* Since many corporations pay little to no state taxes, a growing number are asking for EDGE credits, which allows the companies to pocket state withholding taxes. But that requires legislation for each deal, and that means legislators are put on the spot. So, at least one state legislator thinks the executive branch ought to be given the authority…
Sen. Thomas Cullerton, a Democrat from Villa Park, said the process needs to be made “more palatable” for corporations by ending the practice of executives publicly testifying on why they need the money. One possibility might be to give the department the authority to decide which companies can keep employee taxes if the companies have little or no state tax liability.
Chris Mooney, director of the Institute of Government and Public Affairs at the University of Illinois, said “corporate big shots” are not used to being peppered with questions when seeking tax breaks. “They are not happy about that,” Mooney said. “It’s sort of embarrassing for them.”
* The problem with Sen. Cullerton’s idea is the state’s economic development agency loves EDGE credits, while another agency says there’s no proof that they work overall…
“We have calculated that EDGE, over its history, has produced $8 in private investment for every $1 in credit,” [Dave Roeder, a spokesman with the Department of Commerce] said.
The state has pledged nearly $800 million in EDGE incentives since it was created in 1999.
A 2009 report by the Department of Revenue found that there is no reliable way to measure the impact of the tax incentives program on employment because it is unclear what the net effect of favoring certain firms and industries over others has been on the longer-term employment prospects of Illinois.
What do you think?