 Yet another packaging manufacturer is leaving Illinois for Wisconsin. Vonco
Products LLC announced plans Oct. 27 to move its entire operation from Lake
Villa, Ill., to Salem,Wis., according to the Milwaukee Business Journal.
Salem is in Kenosha County, only 10 miles away from Lake Villa. It’s a 20-minute
car ride, depending on traffic.
Vonco aims to have the transfer complete by June 2017. The new plant will be
86,500 square feet and employ 86 people, including those from the Lake Villa
facility. The Kenosha Area Business Alliance, or KABA, offered to build the new
plant at a cost $6.8 million. The multi-million dollar plant is going to be
constructed in the 80-acre Salem Business Park Kaba is developing in the hopes
of attracting businesses and especially manufacturers, according to Crain’s
Chicago Business.
Vonco also had help from the Wisconsin Economic Development Corporation, or
WEDC, which offered Vonco $500,000 in tax credits, contingent upon hitting job
creation goals, the Milwaukee Business Journal reports. Combined with other tax
credits and loans, the total amount state and local officials in Wisconsin
offered to Vonco Products LLC was $1 million, according to Crain’s Chicago
Business.
“The deal just was extremely good,” Vonco President Keith Smith said in a
statement.
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 This “extremely good deal” was not just the product of local tax
giveaways, but also because of Wisconsin’s manufacturing and
agriculture tax credit, along with significant tax and regulatory
differences between the two states. Wisconsin manufacturers pay no
state income taxes because of Wisconsin’s income-tax credit for
farms and factories, which eliminates their state income tax
liability. This creates a stark tax difference for manufacturers
choosing between Illinois and Wisconsin, just like it creates a
difference for Illinoisans who are attracted to the zero-income-tax
status of states like Texas and Florida. Though Wisconsin’s tax
carve-out is not fair tax policy (it benefits manufacturers by
making other sectors pay more), it shows the importance of tax
differences for businesses and investors.
However, Illinois still has significant problems that make it an
unattractive state for manufacturing. High property taxes, an
expensive workers’ compensation system, costly layers of government
and the lack of a statewide Right-to-Work law make Illinois
uncompetitive for manufacturing and business.
The need for pro-growth and fair reforms is necessary to make
Illinois viable for manufacturing, and it can be done without
mimicking Wisconsin. Michigan passed Right-to-Work and tax
reductions, and has over 600,000 manufacturing jobs, adding 170,000
jobs since the Great Recession and the restructuring of the auto
industry. In Indiana, which also has low taxes and Right-to-Work,
manufacturing workers are earning more than Illinois manufacturing
workers when adjusted for taxes and cost of living.
Illinois has serious problems that call for real solutions. By
sticking to fair reforms that attract, not bribe, manufacturers, the
Land of Lincoln can rebuild its industrial sector and provide
well-paying jobs for thousands.
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