Greg Hinz: Tax breaks aren’t always bad policy. But sometimes, they … – Crain’s Chicago Business

If it sounds like I’m calling for a reasonable middle ground in the corporate tax and incentive wars, I am. Local politicians, with rare exceptions, go to the extremes on such matters. Holding the middle ground is tough—but the correct strategy.

You don’t have to go far to find pols and other interests at those extremes. Take, for instance, mayoral hopeful Brandon Johnson

Johnson wants to invest in human needs and long-neglected neighborhoods—who doesn’t?—but would come up with the money by, in essence, permanently raising the Chicago River bridges. Included: hiking hotel taxes in a town with the highest hotel taxes in the land; taxing well-off Metra commuters for the privilege of working downtown at a time when the Loop often is empty because people are working from home; imposing a “use fee” on anyone who shops in a “high-end” area, like vacancy-plagued North Michigan Avenue; and imposing a tax on jet fuel at the city’s airports that appears to conflict with federal law. But, hey, what the Chicago Teachers Union wants, the CTU gets.

At the opposite extreme are the Chicago Bears.

They’re tired of Soldier Field—I can relate to that—and want to build a nifty new football palace in Arlington Heights, along with an adjoining hotel/retail/entertainment complex. But to do all of that, they want a big fat subsidy, as in a new bill they’ve floated in Springfield that would allow them to pay less than normal property taxes. If the tin-cup McCaskeys want to cut taxpayers in for a share of increasing team profits and value, great. But they’re neither going to do that, nor move the franchise to Dubuque. So they can just build it on their own nickel via borrowing or other capital-raising moves, just like the Ricketts clan did at Wrigley Field.

In between the “shake them down” and “give it away” approaches are some economic development deals that truly would help us, by pulling in jobs and spinning off tax revenue that would not otherwise be here.

The top example is the ongoing campaign by Gov. J.B. Pritzker to bulk up the state’s nascent electric vehicle manufacturing business, and particularly to convince Stellantis to convert its Belvidere plant to EV production rather than shipping out the work to Michigan. Pritzker is going to have to put real money on the table because other competing states are. The type of property tax breaks the Bears want might be helpful, too, though not for the Bears. I wish him luck because the loss (or gain) of thousands of well-paying factory jobs that can support a middle-class family is really at stake in this one.

Deciding for or against a subsidy can be a very tough call. The late Gov. Jim Thompson “saved” the headquarters of Sears’ merchandise group and its thousands of jobs by, in part, creating a tax-increment financing district in Hoffman Estates. But the company was broken and directionless, and eventually fell. On the other hand, while Richard M. Daley’s decision to give tax breaks to Boeing to move here caught lots of flak—the company last year decamped to the Washington, D.C., area—it came at a time when Chicago was hemorrhaging corporate headquarters and badly needed a big win. Sound familiar?

My point is that each of these deals, each of these taxing situations, is different. They needed to be carefully weighed, one by one. Voters ought to look with a jaundiced eye on any pol who fails to make such distinctions.

Ino Saves New

via rk2’s favorite articles on Inoreader

January 30, 2023 at 09:21AM

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