ADM relocates to Chicago – without state tax incentives
Archer Daniels Midland, an Illinois-based agribusiness giant, announced today that it will move the company’s global headquarters from Decatur, Ill., to Chicago, despite a tax incentive bill worth $30 million to ADM being stalled in the Illinois General Assembly. The decision keeps 60 to 75 executive-level jobs in Illinois, and comes a week after Office...
Archer Daniels Midland, an Illinois-based agribusiness giant, announced today that it will move the company’s global headquarters from Decatur, Ill., to Chicago, despite a tax incentive bill worth $30 million to ADM being stalled in the Illinois General Assembly. The decision keeps 60 to 75 executive-level jobs in Illinois, and comes a week after Office Depot left Illinois, a move that cost the state 1,600 jobs. Office Depot walked away from a possible $53 million in Illinois tax credits to make its headquarters in Florida.
These deals are business as usual in Springfield’s pay-to-play culture, but they do little to promote true growth and job creation. The policy of picking winners and losers has failed in Illinois. The facts speak for themselves:
- Illinois has the fourth-worst unemployment rate nationally
- Joblessness is nearly 2 percentage points above the national average
- Illinois’ GDP growth ranks only 41st nationally since 2003
- Illinois’ GDP growth since 2008 lags behind neighbors Indiana, Iowa, Kentucky and Wisconsin
For decades, Illinois has been handing out goodies to corporations in exchange for promises to stay or invest in Illinois. To pay for corporate handouts, the state levies the fourth-highest corporate tax rates in the industrialized world, and imposes higher rates on entrepreneurs and small businesses. In 2011, the state raised individual tax rates on small business owners by 67 percent and on corporations by 46 percent, only to dole out hundreds of millions in tax breaks to large corporations. The Chicago Mercantile Exchange Group takes $77 million in annual tax relief, while Sears and Motorola grab $15 and $10 million, respectively. Other recipients include Boeing, Frito-Lay and AT&T. These transfers slant the playing field against struggling small businesses, which have to reduce hiring plans and inventory due to increased tax rates.
The pay-to-play culture has become so pronounced that even House Speaker Michael Madigan, a steward of crony legislation, voiced support for the idea that regular payouts only set the stage for a cascade of corporate demands. Taking politicians out of the process of picking winners and losers is the right move in a state that has the third-highest number of public corruption convictions, and a culture of corruption that costs taxpayers $500 million per year. Illinoisans should take the Speaker at his word and demand the General Assembly take on serious reform.
Madigan should start by eliminating the Department of Commerce and Economic Opportunity, the group responsible for doling out corporate tax breaks. The General Assembly should level the playing field with lower taxes and regulatory burdens for businesses large and small. In that environment, Illinois will not only retain large corporations, but will also foster in-state growth and attract entrepreneurs and investors who will drive our future growth.