TERRE HAUTE — The Illinois Legislature, in an effort to get a handle on an ominous budget crisis, passed a temporary increase in the state’s corporate and personal income tax this week. It will undoubtedly be a controversial move with potentially huge ramifications, both political and economic.
Among the concerns is that the hefty tax increase will hurt economic development and kill jobs. The Democratic-led Legislature in Springfield apparently thought the state’s dire financial circumstances gave it little choice.
Indiana — Illinois’ more conservative neighbor to the east — was anything but neighborly in response to the income tax increase. It was almost gleeful. Hoosier political leaders, as well as those from Illinois’ other neighbors, quickly let their intentions be known that they lust to benefit from the Illinois agony by pilfering people and jobs from the beleaguered state.
According to the Associated Press, Gov. Mitch Daniels, in an interview on Chicago’s WLS-AM, joined the chorus with this quip: “It’s like living next door to ‘The Simpsons’ — you know, the dysfunctional family down the block.”
Funny. At least from this side of the border.
Apparently, the budding border war involves more than just cute words. The Indiana Economic Development Corp. let it be known immediately after the Illinois tax vote that it would aggressively pursue Illinois-based companies by marketing the state’s cost advantages.
An IEDC spokesperson acknowledged in an e-mail that ultimately “it’s better for the entire region and country when Illinois’ business climate is competitive,” but that’s not stopping Indiana from taking advantage of this situation.
We understand the temptation. But we urge caution. While Indiana does, thankfully, face a less daunting budget crisis, it’s important to note that business prospects look at more factors than just the tax structure when deciding where to locate or expand. They look at infrastructure, the educational system, cultural amenities, overall quality of life, and more.
Indiana may indeed experience some victories at Illinois’ expense. But those gains will be short-lived if the state doesn’t take care of important public infrastructure needs within its own borders.
© 2024 Community Newspaper Holdings, Inc.