Housing and Economic Development – Eliminate the Subsidy to World Business Chicago

Savings: $1.4 million

World Business Chicago (WBC) “is the city’s economic development office, coordinating business retention, attraction and expansion efforts in order to spur and accelerate economic growth.”[1]  WBC assists businesses with site selection decisions by providing economic and industry data and helping businesses obtain state and local financial incentives.  Additionally, WBC markets Chicago as a business-friendly City around the world.

Under this option, the City would eliminate the subsidy to WBC, saving $1.4 million. As the City’s subsidy makes up the bulk of WBC’s funding, the subsidy’s elimination may result in a much smaller WBC and could even cause the organization to cease operating.

Proponents might argue that the City should not fund the services that WBC provides. Helping individual companies, including large, multinational corporations, obtain government benefits should be funded by the individual firms themselves. Additionally, the WBC Board of Directors is mostly comprised of leaders of the City’s largest corporations. Giving these individuals authority over how public dollars are used to assist other firms may not be the best use of taxpayer dollars as these individuals have an incentive, and in some instances possibly a duty to their respective shareholders, to direct assistance to firms that will not directly compete with their own companies. This, in turn, may not be in the City’s economic development interest.[2] Lastly, some would argue that there is little accountability because it is difficult to determine what results the City receives by subsidizing WBC. Opponents might argue that spending this relatively small amount of money to attract companies to Chicago more than pays for itself. If WBC’s efforts attract even a few new businesses to Chicago each year, the economic activity generated by these businesses will likely outweigh the costs of the subsidy to WBC.

Budget Details

Dept: Finance General, 099 Bureau:  NA
Fund:  Corporate Fund, 0100 Approp Code: For World Business Chicago Program, 9180
The appropriation is located on page 255 of the 2011Annual Appropriation Ordinance.

http://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/2011BudgetOrdinance.pdf

 

 

 


[1] World Business Chicago. “About.”

http://www.worldbusinesschicago.com/about

[2] City of Chicago. Office of Inspector General. “Review of World Business Chicago and the TIF Approval Process.” July 25, 2011.

http://chicagoinspectorgeneral.org/publications-and-press/press-releases/review-of-world-business-chicago-and-the-tif-approval-process/