Draw a map of Chicago-area communities where businesses have received state subsidies. Now draw another of places plagued by joblessness.
The result, according to a watchdog group that examined 15 years of subsidies to companies in the six-county Chicago area, are two maps that barely touch.
It’s the “reverse Robin Hood effect” of the state rewarding the rich, said Greg LeRoy, executive director of Good Jobs First, a Washington, D.C.-based non-profit group that has charted the impact of state-supported incentives on communities.
Illinois is not alone with this issue, LeRoy said, explaining that the group’s recent studies of state subsidies to businesses in Minnesota and Michigan came to similar conclusions.
State subsidies given Chicago-area companies between 1990 and 2004 have “shortchanged” Chicago and nearby suburbs, prompting greater job sprawl and regional inequality, concluded the study, which LeRoy described as the first of its kind for Illinois.
The three-year-long effort, funded by the Ford Foundation, looked at $1.2 billion provided in 10 state subsidies.
The bulk of the money, about $951 million, was made available through Illinois industrial revenue bonds, the report’s figures show.
The winners, according to the study, were the North and Northwest suburbs and the corridor near O’Hare International Airport.
Firms that moved to the airport corridor would have moved there “without any additional help” but instead benefited from $198 million in subsidies, LeRoy said.
The report also illustrated an imbalance in subsidies directed to more rural areas, as well as away from communities with large numbers of minorities.
While the city of Chicago had 38 percent of the region’s population in 1990, it received about 15 percent of the subsidies given businesses between 1990 and 2004, the period the study examined, according to the report. That translated to Chicago receiving only $64 per capita.
“Subsidies are going to the places that need them the least,” the report said, adding that “relatively few” state financial incentives have gone to firms in mostly African-American communities in Chicago or nearby suburbs.
The disparate results, LeRoy said, reflect the lack of rules that encourage business to locate in places that will foster economic development, take advantage of affordable housing and reduce job sprawl.
“Not having targeted rules means the rich get even richer,” he said.
Still, LeRoy praised a 2003 state law that makes all of its business dealings available on the Internet because it allows greater public scrutiny. Another law, passed last year, boosts tax credits for firms that locate in areas with affordable housing.
Andrew Ross, a spokesman for the state’s Department of Commerce and Economic Opportunity, said Gov. Rod Blagojevich has not considered any move to rewrite the rules for state subsidies.
Ross defended the state’s most recent efforts, saying “the governor has a very strong track record in making the investments that matter the most when it comes to working families.” Ross said the bulk of the study deals with state subsidies given out during prior administrations.
Frank Beal, head of Chicago Metropolis 2020, a business-supported policy group that helped with the study, said he concluded that state subsidies aren’t necessary for spurring economic growth.
“We don’t need any of these subsidies,” Beal said. “It’s fairly clear we have no policy for giving away money in Illinois. It’s who comes in the door.”
Peter Skosey of the Metropolitan Planning Council praised the study for showing the need to link jobs, affordable housing and transportation to economic development.
Financial help for firms located far from downtown Chicago adds to some workers’ commutes while it also creates jobs beyond the reach of others without cars, the study said.
Out of 782 subsidies reviewed by the watchdog group, only 141 were given to firms located within a half-mile of a Chicago Transit Authority station or bus line, the report found.
In addition, only 3 percent of the suburban firms that received subsidies “could be easily reached by CTA service,” according to the report.
One of the wealthier suburban communities where businesses have benefited from state subsidies is Lincolnshire. Firms there have received about $9 million during the 15-year period, according to the study.
But Lincolnshire Village Manager Bob Irvin doubted whether subsidies have played a major role in firms’ decision to put down roots in his community.
At the same time, he said, Lincolnshire has joined a clearinghouse to help provide state-sponsored industrial bonds to Lake County communities that need them.
In Harvey, a largely African-American community in the south suburbs, Mayor Eric Kellogg said local officials need to learn as much as they can about state subsidies so they can entice businesses to locate there.
A move in that direction, Kellogg said, was the recent creation of a local chamber of commerce.
But, he added, the state also has to inform communities like his about how to attract businesses with such subsidies. According to the report, Harvey firms have received $387,000 in state subsidies over the years.
Within Chicago, the Loop received a major share of the subsidies, and firms on the city’s North Side and South Side did far better than those on the West Side.
On the South Side, most of the money went to firms in the Far Southeast Side or Southwest Side, areas where manufacturing traditionally had been located.
City officials declined to comment, saying they had not read the report.
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sfranklin@tribune.com
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Big winners
Some of the firms that reaped large amounts of subsidies, according to the study, were:
-Ford Motor, $15,050,655 for facilities in Chicago Heights and Chicago
-Lucent Technologies, $31,818,211 for a facility in Naperville
-Motorola, $19,324,027 for facilities in Schaumburg, Harvard, Arlington Heights, Libertyville and Elgin
Source: Good Jobs First
