois thrive and succeed, including thoroughly reviewing how we currently provide incentives to big corporations."

So now he tells us. Speaker Madigan's words come late in the game. He was complicit in recent agreements that offered incentives to Sears Holding and CME Group. It is theoretically possible that Madigan has sincere reservations about this approach. But, given his history as an amoral political tactician, it is plausible that Madigan's statement is meant to provide political cover after losing Office Depot and setting the stage for the possible loss of Decatur-based ADM.

Here's the background.

Office Depot of Florida is merging with OfficeMax of Illinois. Undecided about where to locate the merged headquarters of the two companies, Office Depot entertained offers from Florida and Illinois. Florida offered incentives. Illinois did not because Madigan refused to allow a Senate-passed incentives bill to be voted on in the House. Tired of waiting for a decision, Office Depot accepted Florida's offer and 1,600 Naperville jobs are leaving. In a state that needs jobs, people and the tax revenues they generate, this is not progress.

As for ADM, the agricultural giant is moving its headquarters from Decatur, and it's believed to be leaning toward Chicago as its first choice. But other states are courting ADM with lucrative offers. ADM has pressed for legislation providing tax credits worth $1.2 million a year for 20 years to choose Chicago, but it has indicated it needs a decision by the end of the year.

Madigan has dismissed that timetable, choosing instead to engage in a game of chicken with ADM. Maybe ADM will choose Chicago anyway, but maybe, like Office Depot, it will go elsewhere

Madigan is certainly correct that the business of offering tax incentives to major corporations is distasteful. He calls it another form of "pay to play."

But Madigan's Democratic colleague, Senate President John Cullerton, laments that "you have to play."

And whose fault is that?

Nothing happens in Illinois without Madigan's assent, including the creation of a hostile business climate that discourages job creators from opening, relocating or expanding here. Because of that, the people of Illinois suffer from a lack of opportunity while the state of Illinois faces unprecedented fiscal chaos.

There is a reason the state's unemployment rate is in excess of 9 percent, well above the national average, and it's that Illinois' elected officials collectively have failed in their responsibility to make this state a place where job creators want to be.

Madigan has called for "hearings on developing criteria for how future incentives should be awarded — a new process that values the jobs preserved or created instead of the tax breaks granted."

Fine. The problem is that Gov. Pat Quinn and legislators have had many previous opportunities to improve the climate for all job creators, not just major corporations, and consistently opted for politicized solutions that have had little positive effect.

Maybe this time, it'll be different. Hope, after all, springs eternal, even in Illinois.

Sections (2):Editorials, Opinion

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Sid Saltfork wrote on December 17, 2013 at 10:12 am

Welcome to the United Corporate States of America.  Maybe, China will offer ADM a tax break to move there?  Within the next five years, Office Depot/Office Max will have corporate offices in Havana (Cuba, not Illinois).  The states cannot keep competing with each other over tax breaks to corporations.  The states end up shorting their state's education, infrastructure, services, and employees when they lick the corporate boots.  It does result in "campaign donations" (bribes), and ignorant votes for the politicians.  The cost of the tax breaks continue to rise.  How long can Texas, or Florida continue shorting their citizens for corporations to move in with some jobs, but paying no taxes? 

How long can Illinois keep favoring corporations over it's citizens?  Improving the "climate for job creators" means making the citizens lives worse.  No help for the worker injured on the job.  Higher taxes for the citizens since the employers have a tax break.  Less money for education in the local downstate schools.  Less road repair even though the corporations are hauling on the roads.  More working poor, and more poor.  All of this for a handful of jobs.  The fertilizer plant in Tuscola will hire 150 full time workers in exchange for at least a $34 million tax break.  When that tax break expires; the company will threaten to move to Iowa if another Illinois tax break is not offerred.  It is a losing game.