ADM’s tax break delayed
BY DAVE MCKINNEY Springfield Bureau Chief October 4, 2013 5:04PM
Gov. Pat Quinn
Updated: November 6, 2013 6:07AM
SPRINGFIELD-The legislative push for $24 million in state tax subsidies for a company that dubs itself the “Supermarket to the World” is turning into anything but a fast trip through the grocery store express lane.
Legislation sought by Decatur-based Archer Daniels Midland Co. in exchange for basing new global headquarters in Chicago stumbled anew after Gov. Pat Quinn Friday ruled out consideration of ADM’s plan until lawmakers pass pension reform.
Quinn followed Senate President John Cullerton (D-Chicago) and House Majority Leader Barbara Flynn Currie (D-Chicago) in raising serious concerns about the tax break the agribusiness giant wants from Springfield.
“I don’t think any corporation should be seeking special tax-break legislation when all of our corporations know our No. 1 way to help business is to get pension reform,” Quinn said. “We need ADM and all of our big businesses to band together, put pressure on the Legislature, the House and the Senate, Democrat and Republican, to get a vote on pension reform. That helps everybody.
“I think we need to have a moratorium on any special legislation for tax breaks on corporations. We have to focus on pension reform.”
ADM has asked Illinois legislators, who return to Springfield for their six-day fall session on Oct. 22, to approve the tax-incentive deal in exchange for a promise to relocate 100 corporate executives to Chicago and later open a 100-employee technology center at the new global complex, moves the company says will make it more profitable.
ADM has said it will keep 4,400 workers in Decatur if lawmakers agree to give it a state EDGE tax credit that would allow the company to reduce its state tax liabilities by $1.2 million annually for up to 20 years.
“We believe our relocation to a global hub will lead to a greater propensity for us to have success into the future,” ADM spokesman Greg Webb said. “And for a community like Decatur and the 52 other communities we’re in, with more than 100 facilities, we believe that will prompt or at least provide an environment for both our near-term and future success.”
The ADM deal is part of a broader corporate tax-break push in the Democratic-led House that includes state subsidies for pending relocations of Schaumburg-based Zurich American Insurance Co. to a spot elsewhere in the northwest suburb and Univar, a Washington-based chemical distributor that wants to move its headquarters to Downers Grove.
“These things become difficult for members to wrap their arms around in light of where we are now as a state,” said Rep. Michael Zalewski (D-Riverside), vice chairman of the House Revenue & Finance Committee, who is carrying the Univar legislation.
But the higher-profile ADM package, in particular, has emerged as a flashpoint.
Currie blasted the plan last week at a legislative hearing and accused ADM of “blackmailing the state” with its request, while Cullerton expressed concern that the company wasn’t doing enough to insulate Decatur, which has a nearly 15-percent unemployment rate, from the loss of company jobs.
Because ADM wants its deal to go through immediately, it will require supermajorities to pass both the House and Senate, meaning an extraordinarily heavy legislative lift complicated by Quinn’s threat to block the deal without getting pension reform first.
An “immediate effective date adds a level of uncertainty about the plan’s feasibility when it comes to vote counts,” Cullerton spokeswoman Rikeesha Phelon said.
The package represents a significant taxpayer-subsidized handout to a company with 2012 revenues of nearly $91 billion and a stock that has jumped in value the past year by more than 31 percent.
By contrast, Illinois has $100 billion in unfunded pension liabilities, a nearly $7 billion backlog of unpaid bills and a worst-in-the-nation bond rating.
State Rep. John Bradley (D-Marion), chairman of that House panel and lead architect of the ADM and Zurich bills, justified the approach as a way to protect jobs: “We want to be fiscally responsible. But at the same time, we need jobs, and we don’t want companies leaving the state.”
In an interview with the Chicago Sun-Times, House Minority Leader Jim Durkin (R-Western Springs) said hinted that Republican support might exist for the package but only if Chicago puts some financial skin in the game, something Mayor Rahm Emanuel’s administration has yet to specifically offer publicly.
“I think Chicago should be assisting,” Durkin said.
“When you have 9.2-percent unemployment, and you have once a week a different governor coming to Illinois and saying, ‘Come to our state. We can make it work for you and will provide the great incentives for you,’ we just can’t lose any more jobs,” Durkin said, referring to high-profile, company-poaching incursions from Wisconsin Gov. Scott Walker and Texas Gov. Rick Perry.