In recent years, the state of Illinois has been generous when offering tax incentives to either recruit new companies to the state or, more often, to keep companies in the state.
The state offered incentives to lure Boeing’s world headquarters to Chicago, and also to Sears Holding Co. and Tate & Lyle to keep companies and their jobs within the state.
Archer Daniels Midland Co. has asked the state for $24 million in tax incentives as it reportedly considers Chicago for a new world headquarters and customer and technology centers. The new headquarters will move about 100 jobs from the Decatur plant to the new location, while the technology center is expected to create about 100 jobs.
We have few problems with ADM’s request or the state granting it. The state has a precedent of offering such incentives, and ultimately, Illinois will be better off if ADM establishes a world headquarters in Chicago.
We don’t think a lot of Gov. Pat Quinn’s threat to veto any ADM incentives until the pension reform issue is solved. The two issues have little to do with each other, plus it’s pretty clear that the General Assembly is not swayed by Quinn’s threats.
The biggest problem with these economic development efforts is that they are reactive.
The economic development efforts would be better served if they were proactive, and the Decatur community would be a great place to start. The state, working with local officials, need to create a tax incentive package that will attract new businesses and jobs to the area.
We realize that state and local governments already offer economic development incentives. But we’re suggesting the types of incentives that will be noticed.
One could argue that Decatur deserves a break. The area has the highest unemployment rate in the state. The state rewarded incentives to Tate & Lyle to move jobs to a Chicago suburb, and it’s possible the same thing may happen with ADM.
But a better argument for tax incentives is that Decatur has a unique opportunity to grow new businesses and create jobs.
The new intermodal transportation facility, created by ADM, gives Decatur the opportunity to be in the middle of a growing transportation business. With Decatur’s access to rail and highway, this “inland port” could become a hub for companies that are involved in moving goods from one place to the other. It’s also possible that manufacturing companies could locate here because of the ease of moving materials in and finished products out.
In addition, ADM has pledged $250,000 a year for three years to aid public-private economic development partnerships and the development of a mayoral fellowship.
We’re not endorsing a handout. In fact, we believe the inland port and renewed economic development efforts will eventually bring jobs to the area.
But to expedite that process, the state could offer a special set of tax incentives that would entice businesses to look at the Decatur area. Ideally, these incentives could be put in place beforehand, so economic development efforts would not be stymied by a laborious General Assembly approval.
It’s a new way of doing business. Traditionally, businesses have been recruited to the state and then a tax incentive package has been considered. That process can be long, and neighboring states appear to react much more quickly and favorably.
Illinois has the second highest unemployment rate in the nation. It’s time to take a new approach to recruiting businesses and jobs.
[Decatur] Herald & Review