Illinois spending $230 million for companies to stay in state

Posted on June 10, 2011


It is bad enough that the formerly great state of Illinois is paying millions of dollars to keep big business from moving to other states but the money being used to pay these bribes is coming diectly from the Il taxpayers. The Gov of Il just passed many big tax fat increases. SHAW

By Ramona Roy…..Illinois is planning to spend millions of dollars to keep companies in the state after news surfaced that a big-name local company is reportedly leaving for California.

The Chicagoist published a May 11 email from Pabst Brewing Co. CEO John Cochran, which said the beer company’s local office would relocate from Woodridge, Ill. to Los Angeles this summer. Representatives from Pabst declined to comment for this article, although representatives from the Village of Woodridge confirmed the news May 13.

The news adds Pabst to a growing list of Illinois companies looking to move elsewhere, after Gov. Pat Quinn raised corporate income tax rates from 4.8 percent to 7 percent in January.

But just last week, the Chicago Tribune reported the state had pledged to spend more than $230 million in incentive programs for businesses to remain in the state.

The pledged packages, which is comprised of grants, trading funds and tax credits for 27 companies, will hopefully motivate them to remain in the state, despite the economy and harsh business climate.

Last year, the state pledged $236 million to 53 companies for the whole year. This year’s $230 million tally only totals agreements through early May, putting the state well above the spending mark from last year.

The package counteracts Quinn’s recent tax increases, including the 45 percent corporate tax increase passed in January, in order to solve the state’s $15 million budget deficit.

Illinois Republican Party spokesman Jon Blessing blames Quinn’s tax increases on why businesses like Pabst move.

“I think that Illinois is not a friendly place to do business by a number of measurements,” Blessing said. “With the near 50 percent increases, you’ve taken a place that’s already hard and made it crippling.”

Blessing organized an event at Villain’s Bar & Grill, 649 S. Clark Ave. in Chicago, on May 13 for the Illinois Republican Party as a demonstration of solidarity for the brewery.

“It was more about showing our support for Pabst, showing our support for Illinois, showing our support for the workers of that company and showing them we want them to stay,” he said.

Pabst was founded in Milwaukee, but its headquarters moved to Woodridge from Texas in 2006. The company, however, has been in Chicago since 1854 when Philip Best, the son of Pabst’s founder, opened a sales office there. It also won the “America’s Best” award in the World’s Columbian Exposition in Chicago in 1893, and the company subsequently renamed their product Pabst Blue Ribbon.

Blessing said the choice of California, another state with a floundering economy, was highly revealing of the grave business conditions in Illinois.

“I think it says a lot about the business climate in Illinois to move there,” Blessing said. “You’d think about them crossing the border to Wisconsin or Indiana, not California. I think that speaks volumes.”

For their part, Wisconsin and Indiana are trying to lure businesses to their borders. Indiana has not only reduced their corporate tax rate, but the state is also launching ad campaigns to get Illinois businesses to move.

Sears Holding Corp., for example, is currently headquartered in Hoffman Estates, Ill., and is highly coveted by several states.

As a result, Illinois is working to keep big companies in the state. The state is reportedly giving Motorola Mobility more than $117 million to stay in Libertyville as part of the $230 million package. Mitsubishi Motors Corp. is reportedly receiving $30 million to keep its production plant in Normal, and Continental Tire received $22 million to stay in Mount Vernon.

The money is intended to motivate business to stay in the state. As part of the deal, the companies must agree to certain conditions, such as make an investment in the state.

The other companies part of the $230 million deal are not disclosed.