Economic Development

Fulfilling a campaign promise, Edgar listened to the recommendations of the business community, labor and education and then dramatically retooled and re-energized DCCA. DCCA’s mission was given a sharper focus. It would concentrate on improving education and infrastructure, boosting tourism, helping businesses take advantage of new technology, upgrading the quality of the workforce, emphasizing export assistance over incentives for attracting new business, promoting small business development and growth, and spreading the word for Illinois businesses.

Crain’s Chicago Business called the revamp “well-focused, carefully considered and sensible.”

In 1993, the National Governors’ Association sup- ported an initiative by Edgar to de-escalate wholesale bidding wars between states for new industries and businesses. It reflected recommendations from some of the nation’s leading businesses and governors who believed there was a better use for limited resources than glitzy incentive packages that did not always prove to be cost-effective.

The results of Edgar’s sensible business approach were apparent. Illinois’ economy was never stronger and unemployment rates dropped from 7.2 percent in 1991 to 3.9 percent in 1998, a rate that had not been seen since the early 1970s. More Illinoisans than ever before were working, up 600,000 to a total of 6 million during the Governor’s tenure.

“Illinois has changed the way Illinois does business and Illinois is becoming economically stronger. By investing in our infrastructure, by helping companies train and retrain their workers for retooled assembly lines, by strategically targeting our assistance, state government is helping Illinois companies maintain their competitive edge and grow here,” the Governor said in his 1994 State of the State address.

Besides Motorola, Maytag and Abbott, there were numerous other business success stories that created or retained tens of thousands of Illinois jobs:

• Through job training funds and establishing an enterprise zone, the state worked to keep Nabisco Company – the world’s largest bakery – in Chicago where it invested nearly a half billion dollars in a modern new plant for 2,400 workers.
• Chrysler Corporation, assisted by state job training funds, demonstrated its confidence in the Illinois economy by investing $500 million to retool its assembly plant in Belvidere for the production of the new Neon.
• Lucent Technologies, a leading designer of communi- cations systems, software and microelectronic com- ponents, after considering several states, chose to spend more than $600 million for two new research and development buildings in Lisle employing 2,000. Illinois provided training funds and tax credits. Training grants and enterprise zone benefits enabled Tootsie Roll, the long-time Chicago manufacturer, to undertake a $131 million expansion of its plant on the city’s southwest side, saving 800 jobs and creating 100 new ones.
• Nestle, with a commitment from the state for needed highway improvements, built the largest facility in Illinois in 1993, a new distribution center in DeKalb to serve an 11-state region.
• In Granite City, money for job training helped con- vince American Steel Foundries to reopen a plant that had been closed for a year, creating more than 1,200 jobs.
• CrownLine Boats Inc. expanded in West Frankfort, retaining 250 jobs and creating 150 new ones with the help of a state loan and infrastructure capital.
• A grant to train workers helped convince Honeywell’s Micro Switch Division, Freeport’s largest employer, to invest $30 million in its operation, adding manufacturing space and solidifying jobs of 3,000 workers.
• Continental General Tire of Mount Vernon undertook a $40 million expansion, creating 150 new jobs, assisted by state training money and a loan.
• Alcoa considered five Midwestern states before deciding on Danville as the site of a new $48 million automotive sheet finishing operation. Alcoa officials pointed to the community’s educational facilities and “strong sense of family values.”

One of Edgar’s biggest coups was convincing the U.S. Department of Defense’s Base Closure and Realignment Commission to retain and expand the Great Lakes Naval Training Center in Lake County, preserving 8,000 jobs and adding 9,000 others, the biggest job gain at any one site in the nation in 1993. The Governor testified before the commission and pledged support from the state, companies and communities. In announcing the Great Lakes decision, commission Chairman Jim Courter said the state’s effort to retain the base should serve as a model for other states.

Edgar also was instrumental in influencing Congress to approve the North American Free Trade

Agreement, which spurred Illinois exports of grain, processed food, construction and telecommunications equipment, and other products to Canada and Mexico, the state’s first and third largest trading partners. The yield: $8 billion in new business.

Overall, Illinois exports grew at a rate twice the national average. Direct exports grew by 14 percent a year during the 1990s, four times the rate of growth in the previous decade. Through trade missions to Asia, Europe, India, Latin America, the Middle East and Canada, Edgar helped Illinois exports to grow by 124 percent during his two terms and to support more than 625,000 jobs.

The state’s Industrial Training Program was an essen- tial component in many of the business retention and expansion projects. This program ensured that the state’s workforce was ready and able to master dramatically changing technology and trained nearly 200,000 people. Edgar earmarked $111 million in training grants for individual companies, as well as intermediary organizations that offered instruction to meet the common needs of multiple companies.

“Our goal is to help Illinois workers develop skills second to none in the world,” Edgar said in announcing training grants in 1998. Included was $400,000 to Caterpillar to train 1,500 workers at 66 of its Illinois suppliers to improve the quality of goods produced. Due to the giant earth moving company’s commitment to modernization, including new technology, work processes and ways of thinking, the suppliers needed instruction in design, assembly, blueprint reading, casting and forging.

