Illinois Republican Party

Indiana Steps Up Economic Turf War With Neighboring Illinois
5/11/2012

By Howard Packowitz, Of DOW JONES NEWSWIRES

ROSEMONT, Ill. -(Dow Jones)- Indiana's economic development chief crossed the border into neighboring Illinois Thursday, suggesting that existing businesses have a better chance to build profits if they relocate to the Hoosier state.

Indiana Commerce Secretary Dan Hasler spoke to about 125 site-selection consultants and commercial and industrial real estate agents attending the first Opportunity Indiana Summit, held in the Chicago suburb of Rosemont.

"It's not that we're trying to poach companies, but if they're going to move, let's keep them in the Midwest," said Hasler, who is also the chief executive of the state's economic development corporation.

Since January of last year, Indiana officials said they lured 17 Illinois businesses and close to 1,700 workers.

Turf battles between the states are intensifying even though a recently released report from the Paris-based Organization for Economic Cooperation and Development said such competition is counterproductive.

The OECD urged a more unified approach, particularly in such areas as workforce training and infrastructure improvements, for the region that encompasses Illinois, Indiana and Wisconsin.

However, political realities seem to be fostering more combative strategies. Democrat Pat Quinn is Illinois' governor, while conservative Republicans Mitch Daniels and Scott Walker lead Indiana and Wisconsin.

Late last year, Indianapolis Mayor Greg Ballard visited the Chicago headquarters of derivatives exchange operator CME Group Inc. (CME), hoping the company would move to his city. At the time, CME and other Illinois-based businesses protested an increase in Illinois' corporate tax to 7%, from 4.8%, to help the state plug a massive budget deficit. CME stayed in Illinois after lawmakers approved tax incentives.

Illinois leaders must "up their game" to enact pro-business initiatives, otherwise a "joint marketing effort" won't be effective, said Hasler, who's a member of Gov. Daniel's cabinet.

Daniels signed controversial right-to-work legislation earlier this year that spares workers at unionized companies from joining unions or paying dues.

Businesses support the right-to-work law because it broadens the pool of employees to include those who don't want union membership, Hasler said.

He added there are a "constellation" of factors that prompt companies to relocate, including reduced labor costs, cheaper rent and real estate.

Hasler cited a recent survey of chief executives that ranked Indiana fifth-best and Illinois 48th for business.

However, a spokeswoman for Illinois Gov. Quinn, Brooke Anderson, pointed to a separate report showing the state has the fifth lowest effective tax rate in the nation.

"Illinois, not Indiana, is one of the best places to do business in the world," Anderson said.

She noted that recently-signed worker compensation reform saved Illinois businesses some $500 million a year.

Quinn's push for pension and Medicaid reform will give businesses the "fiscal certainty they need to expand and grow in Illinois," Anderson also said.

-By Howard Packowitz, Dow Jones Newswires; 312-750-4132; howard.packowitz@dowjones.com

SOURCE: nasdaq.com

< Back to News