As fate would have it, Governor Bruce Rauner revealed his plan to fork over as much as $1.26 million a year in tax credits to ConAgra Foods at roughly the same time parents were packing a Board of Education hearing room to protest the latest CPS cuts in special education.
So our dead-broke state has millions for Fortune 500 corporations but not enough money to educate our poorest, most vulnerable children. It’s something to keep in mind the next time the governor tells you it’s all about the kids.
ConAgra is a food-producing conglomerate that makes everything from Healthy Choice to Slim Jim and has been based in Omaha, Nebraska, for years.
In the last few years its sales have been falling, so the company decided to cut 1,500 jobs and move the corporate headquarters to Chicago. To accommodate its needs, Governor Rauner’s giving ConAgra tax credits so it’ll move into the Merchandise Mart. It’s sort of like he’s rewarding them for firing all those people back in Nebraska.
This is the same Governor Rauner who says we have to obliterate unions in order to foster free, unfettered markets. I’m not sure how giving one corporation an edge over its competitors is fostering free markets. Unless some markets are freer than others.
So far the governor won’t come right out and say exactly how much the tax credits will cost the state. But the Tribune calculates it could be between $630,000 and $1.26 million a year, depending on how many workers the company relocates. The tax credits come from the Economic Development for a Growing Economy Tax Credit Program—aka EDGE—a program that allows the governor to dole out tax credits to businesses that move to Illinois.
By giving that money to ConAgra, Rauner ensures it won’t be on hand to help kids in those overcrowded special-ed classes, or to help all the other social service providers whose budgets he’s cutting as part of his effort to get Democrats to pass his antiunion legislation.
“We look forward to the opportunities created by ConAgra’s decision to invest in Illinois, and welcome them to their new home,” Rauner said in a press statement.
Invest in Illinois? It’s more like we’re investing in ConAgra. If Slim Jim sales go up, I want a cut of the profits!
Mayor Emanuel’s also cheerleading the deal, though it’s draining the state of money he says he’s counting on to avoid massive school layoffs.
“By choosing Chicago as their new home, ConAgra Foods sees the same strengths that so many other companies see in relocating their headquarters here, from our talent, to our transportation, to our quality of life,” the mayor said in his press statement.
OK, Mr. Mayor, if Chicago’s so great, how come we had to pay ConAgra to come here?
You know, fellas, it’s bad enough we’re getting fleeced on this deal. Don’t feed us shit and tell us it’s chocolate pudding.
This is a pretty lousy way to grow our economy. Instead of creating new jobs it will be importing a bunch of people from Omaha. Moreover, the Merchandise Mart is in the booming River North area—you shouldn’t have to pay people to move there. Yelp, Motorola Mobility, and Regus all moved into the Mart without a handout from the governor.
For what it’s worth, ConAgra CEO Sean Connolly already lives in Winnetka—as does Rauner. Give Connolly credit for this: he masterfully played Omaha against the state of Illinois, entertaining offers from both before settling on Chicago. In the end, Omaha mayor Jean Stothert was almost begging him to stay.
“We offered them TIF [financing],” Stothert told reporters. (Yes, folks, they have tax increment financing in Nebraska too.) Ultimately, Connolly still turned her down.
This isn’t the first time ConAgra has put the squeeze on Omaha. In the 1980s company leaders threatened to leave if city officials didn’t allow them to tear down 20 or so historically valuable buildings in Jobbers Canyon, an industrial part of town. Back then sprawling suburban-style campus settings were in with corporate honchos.
Now apparently they’re out as the honchos, finding their inner hipster, look to move to old, retro buildings such as the Mart. Perhaps Rauner and Connolly will show up to the official opening in fedoras.
Here’s hoping that corporate fashions don’t change again. Otherwise Rauner may propose demolishing the Mart to keep ConAgra from leaving.
Welcome to Chicago, ConAgra. I see you already know the players and how to play the game.