In a move that could endanger efforts to keep Archer Daniels Midland from moving its top executives and support staff out of Illinois, House Speaker Michael Madigan last week said he wants to review how the state decides which companies get state tax breaks.
Rather than taking up proposals for tax incentives on a company-by-company basis, the powerful Democratic leader from Chicago suggested the creation of some sort of scoring system designed to ensure business owners looking for taxpayer assistance actually deserve it.
Madigan’s statement on the issue spawned a number of theories about what he is trying to accomplish. Perhaps he was trying to undermine Gov. Pat Quinn, who could have used a positive decision from ADM to his advantage in the upcoming race for governor.
Or, possibly, Madigan was sending a message to the corporate world that Illinois lawmakers are not going to just roll over whenever some company threatens to leave the Land of Lincoln.
I prefer to think that Madigan was just trying to avoid the bad optics first floated in a story I wrote back in late September.
Here’s the first paragraph of the story:
“At the same time Illinois lawmakers are expected to debate a plan to strip retirement benefits from teachers, prison guards and university employees, they also may take up a proposal to deliver tax breaks to one of the state’s biggest corporations.”
Flash forward from September to December and that was exactly the scenario facing lawmakers in the House as they voted to approve a plan to reduce pension benefits for tens of thousands of workers and retirees.
What would it have said had they then turned around that same day and gave away millions of dollars in tax breaks to a successful company like ADM so its top brass could be closer to a large international airport?
“I question our priorities when corporate handouts are demanded by companies that don’t pay their fair share while middle-class families and taxpayers face an increasing number of burdens,” the suddenly populist speaker wrote.
Madigan is leader of the House because he protects his rank-and-file members from bad political decisions. This is one of those situations where most of them are privately thanking him.
Bruce Rauner faces a similar case of bad optics. The ultra wealthy hedge fund manager who is running for the Republican nomination for governor wants to freeze state worker pensions at their current levels and switch everyone to a 401(k)-style retirement savings program.
This is ironic because Rauner became rich, in part, by investing and managing public pension funds, including the Illinois Teachers Retirement System.
While school teachers, prison guards, university employees and child welfare workers are staring at a revamped pension plan that will bite into their future earning power, Rauner is enjoying the fruits of his investments.
He reported earning over $100 million in the past three years alone. Reports indicate he has eight homes, including ranches out West, penthouses in New York and Chicago and a beach house in Florida.
Rauner’s handlers didn’t make him available to discuss the disconnect between Rauner’s riches and his position on ending pension plans for public servants.
But, Rauner’s campaign spokesman said Rauner’s investment firm GTCR delivered ample returns for the pension systems at a time when lawmakers and former governors were not sufficiently funding them.
“So on one side you had the politicians creating the problem and on the other you had GTCR and Bruce creating tremendous returns,” spokesman Mike Schrimpf said.