Ill. Fights States' Efforts To Woo Its Businesses

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It isn't uncommon for neighboring states to poach business from each other, but ever since Illinois passed a tax hike earlier this year, the efforts by other states to woo Illinois businesses has gotten intense. Illinois officials say they've lost no ground, but the governor is meeting with one of Illinois' largest employers to address concerns about the state's fiscal condition.

STEVE INSKEEP, host:

Illinois' neighbors are trying to poach the state's businesses. After recent tax hikes in Illinois, other states began courting companies with claims of being more business-friendly, and so now the governor of Illinois is trying to reassure businesses.

NPR's Cheryl Corley reports.

CHERYL CORLEY: So here's what other states want Illinois companies to know: Wisconsin is open for business. In billboard ads, Indiana asks Illinois firms if they are Illinoyed. And early on, even New Jersey got into the act.

(Soundbite of advertisement)

Unidentified Man: Have you had enough of Illinois' outrageous tax increases that stifle businesses and cost jobs? Then move your business to New Jersey.

Governor CHRIS CHRISTIE (Republican, New Jersey): Hi, I'm Chris Christie...

CORLEY: The effort to grab jobs from Illinois began in earnest after Governor Patrick Quinn signed a tax hike into law in January, raising the state's personal income tax from three to five percent and the corporate rate to seven percent. Add to that a personal property replacement tax that businesses typically pay, and the corporate rate jumps to 9.5 percent.

Warren Ribley heads Illinois' Commerce Department. He says that revenue helps provide money to a state with huge budget problems, and he argues that it won't scare businesses away.

Mr. WARREN RIBLEY (Director, Illinois Department of Commerce): In fact, the day after the income tax took effect, we got - I got a personal call from one of the largest employers in Southern Illinois saying they'd decided to move forward with a major investment that's going to create nearly 450 new jobs.

CORLEY: That would be Continental Automotive Group in Southern Illinois, and Ribley can rattle off the names of other companies, too. But the hunt for Illinois businesses continues. Indiana has put billboards up in Illinois which say: Sometimes the grass really is greener, with a map of Indiana etched on the green grass.

Mitch Roob is the CEO of Indiana's Economic Development Corporation.

Mr. MITCH ROOB (CEO, Indiana Economic Development Corporation): The message that we try to send repeatedly in Indiana is that we have a balanced budget, we have a fully funded pension and we have a Triple-A credit rating. So we will not have to raise your taxes to carry out the functions of government.

CORLEY: Despite its own budget battles, Wisconsin has been aggressive, too -recently announcing that it had captured an Illinois prize.

Catalyst Exhibits is located in Crystal Lake, Illinois, about 25 miles south of the Wisconsin border. In the assembly room this day, workers are building platforms for a trade show. President Tim Roberts says Wisconsin offered a deal that it couldn't refuse, and the company will soon relocate to a Wisconsin facility closer to an interstate highway.

Mr. TIM ROBERTS (President, Catalyst Exhibits): At the time the income tax hike came down, we were getting all the ducks in a row, okay, trying to do an apples-to-apples comparison, and that was literally the straw that did break the camel's back.

CORLEY: Doug Whitley heads Illinois' Chamber of Commerce. He says even though the Illinois tax hike was a bad signal for business, he calls the rhetoric from surrounding states political theater. He says it's time for Midwest states to work together as a region.

Mr. DOUG WHITLEY (President, CEO, Illinois Chamber of Commerce): The message that the governors want to portray is one that they are sensitive to the need to create jobs. I just think it's unfortunate they think that the best way to create jobs is to try to poach the neighbor's employers.

CORLEY: No large Illinois company has announced a move yet, but when Caterpillar's CEO sent a letter to the governor about the state's fiscal condition, that caused quite a stir.

Governor Quinn meets today with Caterpillar, one of the state's largest employers. Caterpillar officials say they are seeking reforms that will make the state more business-friendly.

Cheryl Corley, NPR News, Chicago.

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