By Greg Bishop/Illinois Radio Network
SPRINGFIELD – Regardless of signing a new law for giving businesses tax incentives to set up or expand their operations in Illinois, Gov. Bruce Rauner said the state can do better.
Fresh off an overseas economic mission trip to Asia, Rauner signed the update to the Economic Development for a Growing Economy, or EDGE, tax credit. He said the update overhauls the state’s controversial program, but not everyone is convinced.
The previous EDGE program expired in April. Rauner said the updates he signed give a credit to certain businesses that create and maintain jobs.
“The company gets a tax credit for the income tax the employee pays in,” Rauner said. “It’s a nice incentive to grow more jobs.”
Rauner said the updates to the controversial EDGE tax credit program make the bill better.
However, state Rep. Jeanne Ives, R-Wheaton, said it falls short for all businesses.
“Businesses are concerned about their workers’ comp rates,” Ives said. “They’re concerned about their tax rate, they’re concerned about their property taxes. They’re concerned about providing a really good quality of life for their employees, and when you’re taxing people out of their homes, you’re not providing quality of life.”
The new law makes businesses with fewer than 100 employees eligible for the program. For businesses with more than 100 employees, the new law requires at least $2.5 million, not $5 million, in capital improvements within Illinois.
It will also incentivize companies to set up in economically disadvantaged parts of the state and Rauner said it is also more transparent. The transparency provisions require the deal to be posted 10 days after it’s finalized, including the name, location, estimated value of the credit, the number of new and retained jobs and whether it’s in an underserved area.
The so-called clawback provision of the new law says if a business ceases principal operations with the intent to shut down the project in the state permanently during the term of the agreement the entire credit amount awarded shall be returned to the state.
State Sen. Melinda Bush, D-Grayslake, said “that money will go into the workforce development budget so that we can actually continue to develop our workforce.”
There are also diversity goals and reports required. Businesses taking part in the program must submit to the state reports about what percentage of the total work performed by and actual spending on female-owned, minority-owned, veteran-owned and small business enterprises they’ve utilized in the previous year. The required reports include an outline of their procurement process, plans to increase the use of minority vendors, explanation of challenges and success stories.
Ives said the state should instead cut taxes for every business and not require a labor-intensive application process that is still subjective and not fair across the board. She also said the state needs to invest in infrastructure to lure business.
Rauner said the updated EDGE program adds to the state’s many benefits, such as its workforce and infrastructure.
“We’ve got a lot to sell,” Rauner said. “If we could get our regulations competitive, if we could get our tax code competitive, we could be the No. 1 growing state in America.”
The updated EDGE program replaces the one that expired in April and now lasts until 2022.
