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The answer is definitively indefinitive: We don't know.
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WHY ARE WE DOING THIS? Franks says if Illinois isn't getting jobs,
companies shouldn't get tax breaks. |
"I have not seen anything that, verifiably, show these things work,"
said state Rep. Jack Franks, D-Woodstock, in charge of one of two
Statehouse committees investigating the incentives.
But Illinois' economic development office insists its numbers show
tax incentives do indeed work and produce jobs.
The numbers from the Illinois Department of Commerce and Economic
Opportunity claim tax incentives helped create 4,671 jobs and bring
in business investments worth nearly $3.7 billion in 2012.
Franks isn't buying it.
"DCEO (argues) somehow there is a 4 /12-time return on investment,"
Franks said. "But two weeks ago they argued it was an eight-time
return on investment."
Franks said it's not just that numbers change, but even the state's
success stories aren't all that successful.
"Even though DCEO has given 770 economic incentives contracts, less
than 300 of them have ever been fulfilled," Franks said. "And very
few go to the vast majority of our businesses. Ninety seven percent of our
businesses are 20 employees or less, and less than 10 percent of those companies
have (gotten an incentive)."
Categories of tax breaks vary, from manufacturers who buy new
machines to retail stores that collect sales taxes to big companies
that want special treatment to move to Chicago. If they don't work
for most businesses in Illinois, then who do they work for?
Ted Dabrowksi, vice president of policy for the Illinois Policy
Institute, said the select few companies with enough clout to get a
sweetheart deal are beneficiaries.
"If a company is receiving hundreds of millions of dollars in
benefits, sure it's working for them," Dabrowski said. "But we have
to ask the question: ‘Who is paying for that?'"
[to top of second column] |
The Illinois Legislature's Commission on Government Forecasting and
Accountability said taxpayers ultimately foot the bill.
"With over $1.15 billion in business-related tax expenditures
currently offered, the cost of these job-enticing dollars are
significant," a COGFA report on tax incentives states. "The
difficult question becomes, are these tax incentives really worth the cost?"
Franks has doubts.
"The only reason we should be having these incentives for businesses
is to create jobs," Franks said.
Illinois Gov. Pat Quinn's administration insists the state is
creating jobs.
"We are a net importer of jobs," DCEO director Adam Pollet told
lawmakers Wednesday. "We gained 1,400 jobs from business relocation
in 2012."
But Illinois' unemployment rate, at 8.2 percent, is nearly two
points higher than our neighbors and the rest of the nation.
___
Contact Benjamin Yount at
Ben@IllinoisWatchdog.org and find him
on Twitter:
@BenYount.
[This
article courtesy of
Illinois Watchdog.]
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