Illinois Begging Companies Not to Leave with Tax Credits

by Wesley Fox Governor Quinn recently announced a new $7 million “business investment package” that will keep U.S. Cellular’s headquarters in Illinois.  The package is part of the state’s Economic Development for a Growing Economy Tax Credit Program (EDGE).  The program provides tax credits to companies that promise to make capital investments within the state and create 25 new...

by Wesley Fox

Governor Quinn recently announced a new $7 million “business investment package” that will keep U.S. Cellular’s headquarters in Illinois.  The package is part of the state’s Economic Development for a Growing Economy Tax Credit Program (EDGE).  The program provides tax credits to companies that promise to make capital investments within the state and create 25 new jobs.

The investment package was offered in order to stop U.S. Cellular from relocating to another state, such as Oklahoma.  The deal requires U.S. Cellular to keep its headquarters in Illinois, retain nearly 1100 existing jobs within the state and create 25 new jobs.

There is something wrong when the Governor of a state must literally pay companies to stay that would otherwise leave for more business-friendly locations.  It is also problematic to offer tax breaks when the state faces severe budget problems.  The package has Illinois paying $284,000 per job created, which does not seem to be the most efficient use of the taxpayers’ money.

An alternative would be to adopt Common-Sense Reforms so companies like U.S. Cellular are not compelled to relocate to Oklahoma in the first place.