Are Illinois taxes Indiana's gain?

The Indiana Economic Development Corp. has created a website that seeks to capitalize on fallout from the corporate and personal income tax hikes Illinois Gov. Pat Quinn signed into law Jan. 12.

"Illinnoyed?" the new website, www.solutionindiana.com, asks. Then answers, "You Should Be." It also includes a brief description extolling the benefits of operating in Indiana, links to the IEDC's main page as well as news reports, and contact information.

The Internet spot was "part of the effort to tell people in Illinois that Indiana is a vastly better place to invest personal and financial capital," said Mitch Roob, Indiana Secretary of Commerce.

In an early morning vote, the lame duck session of the Illinois General Assembly raised taxes to help clean up the red ink and balance the state's 2011 budget. Since the increase, Indiana and Wisconsin have announced aggressive campaigns to lure companies and individuals across state lines.

Illinois Gov. Pat Quinn's office shrugged off Indiana's new website.

"Gov. Quinn believes in regional cooperation, not recrimination," said spokeswoman Brie Callahan. "Gov. Quinn is not focusing on rhetoric. He's focused on moving the state forward."

Hiking taxes will help the state get its financial house in order which will create a stable climate and attract businesses, she said. About a week after Quinn signed the tax increase into law, the state welcomed the decisions by steel producer Evraz and Becker Iron & Metal, Inc., to relocate to the Land of Lincoln.

Illinois is the hub for research and transportation along with being a financial center, Callahan said. A strong Illinois benefits the Midwest since the states in the region are competing not just against other parts of the United States but against other countries for businesses.

Roob disputed that assessment. Indiana is connected geographically and linguistically to Illinois and tax hike sends a bad message about the Midwest, he said. Companies get the impression that all the states in the region have high tax rates.

Consequently, the website, he said, is just part of the Hoosier effort to try to make lemonade out of the lemons Illinois made for the entire Midwest.

The blatant courting of businesses and even Indiana Gov. Mitch Daniels' characterizing Illinois as the "dysfunctional family next door" may put Indiana in an uncomfortable position at the next Midwestern Governors Association gathering. Quinn has been named the chair of that organization which includes Indiana, Wisconsin, Michigan, Ohio and Iowa.

Roob said Indiana's campaign and remarks have not smeared the Illinois governor personally.

"I know Pat Quinn," Roob said. "Pat Quinn is a moral and ethical human being. He has a different view of how to incentivize investment."