Trillions of Corporate Welfare In The U.S. Budget

by Stephen Moore | Illinois Conservative Examiner

If Republicans are going to get truly serious about cutting government spending, they are going to have to snip the umbilical cord from the Treasury to corporate America.  You can’t reform welfare programs for the poor until you’ve gotten Daddy Warbucks off the dole. Voters will insist on that — as well they should.

Federal budgetSo why hasn’t it happened? Why hasn’t the GOP pledged to end corporate welfare as we know it?

Part of the explanation is that too many have gotten confused about the difference between free-market capitalism and crony capitalism.

And part of the problem is corporate welfare that is so well hidden from public view in the budget that no one has really measured how big this mountain of giveaway cash to the Fortune 500 really is. Finding out is like trying to break into the CIA.

Until now. Open the Books, an Illinois-based watchdog group, has been scrupulously monitoring all federal grants, loans, direct payments and insurance subsidies flowing to individuals and companies.

East Dundee candidates differ on Wal-Mart departure

By James Fuller | Daily Herald

Incumbent East Dundee village board candidates Allen Skillicorn and Jeff Lynam believe it’s long past time to roll back efforts to prevent Wal-Mart from leaving time. But at least one challenger, a face from the village’s recent political past, believes continuing the legal battle is the best first line of defense against a major loss of village tax revenue.

The Wal-Mart at 620 Dundee Ave. is the largest single generator of sales tax revenue in the village. It pours a little less than $800,000 a year into village coffers.

The big-box retailer announced it would jump the border and set up shop just about three miles away in Carpentersville as soon as its East Dundee lease expires in a little less than two years.

Village officials under Former Mayor Jerry Bartels direction went to court to block the company from leaving in belief that it is illegal for Wal-Mart to bolt to a shopping center that’s less than 10 miles away from a competing center when the tenant, Wal-Mart, will receive tax increment finance district assistance — property taxes above a certain point diverted from local governments and into redevelopment — to relocate.

Former Mayor Jerry Bartels is running for the village board with a promise of continuing that court battle despite the legal costs.

But incumbents Allen Skillicorn and Jeff Lynam said it’s time to think about how to replace Wal-Mart rather than keep it.

Skillicorn said the ongoing legal battle makes the village look weak. He’s also upset about the $100,000 of wasted  legal fees spent so far.

“I think that’s quite egregious,” Skillicorn said. “The fact is the law as it’s written has a gaping loophole. All Wal-Mart has to do is say this building doesn’t make enough money for us, and then they can leave. Right now it looks like we lost Dominick’s, lost Wal-Mart, and the best the village can do is sue Wal-Mart. That’s kind of silly. The question is how are we going to approach new businesses to come in, or are we going to sue people who want to leave?”

Lynam went so far as to say Wal-Mart leaving is “a good thing for the town.” He, too, believes times spent trying to save the village’s marriage with Wal-Mart is time that could be better spent wooing a new retail relationship.

Taxing bodies powerless to stop Schaumburg TIF, property tax increases

by Brian Costin | Illinois Policy Institute

Village officials in Schaumburg are pushing for $512 million in new property taxes via a Tax Increment Financing, or TIF, district. The taxes would be used to create an entertainment district north of Woodfield Mall.

But it’s not just people who pay property taxes in Schaumburg who would foot the bill. TIF districts cause property taxes to rise for all other overlapping taxing districts such as Cook County, Township High School District 211, and school districts 15 and 54. This means Schaumburg’s proposed TIF district will push up property taxes in neighboring communities such as Elk Grove Village, Hoffman Estates and Palatine. And to a lesser extent it would push up property taxes all over Cook County.

Taxing bodies are expressing worry that they will be blamed for increasing property taxes on local residents.

“But as Dave Torres, associated superintendent for business in Palatine-Schaumburg High School District 211 says, they are also just one more way the local tax burden is shifted more onto homeowners.”

