Once upon a time, there was a company called Sears. Many years ago ago – 1989 to be precise – it threatened to dump Princess Illinois and run off with another state unless it was given a tidy sum ($170 million). Princess Illinois forked over the dough, and there was much rejoicing throughout the land. Last year, Sears decided it was time to ask for another sum. And as soon as Princess Illinois agreed? The folks at Good Jobs First tell the rest of the story:
Gov. Pat Quinn’s signature had barely dried on the Illinois legislature’s lavish new tax-break deal to retain Sears Holding Corp.’s headquarters when the company announced store closures and layoffs. The deal, valued at up to $275 million in property and income tax breaks, was signed into law on December 16. Yet on December 27, the company announced that it would close between 100 and 120 Kmart and Sears stores.Cynically, we note that the initial list of 80 closures does not include any Illinois stores, nor have any headquarters layoffs been announced… yet. But with Sears still losing market share, and reporting another decline in same-store sales (down 5.2% late 2011 over late 2010), how safe can Illinois jobs be?
And Illinois isn’t alone. There is a basic problem with giving in to extortion:
as we forecast in our blog of last August: when a company is ailing and it asks for a tax break, the wisdom of the plant-closings movement tells us: tax avoidance can be one form of disinvestment, another early warning sign of job loss.Put another way: if a company doesn’t see a future in the community or the state, why should it keep investing in the schools or roads or universities?
Of course, recognizing this fact is one thing, getting politicians – who care about how many jobs they can tout right now – to do anything about it is a whole different story. For more on the subject, check out Good Jobs First’s website or their valuable blog, Clawback.
