Editorial: Even small projects merit breaks, if ...

The village of Fox Lake recently approved $150,000 in tax incentives for a Thornton’s gas station. Buffalo Grove is looking at tax incentives for a Fresh Farms grocery market. Barrington gave incentives in order to land a hardware store.

Tax breaks. They’re not just for major projects anymore.

It’s interesting, to say the least, to see the lengths to which communities will go in troubled times to fill their business space.

The tax district established this week in Palatine to channel development incentives to a multimillion-dollar automobile dealership and the accommodations made recently for a similar project in Arlington Heights are more familiar examples of the lengths to which communities go to compete for and encourage tax-producing commercial franchises. But, as they say, desperate times ...

That considered, it’s easy to understand and support towns which, assuming they’ve done their homework carefully, see a small tax break as an investment toward a brighter revenue picture, though it’s also easy to see how that impulse can be carried too far.

How, for example, can a town withhold from one hardware store that which is given to another — or even from one retailer that which is given to one hardware store? And the logical conclusion of such a process is a nightmarish collection of development deals. Towns also must be mindful of the risks in competing against each other to woo a business that could benefit only the business and make all the suitors losers.

All this not to mention the question of whether the tax dollars spent to lure a business aren’t better described as surrendered than invested.

Indeed, the city of Elgin this year has moved away from a practice of offering cash incentives for businesses that locate or expand there — though that hasn’t prevented the city from promising other incentives, such as fast-track permitting and fee waivers, for projects as diverse as a new fast-food restaurant and the expansion of an enzyme manufacturer already headquartered in town.

It is excessively pessimistic to consider this trend a slippery slope. But so is it excessively optimistic to welcome it as the new way for communities to nurture a strong foundation of business and industry. In the current economic environment, any arrangement that produces even a single dollar of net gain cannot but seem attractive. But let’s not forget — even as we fervently hope — that the current economic environment will not last forever. And in any environment, there always will be a danger of diminishing returns from an approach to inducing development that grows overly enthusiastic.

So, hurrah for towns that are managing to foster and lure commercial growth of whatever size or scope. They should just be careful along the way to avoid the ever-present temptation that can end up with them, in a manner of speaking, giving away the store.