“You can’t see it. It’s electric! You gotta feel it. It’s electric!”
Illinois Gov. J.B. Pritzker recently slid on over to Glasgow. He was selling Illinois as the place to build electric vehicles and invest in renewable energy during the United Nations Climate Change Conference.
Exhibit A was the bill to spend $694 million on the state’s aging nuclear power plants and $3.4 billion on wind and solar. The bill also closes coal- and oil-fired electricity generation within nine years and natural gas after 24 years. Those moves are expected to drive up utility rates, but then those rates are the sources of funding.
The package also has a $4,000 tax credit for buying an electric vehicle.
Which ties in with Exhibit B in Pritzker’s electric dreams: A more recent piece of legislation offering incentives to electric vehicle makers called the REV Act (Reimagining Electric Vehicles). They can pay nothing in corporate state income taxes for five years if they hit investment and job creation marks. The incentive applies to makers of electric cars, batteries and charging stations.
But if you are an electric car manufacturer, there may be a few questions you should ask Illinois’ climate-friendly governor before investing millions in the state.
After the five years is up, what happens to those corporate taxes? Illinois’ corporate taxes are now sixth-highest in the nation, with the top rate hitting 9.5%. For 35 years economists have agreed corporate taxes hurt capital formation and economic output, according to the Tax Foundation.
In a few years, those electric car manufacturers will be subject to the same bleak business environment as every other manufacturer in the state. Since 1990, Illinois has lost nearly 370,000 manufacturing jobs, a 40% decline compared to the 31% decline nationwide.
And their electric autoworkers will face the same aggressive taxation that hands them the nation’s second-highest property tax bill amid declining public services. Illinois taxation and debt drove the state’s first population loss in over 200 years.
Pritzker passed $655 million in new taxes, mainly on businesses, to prop up his current budget. More specifically, he shut down job-growth incentives he enacted earlier in his term. He started calling them corporate “tax loopholes.”
Whether it’s a tax incentive or a tax loophole seems to depend on whether Pritzker needs the money. State lawmakers noticed.
“How can I tell the businesses who are looking at this incentive here tonight that it won’t be reversed in next year’s budget or the budget after that if the governor suddenly decides that instead it’s a corporate loophole instead of an incentive to attract businesses?” said Rep. Tom Demmer, R-Dixon. “He’s done it before.”
Pritzker’s electric slide was visible previously when he needed money.
In 2019, he proposed and got electric vehicle registration fees hiked from $17.50 to $248. At one point he was pushing for $1,000 a year for electric vehicle plates. His rationale was that electric vehicles don’t pay for roads and bridges through fuel taxes, so the plates were the best way to get money for his $45 billion infrastructure plan.
Try to tax electric vehicles $1,000 one year, give them $4,000 another.
“With our climate action plan in one hand and the electric vehicle REV Act in the other, I will aggressively work to recruit and support businesses that will create thousands of good jobs in communities across our state,” Pritzker said.
That’s this year, and Pritzker sure seems to love the electric slide. But he flips the switch so often – electric vehicles, gerrymandering, school masking as a local decision – that no one should be shocked if he changes his moves.
“Boogie woogie woogie.”
Brad Weisenstein is managing editor for the Illinois Policy Institute, a nonpartisan research organization.