What’s worse than central planning? Autocratic central planning. What’s worse than autocratic central planning? Autocratic central planning that pours hundreds of millions of dollars into a failing effort.
But that’s exactly what the Illinois General Assembly just authorized for Gov. JB Pritzker.
Under new legislation, Illinois will deposit up to $400 million over the next six months, upon Pritzker’s request, into a newly created “Large Business Attraction Fund.” The Pritzker Administration says it will be used to “provide the state with flexibility to tailor development packages to each unique situation.” The legislation passed in the Senate Sunday evening. It was earlier passed by the House and awaits Pritzker’s signature.
Pritzker first floated the idea in an October interview with Crain’s, indicating the fund would be a means to rescue his floundering efforts to lure electric vehicle makers to Illinois — his “Reimagining Electric Vehicles” plan. Crain’s and Wirepoints have written several times about that failing effort.
“But with Illinois not yet luring big facilities such as those recently announced in Michigan, Indiana, Ohio and other states, Crain’s wrote, “Illinois could use a big deal-closing fund, Pritzker said—essentially a pot of money the governor is empowered to dip into to sweeten economic development deals when the competition with other states is tight.”
The fund will be administered by the Illinois Department of Commerce and Economic Opportunity, which means it will be run at Pritzker’s direction with no further action needed by lawmakers.
Guidelines for the new fund are vague. The money will be used for loans to “large firms,” which is undefined, that are considering locating a plant in Illinois. Those loans assuredly will be on below-market terms, otherwise the firms could get the loans in the market.
Targeted companies for the program needn’t necessarily be in the EV industry, but “shall primarily consist of established industrial and service companies with proven records of earnings that will sell their product to markets beyond Illinois and have proven multistate location options,” says the legislation.
If Illinois truly has the cash available for this kind of thing, it should be used to help all employers through some direct means such as a reduction in withholding or other taxes. Government is particularly bad at picking winners and losers or looking into the future. It’s better to let the private sector take the losses gambling on that, as we see things, and the private sector is more likely to get it right.