DCCA also established 54 “one-stop” career centers throughout the state that use the latest in computer and telecommunications technology to assist workers with registering for training, providing resources for conduct- ing job searches, developing resumes, one-on-one career counseling and filing for unemployment insurance all under one roof.

For those who needed specialized training to land a job, pursue a career or find a new job after layoff, Edgar expanded a job training partnership program. Nearly 150,000 dislocated workers and 200,000 disadvantaged workers enrolled.

With technology businesses leading the nation’s economic surge, the Governor made sure Illinois kept apace. Two-thirds of the nation’s research and development activity occurred in 10 states, with Illinois in seventh place.

Edgar helped Illinois’ ranking in 1994 when he committed state funds to help launch the $800 million Advanced Photon Source at Argonne National Laboratory. The project, completed in 1996, produces the most powerful beam of X-rays ever available for research in materials science, physics, biotechnology and medicine. The investment meant 1,500 construction-related jobs and hundreds of permanent jobs at Argonne and at high- tech firms that use the facility to develop new products.

He also added nearly $1 million in state funding to a $10.6 million grant from the National Science Foundation to establish a Magnetic Resonance Technology Center for Biological Research at the University of Illinois at Urbana-Champaign. The center develops the world’s most advanced magnetic resonance imaging instrumentation for researching living organisms, individual cells, animals and humans, and applying technology to solve problems in life sciences.

In 1997 alone, Illinois’ institutions of higher educa- tion received more than $900 million in federal research money to bolster the state’s stature as a world leader in science and technology.

By 1998, the American Electronics Association ranked the Chicago area third in the nation in high-tech jobs, behind San Jose, Calif., and Boston. And Newsweek, in November 1998, called Champaign-Urbana one of the nation’s “hottest tech cities,” chiefly because of the National Center for Supercomputing Applications that was established at the University of Illinois. Illinois’ center has more supercomputing power than any other university in the United States. It was on the Illinois campus that the Mosaic browser, which provided the software technology to make the World Wide Web accessible to everyone, was developed.

For small and medium-sized businesses, the backbone of Illinois’ economy with more than 5 million employees, the state forged a partnership with community colleges, universities and laboratories to assure they have access to world-class technical talent offering advice on technology, markets and improved productivity.

Illinois also developed the Illinois Small Business Development Center network, helping almost 130,000 entrepreneurs with start-up advice, management and financial packaging. The state assisted small business with environmental compliance and established centers that provided information on licensing and regulatory laws covering all state agencies.

Edgar implemented the Illinois Capital Access Program in 1997 for new and small businesses, many of them owned by women, minorities or individuals with disabilities, not qualifying for conventional loans. In its first year, more than 100 businesses, each with fewer than 500 employees, received short- and long-term loans from private banks that were backed by contributions from the borrower and DCCA.

One of the state’s best economic development tools was the Community Development Assistance Program (CDAP). It provided $350 million in grants to communities with populations of 50,000 or less that do not receive funds directly from the federal government for water and sewer system improvements, upgrades to housing and public buildings, helping businesses locate or expand, and disaster relief from tornadoes, severe winds and floods.

By investing CDAP funds in com- munity and business infrastructure improvements in partnership with local governments, Edgar was able to retain or create thousands of small business jobs. Simonton Windows spent $5 million to expand its manu- facturing facility in Paris and create 175 jobs after the state provided $500,000 for a new water tower and water lines to serve the company. Wal-Mart Stores Inc., assisted by a $640,000 state grant that extended water and sewer lines, opened a Midwestern distribution center in Olney that resulted in 250 new jobs. A CDAP loan was used by E.R. Moore Co., the makers of graduation caps and gowns, to buy new equipment for a $1.2 million plant expansion in Newton that resulted in 40 jobs. Rowe Foundry, Martinsville’s old- est and largest business, used a $500,000 state grant to upgrade its production line with state-of-the-art molding equipment, retaining more than 100 jobs. C.J. Vitner Company of Freeport, maker of potato and corn chip products, undertook a $3.7 million expansion, creating 80 new jobs, after the state provided a $500,000 grant to con- struct a wastewater pretreatment plant.

As part of Edgar’s efforts to improve business climate, the Governor signed legislation in 1996, which he proposed in his State of the State address, to reduce unemployment insurance taxes paid by companies to underwrite benefits to unemployed workers. The legislation saved Illinois businesses an average of 18 percent the first year, or a quarter billion dollars. The Governor’s plan reflected the state’s jobless rate, which dipped to its lowest level since the early 1970s.

Another step toward Illinois becoming a job-friendly, competitive environment for business occurred in 1997 when the Edgar administration drew up consensus legis- lation for deregulation of the electric utility industry.

Effective in 1998, the new law promotes competition and will save Illinois businesses and families about $640 million on electric service costs the first full year. Rates to Commonwealth Edison and Illinois Power customers dropped 15 percent on Aug. 1, 1998, and will drop another 5 percent in 2002.

During the Edgar administration, the state worked diligently for the quality of life of all Illinoisans. Nearly $150 million assisted 4 million people through loans to businesses that hire low-income workers and promote their further education. DCCA also utilized almost $600 million to assist 1.7 million citizens in paying their winter energy bills and $140 million for weatherizing homes of low-income people.