Quick—who do you think is in a better position to pay its bills: agricultural giant Archer Daniels Midland, or the State of Illinois?
That should be easy. In 2012, ADM reported a profit of $1.22 billion on $89 billion in revenues.
Currently, the state of Illinois is drowning in $8.8 billion in overdue bills.
Nevertheless, that hasn't stopped the Decatur-based company from putting a gun to the state’s head and demanding free money.
ADM has said it wants to move its headquarters from its longtime downstate location to a more “global” city, particularly Chicago.
But it says it can't do that without the state’s help, particularly in the form of tax breaks. That’s why it’s asking for millions of dollars in free money to not bolt the state.
And it’s demanding it right now, saying if it doesn't get approval for the proposed tax breaks, it will simply have to go somewhere else.
Of course, for Illinois lawmakers, that simply won't stand. That’s why legislators are expected to consider a bill today that includes $24 million in incentives over 20 years for ADM if it promises to keep some jobs in Illinois.
Forget that the company has been in Illinois for more than 40 years, using the state’s infrastructure to build a global business. Or that it has nearly $6 billion in cash on hand, waiting to be put to use. Or that at least 43 percent of ADM’s profits already come from products subsidized by taxpayers.
In fact, forget even the ‘promise’ part:
Sen. David Luechtefeld, of downstate Okawville, asked during a Senate committee hearing whether ADM would guarantee it would keep its headquarters in the state if the measure is approved.
"I don't know about the guarantee part," said Greg Webb, ADM's vice president of government relations. He later added: "I'm going to tell you that we have a preference for Illinois."
ADM has said it plans to retain a workforce of 4,400 in Decatur, but the measure doesn't include language that requires the company to keep that promise.
Further, the ADM deal has been rolled into a larger piece of legislation that also includes incentives for two other companies—chemical distributor Univar Inc, and the newly-merged Officemax/Office Depot—to help them, too, decide where to locate their headquarters. Together, these incentives tally more than $88 million.
Of course, the state doesn't have the money to give to these wildly profitable companies outright. That’s why legislators are floating the idea of raising taxes on satellite television subscribers to help fund the current incentives, which would ultimately be paid for by consumers.
All in all, as many as 10 different companies currently have special tax break requests pending before the Illinois Legislature.
In 2011, Quinn signed $100 million in tax breaks and incentives for Sears Holding Corp. and CME Group Inc., which operates the Chicago Mercantile Exchange and Chicago Board of Trade.
Proponents of such incentives often point to the promise of creating or keeping jobs when doling out such incentives. The problem is, such expectations often fail to materialize, especially when guarantees aren't built into the deal.
So, just to sum up: companies generating billions of dollars a year in sales and/or profits are extorting a bankrupt state to help pay for the costs of routine business decisions, such as where to locate their corporate headquarters.
To do so, they dangle a vague promise of some jobs. And state lawmakers, taking their promises at face value, give away money to be paid for by everyday consumers.
I guess you could say one thing’s for sure about ADM and other companies like it:
They sure do know a patsy when they see one.