Illinois waits for Superman, does Amazon wear the cape?
Amazon’s plans to hire 50,000 workers at the new headquarters would single-handedly shift the city and state’s economic landscape.
Jeff Bezos can’t leap tall buildings in a single bound.
But Illinoisans are styling the Amazon CEO as a man from Krypton who – with a little luck – might find his spacecraft landing in our backyard.
What’s left unsaid is that Illinois’ destiny lies in its own hands. It will not be determined by one business, one investment or one individual.
But it’s true that one of the globe’s corporate crown jewels wants to build its second headquarters. And residents downplay the significance of that investment at their own risk.
Amazon has issued a call for proposals from cities across the country. And the criteria the company has laid out so far match pretty well with what Chicago has to offer.
Major population center: check. Proximity to an international airport: check. Access to major highways and arterial roads: check. Access to mass transit: check. An enormous amount of office space at a decent price: check. Strong tech workforce: check.
Chicago is also a logistics hub – fitting nicely with Amazon’s core business – and is home to a media ecosystem capable of handling the company’s foray into film and television production.
Amazon’s plans to hire 50,000 workers at the new headquarters would single-handedly shift the city and state’s economic landscape. The largest employer in the Chicago area – the U.S. government – reported more than 42,000 full-time local employees last year.
Illinois’ population loss between July 2015 and July 2016 was 37,500 people. That was the worst decline in the nation.
In short, Amazon would bring a historic number of paychecks to a state with too few.
And downstate Illinoisans would be unwise to think that won’t impact their neck of the woods. The Amazon move has the potential to be a boon not just for Chicagoans, but for families from Crystal Lake to Kankakee to Carbondale.
Payroll tax revenue alone could net the state hundreds of millions of dollars a year, even if one assumes sweeteners from Springfield. And serving as home to an innovation giant can have serious benefits down the line.
Why not service the nation’s largest fleet of self-driving trucks in Effingham? Who says Belleville can’t be the drone capital of the Midwest? And could a south suburban Chicago airport – discussed for years – finally make fiscal sense to a private developer?
An investment like Amazon’s starts to make big dreams seem like real opportunities.
But there’s a problem. And it points to a much deeper issue with how Illinois treats businesses.
“A stable and business-friendly environment and tax structure will be high-priority considerations for the project,” Amazon’s request reads. Illinois’ business climate is neither stable nor friendly. It’s unstable and confiscatory, and it doesn’t appear to be getting better.
Illinois ranked No. 48 in the country for its lawsuit environment in a report released Sept. 12 by the U.S. Chamber Institute for Legal Reform. “Chicago or Cook County” ranked as the worst local jurisdiction in the nation.
And don’t forget, lawmakers in July passed the largest permanent income tax hike in Illinois history. Notably, Bezos contributed $100,000 in 2010 to help defeat an initiative in Amazon’s home state of Washington that would have created a state income tax.
That doesn’t mean Amazon won’t take all the goodies it can get. Its request for proposals is clearly courting cities for massive incentives. But Illinois has already given millions in tax breaks to Amazon in connection with its distribution centers, which have popped up across the state.
With so many small businesses struggling to get by, it’s not fair to give special tax favors to ease the burden of a global behemoth.
Instead of throwing hundreds of millions of dollars worth of special subsidies and tax incentives to land one megadeal, structural reforms to how the state treats businesses large and small would go a long way toward creating opportunities for Illinoisans from the ground up – headquarters or not.
To compete for Amazon’s new hub, Illinois is better off pursuing innovative, unique partnerships with the resources it already has at its disposal.
Might the company bite at a long sought-after deal for the Thompson Center? In its place, Amazon could build a 21st century Sears tower – fit for the new king of American retail. Policymakers should also work aggressively to develop a package of partnerships with local universities, leveraging private donations and endowments.
Clearly, Illinois and Chicago have a lot to sweep under the rug should Amazon come knocking.
But lawmakers should know this: Efforts to reform the state’s business climate would be a win for residents regardless of whether the dot-com giant comes to town.