In the game of tax breaks, states play at their risk

The Salt Lake Tribune reports:

Under the threat of losing thousands of jobs to other states, Illinois officials are on the verge of approving a tax-relief package meant to keep Sears and the Chicago Mercantile Exchange from leaving. Now they face another question. Who’s next?

As state senators sent the tax package to the governor’s desk last week, economic development experts said other companies are likely to threaten to move as well unless Illinois offers them more financial goodies. More than 100 companies, including Deere & Co. and Abbott Laboratories, have incentive packages expiring in the next three years — and may want better deals to keep jobs in Illinois.

Businesses thinking of moving to the state could demand even bigger incentives or play Illinois against other states in a bidding war, experts said.

"Once it becomes known that you’re giving incentives, other companies are going to ask for them. Why wouldn’t they?" said Judith Stallmann, a professor at the University of Missouri-Columbia who has studied economic development.

The struggles of high tax Illinois.