IL gives suburban company $2.4 million to move 15 miles to Chicago

First posted at CapitolFax

* Power Construction is moving from Schaumburg to Chicago (15 miles, according to Google) and is getting $2.4 million in state assistance over ten years. That naturally prompted questions

Dan Seals, the former congressional candidate now serving as assistant director of the Ill. Department of Commerce and Economic Opportunity, was asked how he justifies giving a tax break to an Illinois company to move a short distance from suburb to city.

“We didn’t give a company a tax credit to move a few miles. What we did is saw a company that we thought was a good company that was looking to leave the state entirely that was receiving several million dollars to come to another state. We wanted to compete. We thought it was a good company to retain. And that’s what we did. And we won,” Seals said.

“You only get [the state aid] if you create the jobs. If you don’t create the jobs, you don’t get `em. And they’re based on the tax revenue that comes off the job. So, the state comes out ahead.”

Chicago gives Whole Foods $10M in TIF money

by Brian Costin | Illinois Policy Institute

In a free enterprise system, businesses grow organically by providing customers with products of value, and in return customers reward those businesses with their hard-earned money.

Unfortunately, in Illinois the free enterprise system has been corrupted by bad government policies.

Because of Illinois’ high taxes, regulations and anti-free-market policies, many businesses now resort to playing the game and seeking out cronyism packages to beat their competitors and survive.

Chicago Mayor Rahm Emanuel recently announced that organic-friendly Whole Foods Market will be getting an artificial taxpayer subsidy of $10 million in Tax Increment Financing, or TIF, district funds to build a new store in Englewood.

Unfortunately, this scenario plays out hundreds of times over each year in Chicago. Many of Whole Foods’ competitors, such as Jewel-Osco, Target, Walgreens and Mariano’s, also seek – and profit from – cronyism giveaways through TIF districts, which are special economic zones that gives taxpayer money to developers. This creates an unfair playing field for local businesses – especially smaller businesses. These smaller businesses are often left feeling the burdens of higher taxes and onerous regulations when their bigger, politically connected competitors win multi-million-dollar subsidies.

I don’t primarily blame companies for playing the cronyism game, especially when all of their local competitors are receiving subsidies. It’s the rigged system that’s created by politicians that’s to blame.

Just how costly is the TIF district problem? Chicago taxpayers paid out more than $457 million to TIF districts in 2012 alone. Most of the money will go to economic development projects similar to the Whole Foods deal. Statewide, more than $1 billion in property taxes is collected and spent via TIF districts.

Wisconsin vs. Illinois; which state has a better economy?

ILLINOIS/WISCONSIN (WITI) — Wisconsin Gov. Scott Walker and Illinois Gov. Pat Quinn have taken opposite paths toward improving the economy. So who’s approach is working better?

2011 was a tough year for Illinois and Wisconsin. Both faced big deficits — Wisconsin at $3.6 billion and Illinois at $13 billion.

It was a problem Gov. Walker and Gov. Quinn responded to in opposite ways. Wisconsin cut the budget and collective bargaining, while Illinois raised taxes by 67%.

Business leaders across the region watched closely.

Tim Roberts is the CEO of Catalyst Exhibits, a leading maker of exhibition displays like the ones seen at convention halls. At the time, he was thinking about a change of scenery for his company, but says Illinois’ tax hike made his decision easy.

“When the 67% increase happened. Boom. Done,” Roberts said.

Where did $454 Million In Property Taxes Go?

By Tom Tresser -TIF Illumination Project

Did you know that someone took $454 million in Chicago property taxes from us in 2011?

That “someone” was Chicago’s 163 Tax Increment Financing (TIF) districts spread across the city.

A TIF district is a special branch of the city government that is created to spur economic development. The district captures property taxes to give them to private developers for projects that are deemed public benefits. TIF money is also used by the city to make public improvements, such as streetscapes, school construction and other public building work. TIF money can only be used for physical projects, not for hiring teachers, policemen, after-school counselors, park district coaches, librarians or doctors.

TIFs are supposed to create development in so called “blighted” communities.