Chicago City Wire

Illinois might be putting problems into its shopping basket by courting Amazon's second headquarters, according to an investigative reporter for the Better Government Association.

“We’ve had our hearts broken many times from many of these corporations,” Alejandra Cancino said on ABC7's "Eyewitness News" recently. “One program, the Economic Development for Growing Economy (EDGE); it’s a tax credit program. Over the years, that specific incentive ... most of the companies receiving it have not kept the promises they made.”

Illinois’ EDGE program was recently extended to June 30, 2022. It provides a tax-refundable incentive to businesses that create jobs, invest capital and work to improve the standard of living in Illinois.

Cancino used Motorola as an example of a failed corporation abusing Illinois’ tax incentives.

“Several decades ago, the state gave Motorola millions of dollars to put a plant in Harvard, Illinois," she said. "Six years later, they closed their doors. A couple years later, Motorola got a huge incentive from the state. A year after they received the incentive, thousands of people got laid off.”

Illinois has had such heartache before, according to Cancino.

“It’s important to remember that this isn’t new," she said. "This has going on for many decades. There’s been years where there have been a lot of questions whether this has been a good thing to do or a bad thing to do, and now it sounds like now we are back to, 'Yeah, we want give everything we can to companies.'” 

Cancino argued that the FoxConn deal with Wisconsin has elevated Amazon’s courtship but warned that it is the taxpayers who are footing the bill. Cancino warned taxpayers might not benefit until years after a deal such as Wisconsin's with FoxConn.

“Their own non-partisan government group actually looked at the money, and they found that it’s going to take them 25 years to break even,” she said. “There are different kinds of incentives but … when we are talking about incentives, we’re really talking about corporate income tax breaks or corporate tax abate or special tax districts …and all of those are put together in a big package that is offered to a corporation.”

Cancino's concern might be moot: Amazon might have already decided on a place, she said.

“The research shows that most of the companies already know where they want to go, and incentives only make a difference in less than 15 percent of the time,” Cancino said. “That means that Amazon, for all we know, might already know where it wants to go, and it’s just trying to figure how much more it can get from that location.”

Illinois joins Alabama, Connecticut, New Jersey, California, New York, Texas, Arizona and Georgia in vying for Amazon’s new headquarters. Building the second headquarters is estimated to cost $5 billion in construction and operation expenses but is expected to employ 50,000 people. 

Amazon is the world's largest internet retailer and in 2015 surpassed Walmart's market capitalization to make it the most valuable retailer in the country. It is based in Seattle.