CHICAGO (AP) -- A bid by Archer Daniels Midland Company for $20 million in state tax breaks as it decides whether to keep its global headquarters in Illinois drew criticism Tuesday from some state lawmakers, one of whom likened the agribusiness' strategy to blackmail.
Testifying before the state House Revenue and Finance Committee, ADM executives explained that they were contemplating moving the headquarters from Decatur in central Illinois to a more cosmopolitan city that would be more attractive to young industry talent. Chicago officials say they're in the running and talking to the company, though ADM has declined to name the cities it's considering.
"We have truly evolved into a global organization," said Greg Webb, ADM's vice president of government relations. "We feel we need to establish this new global center." Executives also mentioned the need to be closer to an international travel hub.
The sharpest criticism at the hearing in Chicago came from Rep. Barbara Flynn Currie, a Chicago Democrat and majority leader in the House, who said ADM and other companies vying for individualized tax breaks hurt Illinois as a whole.
"We ... eat away at the tax base," she said. She added such companies were "essentially blackmailing the state ... saying if you don't go through this hoop for us, we may think about going somewhere else."
ADM — which processes corn, soybeans and other crops to make everything from animal feed to ethanol — has about 30,000 employees worldwide, about half of them overseas.
It first announced its plans last week. Even as the global headquarters would move elsewhere, ADM said the bulk of operations and 4,400 jobs would stay in Decatur. A new headquarters would have about 100 employees and become home to a new technology center that would eventually add another 100 workers.
The move would happen in late 2014, ADM spokesman David Weintraub said Tuesday.
The executives also revealed they are no longer pursing an earlier proposal for a 10 percent break on utility taxes. Now, they are only seeking legislative changes enabling ADM to apply for tax credits totaling around $20 million.
A skeptical Rep. David McSweeney, a Cary Republican, asked ADM's chief financial officer why a comparatively insignificant credit of around $1.2 million annually for 20 years would influence decisions of a company valued at around $24 billion.
"While $20 million does not appear to be that much money, that's the reason ADM has been successful," Ray Young responded. "(It's) minding its pennies, nickels and dimes ... to make sure we remain competitive."
ADM's executives also sought to reassure Decatur residents.
"Decatur remains a very critical and important asset for the company," Webb said. "They understand that there are some needs of this global corporation ... that (Decatur) cannot facilitate."
McSweeney said would oppose ADM's request, advocating instead for lower corporate tax rates across the board.
Later Tuesday, Illinois Chamber of Commerce President Doug Whitley said he generally supported companies' bids for tax credits. And he said it was a bad reflection on Illinois tax policy that so many feel obliged to approach legislators one by one asking for the breaks.
"Companies don't come asking for credits and deductions unless the overall (tax) rate is too high," he said. "I think we've got a problem with the tax code and competitiveness."
- Consumer Discretionary
- tax credits
- Archer Daniels Midland Company