Environment, big industries, bad actors, and pollution are topics that have been discussed heavily in Chicago. However, the city authorities seem to be impractical in their actions. The City Council approved an ordinance to create a legal framework for the city to revoke tax incentives awarded to the so-called “bad actors,” but this concept was entirely untoward and untenable. Without comprehending the repercussions of punitive ordinances or other possible measures to tackle the issue, they will only fail in this attempt at environmental reform.
In an already tough economic situation, where industries are facing massive setbacks and zero government help, imposing more taxes or shunning tax incentives is just going to further damage their productivity and efficiency. This measure doesn't seem to be well-timed or feasible. It will not have any effect on Hilco for their 2020 demolition debacle, so it seems to serve little point at this time. Revoking property tax rebates punishes the developers that are found violating the state, federal, or environmental laws. Environmental advocates have not been very impressed with the tax revocation scheme, though. It aims to stymie irresponsible developers from negatively affecting the environment in surrounding communities, but it will have far reaching implications that might incur adverse impact on several other companies.
In his journal article, The Chicago Plan: Incentive Zoning and the Preservation of Urban Landmarks, Professor John J. Costonis perfectly explained the ineffectiveness of similar legal measures in preserving the environment and architectural landmarks. His article states that such measures are ineffective on the economic and legal perspectives, and more comprehensive zoning measures would be ideal. In their article The economics of zoning, John F. Mcdonald and Daniel P. Mcmillen of the University of Illinois at Chicago maintain that effective zoning is one of the best tactics for achieving a positive city-wide outcome. They write that “land-use zoning directly increases property values by restricting the supply of land to certain uses and by removing harmful nonconforming uses.” The studies referenced are vivid empirical examples that more effective zoning in Chicago can be more lucrative than any strict legal measure to curb tax incentives for companies.
Furthermore, there are hundreds of other studies supporting that the tax incentives play a favorable role in the development of any business enterprise and overall economic growth. Though there might be slight revenue loss for the government, the employment opportunities created and the positive externalities incur far greater impact overall.
The tax incentives are pivotal in making progress as far as the development of companies. The measures help companies take on complex and challenging projects that will bring advancement to the overall economy and society. There are several renowned examples in the world that show the benefits created by providing ease to companies are far greater than possible adverse impacts. Singapore and Hongkong are perfect examples in that regard.
The great city of Chicago has already witnessed a notable decline in its historical manufacturing base. We have also seen how the closure of many giant steel companies in the past has furthered the economic plight of the south and southeast sides. Implementing severe punishing measures targeting the industries cannot be a prolific step when we take the bleak past into consideration. There are already several zoning regulations to protect public welfare from the adverse effects of industrialization and rapid and dense urbanization, and revamping such regulatory steps will be a more equitable solution.
It is good to see that the authorities are considering the impact private investments have on the health of people and the environment, but imposing punitive measures is not the solution. This is going to negatively impact the economic development of the region and incur adverse impacts on the potential of companies, new business ideas, and opportunities. The more feasible and pragmatic step would be to create more effective zoning.
