Tag Archives: bruce rauner

In Illinois as in Wisconsin, tax breaks to corporations have failed to create the promised jobs

Tax giveaways to corporations are a key component of the Republicans formula for job growth. But they’ve failed miserably in Wisconsin and now there’s evidence they’ve flopped in Illinois as well.

The Chicago Tribune analyzed (http://trib.in/1GnWjHk ) 783 deals the state has made through the Economic Development for a Growing Economy program and found that two-thirds of the companies that completed agreements didn’t maintain agreed-upon job levels.

State officials also can’t say how many jobs have been created by the program, known as EDGE, which Republican Gov. Bruce Rauner wisely put on hold in June.

Since 1999, Illinois has promised more than $1 billion in EDGE tax breaks, which officials say helps lure new firms, hang onto employers who might move elsewhere and encouraging businesses to add jobs. Companies have so far collected about $450.3 million — money that, if collected, would help pay for public services such as education and health care.

Rauner’s move came this summer as he and the Democrats who control the General Assembly disagreed over a new state budget, though new deals the state reached with Amazon and ConAgra Foods before June have only been recently announced.

The Republican governor reiterated last week that, even when the EDGE program is restarted, the state won’t provide tax breaks unless companies create new jobs. At least 78 companies that have signed EDGE deals since 2004 were not required to add jobs, and at least 51 of those were made by the administration of Rauner’s predecessor, Democrat Pat Quinn.

But Rauner defended the tax breaks promised to ConAgra as crucial to the company’s plans to move its headquarters from Omaha, Nebraska, to Chicago. Neither ConAgra nor state officials have disclosed the terms of that deal beyond the requirement that the company add 150 new jobs.

“Getting corporate headquarters for a Fortune 500 company like ConAgra is a big deal long term to the economic growth in Illinois,” Rauner told The Associated Press. “And they will be adding jobs. We would not give them edge credits unless they were adding jobs.”

Recent headlines illustrate that some EDGE recipients not only don’t add new jobs, but cut employees. Mitsubishi received a new EDGE deal in 2011 but now plans to close its plant in Normal, cutting almost 1,200 jobs. Two more EDGE recipients also recently announced layoff plans: 500 jobs at Motorola Mobility in Chicago and 700 at Kraft Foods in Northfield.

Jim Schultz is the director of the Department of Commerce and Economic Opportunity, which oversees EDGE. He called the terms of many of the existing deals “very distasteful.”

David Vaught, a former Quinn budget chief and commerce director, told the newspaper that Quinn wanted to try “anything that could get us a job in a recession.” Some companies openly threatened to leave the state during the recession unless they received tax breaks.

When Quinn announced the $29 million deal with Mitsubishi, he proclaimed, “Illinois is Mitsubishi country and always will be.” But the company, which has received $5.2 million in tax breaks, plans to close the plant in November and move production overseas. A small staff will stay on through May, which could allow the car maker to avoid EDGE provisions requiring repayment if the company closes its Illinois facility within five years of signing the deal.

“When you’re in an economic emergency compounded by decades of financial recklessness, you fight to keep businesses and jobs in Illinois,” Quinn said in a statement defending deals he made.

Rep. Jack Franks, a Marengo Democrat who’s a longtime critic of EDGE tax breaks, calls the program “deeply flawed.”

“We have no idea what we’re getting in return in for our investment, and we don’t even know if anything works,” he said.

Wisconsinites who blame Gov. Scott Walker for the failure of his Wisconsin Economic Development Corporation should consider the mounting evidence that such programs simply don’t work. In Wisconsin, they’ve been nothing but gifts for Republicans’ cronies. Perhaps in Illinois, Democratic officials were the ones who made out like bandits.

It’s time to end pointless tax breaks for large corporations and the wealthy. In 30-plus years, it has never trickled down. It’s only squirted up.

Tax breaks must target the middle-class people who generate economic activity. They must be used for funding education, infrastructure and social programs — all of which help people who actually need the help.

Illinois governor severely restricts medical uses of marijuana

Gov. Bruce Rauner’s administration issued a broad rejection Thursday of expanding the list of diseases that can be treated with medical marijuana in Illinois, refusing to add osteoarthritis, migraine, post-traumatic stress disorder and eight other health problems.

Separately, the governor vetoed a bill that would have added PTSD via a legislative route.

The moves were a stern rebuke of recommendations from an expert advisory board appointed by Rauner’s predecessor, Democrat Pat Quinn.

Adding conditions would have expanded the potential base of patients. So far, only 3,000 Illinois patients have been approved to use marijuana for conditions listed in the original law such as cancer, HIV and multiple sclerosis.

In a veto message, Rauner said adding PTSD to the eligibility list would “prematurely expand” the program before the state has had the chance to evaluate it.

“The pilot program is moving forward, but remains in its early stage. Cultivation centers are just beginning to grow their crops, and the first dispensary was licensed at the end of August,” Rauner said. “It is therefore premature to expand the pilot program _ before any patient has been served and before we have had the chance to evaluate it.”

Supporters of adding PTSD noted the decision came a day ahead of Sept. 11, a difficult anniversary for many veterans.

“In my opinion this is a direct disrespect and disregard to all those who have fought for this country,” said Sandy Champion, whose husband, Jim Champion, is an Illinois veteran who has multiple sclerosis and is a member of the medical cannabis advisory board. “It is because of 9/11 that many of our veterans and civilians are suffering from PTSD. They gave their lives, health and freedom to serve us and today our governor, who is the head of our state, let them down.”

