Illinois facing job assault from other states

CHAMPAIGN, Ill. — Even as Gov. Pat Quinn hailed the start of a construction project Tuesday that will create 1,200 short-term jobs, Indiana and South Dakota kept up a push by other states to chip away at Illinois' vulnerable economic image and lure jobs away.

Quinn announced a $146 million infrastructure project at a Ford Motor Co. assembly plant on Chicago's southeast side, which he said would ease rail and vehicle congestion. But Blue Island, Ill.-based Modern Forge Cos., which makes truck, RV and aerospace parts, at the same time announced plans to expand in Indiana and possibly leave Illinois entirely. It plans to hire up to 240 people in permanent jobs over the next three years.

"I don't think it takes a genius to figure out the business climate in Indiana is better than Illinois, and that's been coming on for a long time," said Modern Forge general manager Patrick Thompson, who said he expects a large number of the company's 275 Blue Island employees to take jobs 35 miles east in Merrillville. The company will close the 97-year-old Blue Island plant if its new facility does well, he said.

"It's not just about state income taxes," Thompson added, citing worker's compensation costs and other factors.

The move fueled more debate over Illinois' business climate, and how much its recent corporate and personal income tax increases have damaged its image among business owners. While some Illinois business leaders commented that states in the area should stop bickering and work to develop a regional economy, Indiana's secretary of commerce said Illinois' high taxes and battered image make that unlikely.

Illinois' corporate tax-rate increase, from 4.8 to 7 percent, was intended to help ease the state government's multibillion-dollar budget deficit. But it made the state a target for Indiana, New Jersey and other states trying to lure businesses away. Over the past month, a smiling South Dakota Gov. Dennis Daugaard has joined the dogpile, asking via direct-mail postcards sent to businesses in Illinois, Minnesota and California, "Tired of taxes? Call me."

Quinn, for his part, talks up Illinois' successful bid last year to keep Navistar International Corp.'s headquarters in state, and bring about 1,000 jobs with it from Indiana.

For months now, though, a number of Illinois businesses have said they just might leave if the state doesn't listen to their complaints.

Quinn, as he announced the Chicago project, said Illinois made Modern Forge an offer to stay and maintained that the state remains the cornerstone of the Midwest's economy.