Madigan Signals Opposition to Corporate Tax Breaks

Speaker says it's “difficult” to support requests by companies seeking tax incentives

In the wake of a series of high-profile cases, Illinois House Speaker Michael Madigan says he finds it “difficult” to support requests by companies seeking tax incentives to stay or relocate in the state.

Recently, a number of companies, including Archer Daniels Midland, OfficeMax and Univar, have all sought help from the taxpayers of Illinois to make decisions about where to locate their corporate headquarters.

Two bills passed the Senate earlier this month, one giving ADM up to $30 million in tax breaks, the other offering $58 million for Univar and OfficeMax. However, the House was unable to address the issue following a historic vote on pension reform.

In 2011, Quinn signed $100 million in tax breaks and incentives for Sears Holding Corp. and CME Group Inc.

In a statement, Madigan said:

We must resist the temptation to cave to corporate officials’ demands every time they impose a deadline for payment in exchange for remaining in Illinois, and end the case-by-case system of introducing and debating legislation whenever a corporation is looking for free money from Illinois taxpayers.

As well, he seemed to draw a direct line between at least a portion of the state’s financial problems and the role of corporations in generating tax revenue:

The companies requesting these taxpayer-funded breaks currently pay little to no corporate income tax to the state, contributing little or nothing to help fund the very services from which they benefit significantly. Meanwhile, middle-class families continue struggling through a recession and job loss. … I question our priorities when corporate handouts are demanded by companies that don’t pay their fair share while middle-class families and taxpayers face an increasing number of burdens.

Madigan also called for a more comprehensive approach to such requests, including “thoroughly reviewing how we currently provide incentives to big corporations.”

Such a review has been long called for by a number of business leaders and politicians around the state and elsewhere.

For example, Ned Leiby, managing director with WTP Advisors in Chicago, has told Ward Room the state needs to adopt a more aggressive, integrated economic development approach similar to Chicago’s plan, known as World Business Chicago.

“You do not run an incentives department in a silo—it needs to be incorporated responsibly into the state’s budget and business plan” instead of taken on a case-by-case basis, Leiby says. “We are clearly seeing the increasing importance of economic incentives not only for Fortune 500 companies but growing middle market businesses. The issue is not going away.”

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