The next step for patients may be court. Illinois law says such decisions are subject to judicial review. Last month, PTSD patients in Colorado filed a lawsuit challenging a July decision by that state’s health board against adding PTSD to the medical marijuana eligibility list.

In Illinois, the advisory board is made up of physicians, nurses and patients. It had reviewed medical evidence and listened to patient testimony before recommending 11 conditions to the Illinois Department of Public Health in May. Thursday’s announcement came from the health department’s director, Dr. Nirav Shah, a Rauner appointee.

Last month, Rauner vetoed an extension to the four-year pilot program, saying he would approve it continuing only through April 2018 until it could be evaluated. The first-term Republican’s support of medical marijuana has been tentative at best.

“I’m disappointed after how hard we worked as a board to review the medical evidence and hear patient testimony,” said Leslie Mendoza Temple, a suburban Chicago physician and the advisory board’s chair. “I’m disappointed most of all for my patients. To get news like this is frankly upsetting. It leaves us with fewer options to control their pain and suffering.”

The advisory board wasn’t a rubber stamp for automatically approving conditions. In May, the board rejected three other health conditions because of a lack of scientific evidence or, in the case of diabetes, because of concern that marijuana would stimulate appetite in patients who need to watch their diets.

The board meets again Oct. 7 to hear public testimony in favor of adding new health conditions. Members also will spend additional time reviewing some of the same conditions recommended in May.

Patients must get a signed certification from a doctor as part of the application process to use medical marijuana in Illinois.

The conditions recommended by the advisory board that were rejected Thursday are: anorexia nervosa, chronic post-operative pain, Ehlers-Danlos syndrome, irritable bowel syndrome, migraine, Neuro-Behcet’s autoimmune disease, neuropathy, osteoarthritis, polycystic kidney disease, PTSD and superior canal dehiscence syndrome.

Illinois to divert ‘fair share’ fees from unions

Illinois Gov. Bruce Rauner, dogged in attempts to eliminate fees paid to unions by workers who choose not to join, has instructed state agencies to divert money from nonunion employee paychecks away from organized labor until a judge settles the matter.

In a memo obtained by The Associated Press, general counsel Jason Barclay directs departments under the Republican governor’s control to create two sets of books, one of which would move deductions from nonunion members to the operations budgets of state agencies instead of to the unions, although the money would not be spent.

The idea was immediately condemned by the American Federation of State, County and Municipal Employees, the largest of two dozen unions that filed a countersuit over an executive order Rauner signed last month calling the fees a free-speech violation. He’s seeking a federal court’s declaration that they are unconstitutional.

“This legally questionable scheme shows the lengths to which Gov. Rauner will go in his obsession to undermine labor unions,” Roberta Lynch, executive director of the Illinois council of AFSCME, said in a prepared statement. “To frustrate lawful fair-share agreements, Rauner is ordering payroll staff to make unauthorized reductions in employees’ established salaries.”

The process outlined in the memo calls for preparing one payroll report with the “proper pay” and one, to be processed, that reduces the worker’s gross pay by an amount equal to what nonunion workers normally pay in so-called “fair share” fees. It is not clear how the deductions would affect federal tax withholding or health-insurance payments. Taxes are based on gross pay — if that amount is lower, less is withheld, creating potential headaches down the line.

“We are confident in the process laid out in the memo,” Rauner spokeswoman Catherine Kelly said in a prepared statement. “It’s no surprise that AFSCME is doing everything in their power to deny state employees from exercising their First Amendment rights.”

Rauner has also proposed “right-to-work” zones where local voters could decide whether workers should join unions. While he has said that he is not anti-union, he has frequently asserted that out-of-control union pensions and the political power of organized labor have contributed to the state’s financial woes.

Lynch questioned what legal liability those payroll employees would face in issuing “inaccurate checks.” The system explained in the memo exposes a level of uncertainty associated with what labor expert Robert Bruno called “virgin territory.”

The memo recommends that each agency prepare a “payroll report using the normal figures,” copy and save it, and then create a second payroll “needed to reduce the gross pay” and enter a zero in a category reserved for fair share amounts. Then, it says, the amounts “should be accepted by the comptroller.”

Comptroller Leslie Munger, whom Rauner appointed to fill a vacancy, had stymied the governor’s original plan to create a separate escrow account. Munger relied on the attorney general’s opinion it would be illegal.

The memo said Munger “provided the method” for the latest plan, but after her spokesman, Rich Carter, denied that, Kelly clarified that after reviewing procedures with Munger’s staff, “the governor’s staff identified a way” to proceed. Carter, meanwhile, didn’t answer a question about whether Munger would process the altered payrolls.

About 6,500 nonunion workers pay amounts lower than union dues — about $575 annually — to cover the costs of union negotiating and grievances. Unions must represent those who chose not to join. Rauner’s action could keep about $3.74 million out of union bank accounts.

Bruno, a labor and industrial relations professor at the University of Illinois at Chicago, said Rauner’s move would likely prompt a new legal action by the unions. He said if Rauner is trying to demoralize labor, it hasn’t worked.

“In fact, a rather extraordinary form of unity and consensus has broken out,” Bruno said.