Cynical as you no doubt are about Illinois government, you should still be stunned by the dollar total of taxpayer subsidies for Amazon’s warehouses: $741 million for northeastern Illinois alone.

It’s all in a superb report jointly completed by WBEZ and the Better Government Association. Read the whole thing.

Amazon warehouse under construction. Source: WBEZ/BGA.(Credit: Manuel Martinez/WBEZ.)

Desperate for jobs, local municipal governments have been bidding with taxpayer dollars to lure Amazon into expanding its warehouse capacity in their areas. Assistance comes from the State of Illinois through its EDGE program.

But what conceivable sense does that make for the region or the state as a whole? Amazon needs the warehouses to serve the huge population in and around Chicago, and paying for them should be Amazon’s problem. It’s not like they won’t be built without taxpayer subsidies.

It’s beggar-thy-neighbor policy at its stupidest. Instead of banning it, the state participates in it through its EDGE program.

The effect is to reduce Amazon’s distribution cost by lowering its warehouse cost. More money for Amazon, in other words, at taxpayer expense.

The punishment goes beyond taxpayers. Other retailers, especially smaller ones without the clout to shake down government, are disadvantaged. It’s part of how Amazon is driving them out of business.

The Financial Times profiled an example in August when Good’s of Evanston was closing permanently after more than a century in business. The owner cited the opening of an Amazon warehouse in neighboring Skokie last year, which has enabled Amazon to slash delivery times for shoppers living in the Chicago suburbs. Amazon offers many products that Good’s sold, such as luxury pens. Sales of luxury pens have “been decimated, and it’s down, in large part, to Amazon,” the owner told the FT.

Which communities has Amazon typically hit up to pay the subsidies? Minority communities like University Park and Markham, the WBEZ/BGA report concluded.

And the whole process is shrouded in secrecy thanks to what the report describes as a patchwork of nondisclosure agreements and lack of transparency.

Salute to WBEZ and BGA for cutting through that to get the facts.

-Mark Glennon

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Susan
26 days ago

From an article on corrupt practices of Illinois Government Industry, re EDGE: “DCEO’s unlawful awards of excessive tax credits hurt ordinary taxpayers who do not get special tax breaks and who will be on the hook for the tax dollars the state doesn’t receive from these businesses. They also hurt other businesses that don’t qualify for EDGE tax credits, which are placed at a competitive disadvantage when the government picks winners and losers through selective awards of tax credits. The Liberty Justice Center filed this lawsuit on behalf of taxpayers to make DCEO follow the law. We asked the court… Read more »

Jim
28 days ago

Better off making a Civilian conservation Corp type deal and pay the residence and make them work and learn a job or whatever than send the money to Bexos and leave the taxpayers picking up bill for sewer water roads etc. Corporations may be “people” and may have right to make political contributions but maybe tax funds and welfare should only go to registered voters that would cut out corporations and unions both

b Wilde
29 days ago

During a walk on Easter I observed a United States Postal Service truck out doing its Sunday Amazon deliveries. This action should be scorned by all Americans. While Jeff Bezos would like the USPS to be a subsidiary of Amazon ready to do his bidding it is not. The USPS is a money losing enterprise shored up by taxpayers. Sunday deliveries that favor Amazon over our small businesses are wrong but this is especially glaring during a time small businesses across America have been forced to close due to covid-19. Even more objectionable is seeing this done on Easter when… Read more »

Poor Taxpayer
29 days ago

There is a “Free Lunch” for Amazon, just not for the honest hard working taxpayers.

Illinois Entrepreneur
29 days ago

I wonder if there was a national referendum on eliminating corporate welfare, how would states and citizens vote? Probably overwhelmingly in favor of it. Maybe even enough for a Constitutional Amendment. I don’t know what form that Constitutional Amendment would take or say, but if it were to eliminate all corporate welfare and subsidies at every governmental level in the USA, imagine the impact. No more dishonest backroom deals, no more economic engineering, EDGE programs, billion dollar boondoggles — what would our politicians have left to do? Everyone competes on a fair playing field! As it is currently, it’s a… Read more »

Old Spartan
30 days ago

Wirepoints, you are on to a critical topic here. And hats off to the one University Park trustee who voted “NO”. You are the only one who did your job here. The EDGE program is a disaster. There is little to no coordination between the State of Illinois and most local communities on projects like this. EDGE is a Blago/Quinn/ Pritzker mutation of what DCCA used to be. But the key point is– why should any governmental unit in Illinois give a nickel to Amazon. The Chicago metro area is at the the heart of the transportation system in the… Read more »

Platinum Goose
30 days ago
Reply to  Old Spartan

If there was some consolidation of these communities they wouldn’t be able to get away with this.

Last edited 30 days ago by Platinum Goose
Riverbender
29 days ago
Reply to  Old Spartan

Local politician here giving a speech once pointed to the warehouses and bragged on how he created all these new jobs for the area. He forgot to say that we, the taxpayers, paid for those jobs not him. The message even soaked the usual Democrat voters in the area as he was surprisingly voted out of office.

Freddy
30 days ago

Reminds me of when people voted for Ptell. Many people were unaware that when a tax abatement or any other incentive was given to a business or homeowner including exemptions the tax rate goes up to compensate. They can collect what was levied (not billed or collected) the year before plus up to 5% if needed. The Lowes warehouse here in Rockford is a prime example. They received over $13M in abatements which increased the tax rate for everyone else. Shortly after that expired I did not see any reductions in the tax rate other than the last two years… Read more »

David F
29 days ago
Reply to  Freddy

Isn’t that nice? Yeah well your paying for it!
Amazing people think these towns are just printing money or something, people don’t seem to understand they are getting the money from them!

George
30 days ago

Great story. Also reminds me of the obscene abuse throughout Illinois of TIFs and Enterprise Zones. Add high taxes and these silly virus shutdowns; and the citizen and small business are doomed. Wait until inflation and concomitant high interest rates show up (and inevitably they will) and we are really in for some fun.