ELKHART -- James Hamilton, president of Colbert Packaging, is "furious" over the decision by the Illinois legislature to increase the state's taxes.
But is he angry enough to move?
The businessman has his company headquarters in Lake Forest, Ill., and other operations in Louisville, Ky., and Elkhart. He often receives calls from economic development professionals in Kentucky, West Virginia and Virginia, trying to convince him to relocate.
Now, since the Illinois General Assembly has voted to raise the state's personal income tax rate to 5 percent from 3 percent and the corporate tax level to 9.5 percent from 7.3 percent, Indiana and Wisconsin might make personal visits.
Hamilton said in the future he would consider making new investments elsewhere but actually shutting down plants, packing up offices and heading for the state line?
Probably not.
"To move is a big deal," he said.
Indiana Gov. Mitch Daniels and Indiana Economic Development Corp. chief executive officer Mitch Roob have not been shy about poking their neighbor over the pre-dawn tax vote and about discussing plans to actively recruit Illinois companies.
In an interview with The Elkhart Truth, Roob characterized Illinois' decision as "stupid" and during an conversation on a Chicago radio station, Daniels compared the Land of Lincoln to "the dysfunctional family down the block."
Rather than kicking a neighbor when he is down, Indiana and other states surrounding Illinois should be collaborating with their Great Lakes colleague and trying to help him get in better fiscal shape, said Ed Morrison, economic policy advisor at Purdue Center for Regional Development.
A differential tax rate increase of 2 percent will not greatly impact a corporation's profits, Morrison said. Moreover states competing over taxes is futile and detrimental to the region's economy.
He advised that communities in the Great Lakes states should be encouraging local companies to generate "top line growth through innovation." In a global economy, states should be investing in training programs for workers and partnering with businesses so operations not only stay here but also develop new products, open new markets and increase exports.
"Indiana is not different than Illinois," Morrison said. "Ohio is no different than Indiana. We're all in the same boat in terms of global competition."
The tax hike does not have CTB Inc. in Milford regretting its December acquisition of Shore Sales of Illinois Inc.
Tom Lippi, vice president of business and technology development, described the Illinois increase as "fairly small" in light of all the taxes the international manufacturer of agriculture equipment pays.
Also, as with Colbert Packaging, moving Shore Sales is not likely to happen because the employees are very rooted in that community and the customer base of farmers and grain elevators is located there.
"It just doesn't make good sense to move a company," Lippi said.
Dorinda Heiden-Guss, president of the Economic Development Corp. of Elkhart County, conceded taxes are only part of the equation when companies think about pulling up stakes. Labor issues, overhead, proximity to customers and quality of life are all considered.
Still the higher tax rate could set economic growth in Illinois back 10 or 20 years, she said. Although businesses might not leave, they could choose to spend their dollars on investments outside of the state.
Hamilton concurred, saying any possible expansions and new equipment might go to the Elkhart operation instead of the plants in Illinois. He noted Illinois is ranked 48th in the U.S. for job creation and he expects the new tax rates will pushed the state into last place.
"I'm sure there's going to be fallout," he said.