If Ohio wants to shower Sears Holding Corp. with $400 million to lure the retailer away from Hoffman Estates, I say, "Fine, do it." And let Ohio Gov. John Kasich (R) explain to his taxpayers why his state's bribe is four times greater than the $100 million that Illinois reportedly had offered.
But if I were a stockholder in Sears, I'd ask its board, have you lost your mind? Your stock, say some analysts, is underperforming; you're losing business to competitors, and last quarter's financials were disappointing. When you've got plenty of challenges just running the business, why are you even thinking about wasting precious time, money and energy moving? Think about the cost of everything — from printing new stationery and business cards to relocating or severing 6,000 employees, hiring new ones, transporting equipment and records, creating new business relationships and on and on.
Seems to me that your problem isn't so much where you are doing your job as how well you are doing it.
Of course, you're not the only one trying to extort money from taxpayers to stay. CME Group Inc., the giant derivatives marketplace whose Chicago roots, like Sears, go back more than a century, also wants taxpayer "assistance," even though it's already making a nice hunk of change. And Caterpillar Inc., the Peoria-based manufacturing giant, is shopping a new plant and its 1,000 jobs around the country to lure some serious coin from a willing state.
I can't blame them for wanting to flee Illinois, host of one of the nation's most unfriendly business climates, especially considering its recent corporate tax increase to 7 percent from 4.8 percent. It's especially apropos for CME, which pays an estimated 6 percent of all Illinois corporate income taxes. As a further inducement to leave, the Legislature unsuccessfully tried to agree to a package of tax breaks that would have, for example, halved CME's tax burden.
Honestly, if I were running a big business in Illinois while watching the clowns in Springfield driving the state into financial ruin, I'd also want to get out before the state's debt bubble bursts. This unfolding disaster isn't something that businesses can afford to watch from the sidelines. A good business climate requires more than a reasonable and fair tax structure; it also requires a sound infrastructure and a reasonable expectation that it will stay sound. Illinois can promise none of it.
Talk about shooting the wounded. Coming now, the companies' demands are as untimely as extorting a blood donation from an intensive-care patient. Yes, the state put itself in the financial intensive care unit and yes, the corporate threats of moving might finally spur the clueless Democratic state leadership to finally clean up their mess.
But the corporate demands are shameless. They come at the wrong time. The state can no more afford to pay this kind of extortion now than it is able to immediately clear up its multibillion-dollar debt to the public employee pension funds.
As much respect as these companies deserve for their contributions to the state in the form of jobs, taxes and good corporate citizenship, it takes a lot of brass and a startling disregard of the commonweal to make such demands now. It is one thing to clamor for a good business climate as the price for staying, but it's entirely another thing to demand special consideration when the state can't pay its bills to schools, hospitals and everyone else.
The line of companies whose demands for taxpayer largesse seems endless. Motorola Mobility Holdings copping $113.7 million in tax credits over the next decade, $1.25 million in training funds and a $3 million grant to retain 2,500 jobs. Chrysler in Belvidere. Mitsubishi Motors to come and stay in Bloomington-Normal for a mere $276.1 million.
Sears, you'll recall, originally squeezed a taxpayer-subsidized incentive package to move from the former Sears Tower in Chicago to Hoffman Estates. That deal is about to expire and Sears now wants more. If we give it to Sears, why, we can ask ourselves, won't it happen again? And again. And again.
We'd welcome these companies if they stayed and helped us see Illinois through these tough times. But for now, no deal. Even in return for big employment, tax and other benefits for Illinois in the future. We're bust, don't you see?
This column first appeared in the Chicago Tribune.