Cronyism runs deep in Illinois

Imagine an Illinois economy so vibrant that companies felt they had to be in Illinois to reach their fullest potential. Imagine a tax environment so competitive that companies across the country battled to get a piece of Illinois real estate. Keep imagining, because this certainly isn’t a reality. The fact is, Illinois ranks 48th in economic...

Imagine an Illinois economy so vibrant that companies felt they had to be in Illinois to reach their fullest potential. Imagine a tax environment so competitive that companies across the country battled to get a piece of Illinois real estate. Keep imagining, because this certainly isn’t a reality.

The fact is, Illinois ranks 48th in economic outlook and performance, 48th in net domestic migrationand 47th in job growth.

Lawmakers try to make up for Illinois’ shortfalls by steering resources to businesses they think will provide the greatest benefit to the state. State and local government in Illinois pretend they can create a vibrant private sector in the state. They do so by taking money from thousands of entrepreneurs and businesses, cooking up generous tax incentive packages and grants and then giving these handouts to businesses of their choosing.

More incentives and grants for a few companies, however, means higher taxes for all the rest. And higher taxes mean fewer businesses wanting to operate in Illinois. Lawmakers use special tax privileges and development programs to handle this by providing, ironically, even higher incentives.

It’s called cronyism. And it’s destroying economic growth and severely hindering job creation in Illinois by letting government pick winners and losers.

Here are a few examples included in The 2012 Illinois Piglet Book and some of our other recent work:

From the Department of Commerce and Economic Opportunity:

• $5.5 million to Boeing Co. for relocating to Chicago.

• $249,000 to Rolling Frito-Lay for the costs associated with training 920 existing employees.

• $200,000 to AT&T Inc. for the costs associated with training 280 new and 2,450 existing employees.

• $194,716 to Navistar International for the costs associated with training 150 new and 300 existing employees.

• $18,295 to Pepsi MidAmerica for training 60 new and 340 existing employees in the Marion facility.

• $29,737 to Armstrong World Industries Inc. to train existing employees.

From Tax Increment Financing, or TIF, districts:

• $21.5 million to MillerCoors for relocation costs.

• $1.25 million to Quaker Oats Company for development in Chicago. This is just part of the $13.1 million that Quaker Oats has received in TIF funds since 2000.

• $47,268 to Dr. Richard Altieri, a chiropractor in Schaumburg, for relocation costs.

• $40,000 to Jewelry and Coin Mart in Schaumburg for relocation costs.

• $35,000 to Bill Kay Nissan in Downers Grove for property tax reimbursement.

• $20,000 to Accurate Personnel in Schaumburg for relocation costs. The company ranked as one of the fastest growing staffing firms in 2010.

• $20,000 to Hair Clip Inc., a beauty salon in Schaumburg, for retail improvements.

• $10,000 to Peterson’s Ice Cream in Elmhurst for retail improvements.

• $10,000 to Edible Arrangements in Elmhurst for retail improvements. The company ranked first in its category in Entrepreneur Magazine’s Franchise 500 in 2007, 2008 and 2009.

• $27,145 to Gold Key Auto Sales, a used car dealership in Silvis, for redevelopment.

• $14,132 to Sluggers Pizza in Silvis for redevelopment.

Other examples from our recent work:

• $340 million to build a people-mover system at O’Hare International Airport. With a track length of nearly 3.1 miles, taxpayers are looking at footing a cost of almost $110 million per mile.

• $77 million to the Chicago Mercantile Exchange group as a part of an annual tax relief package.

• $15 million to Sears Holding Corp. as a part of an annual tax relief package.

• $10 million to Motorola as a part of an annual tax relief package

• $8 million to the Chicago Board of Options Exchange as a part of an annual tax relief package.

• $3.5 million to Champion Laboratories Inc. as a part of an annual tax relief package