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* State Rep. Mike Zalewski (D-Riverside) Mark Denzler, vice president and COO of the Illinois Manufacturers’ Association and Bill Gibson, Illinois state director at Great Lakes Graphics Association wrote this on behalf of the AIM Coalition…
Illinois is home to more than 450 corporate research and development facilities, yet businesses watched the R&D credit renew and expire four different times over the last 13 years. Imagine how hard it must be for a business to invest and spend in Illinois with the uncertainty of our tax environment.
Companies plan their R&D investment 5, 10 or even 20 years in advance and the present on again/off again cycle is one we need to break. Further, the absence of a permanent policy is driving R&D investments to neighboring states taking those good, high paying jobs averaging salaries of $80,000 with them. We are seeing this migration more frequently as new agricultural implement research expands in Iowa and as companies remain headquartered in Illinois, but choose to manufacture and develop product across state lines.
Or in the case of the commercial printing industry, Illinois is the only state in the nation without an incentive for commercial printers engaged in manufacturing activity. Yes, once again we’re at the bottom. The graphic arts exemption expired at a time when the industry employed 55,100 workers in more than 2,300 facilities. Quite simply, that industry’s livelihood is dependent upon this incentive encouraging businesses to invest in higher quality, more technologically advanced printing and graphic arts equipment.
An opportunity exists with bipartisan support to rally around legislation that backs the modern and permanent extensions of four critical tax incentives including:
posted by Rich Miller
Monday, Apr 25, 16 @ 8:59 am
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Special tax breaks and uncontrolled spending… Stop it!
Comment by Critic Monday, Apr 25, 16 @ 9:15 am
Critic, myopia isn’t healthy. Look at Kansas for an extreme example of the other side of your extremist coin.
Comment by Rich Miller Monday, Apr 25, 16 @ 9:20 am
So here is my problem with this type of corporate welfare. When we have had these tax incentives and even ones like Enterprize Zones which include utility tax exemption, why haven’t we seen an increase in manufacturing jobs? We’ve given massive incentives, millions of dollars, we’ve prevented millions of dollars of revenue from supporting out state and what have we gotten? Corporate profits (especially large corporations which take advantage of these) are up. Cash gets put offshore into tax havens and we are supposed to consider giving greater incentives? Well sure, we’ll consider them but I have to tell you, I have no idea what we have gotten in return for the starvation of our states’ revenue. Sure the jobs they could provided are high paying. But does anyone ever check to see that those promised jobs ever appeared as promised. I know the answer. I think you can guess.
So it might be a good idea, but you know what? In today’s environment show me the jobs first Manufacturing sector and then we’ll help you out. And don’t say you can’t afford it. Dip into your Caymans island fund to pay for it. I’m not talking by the way about small manufacturers. Give them anything they want and I mean everything. I’m talking about the big boys that demand these incentives then blackmail the state by saying they will leave.
Comment by Honeybear Monday, Apr 25, 16 @ 9:42 am
End the tax exemption for services. That would spread the tax burden out more reasonably, and require less reliance on manufacturing to carry the tax burden. In Illinois, I pay more Illinois tax to patch my bicycle tire than Ty Fahner pays to have his yacht cleaned.
Comment by Qui Tam Monday, Apr 25, 16 @ 9:52 am
1. Sunset all corporate tax expenditures in Illinois as of 2018.
2. Cap the amount of tax expenditures we are going to provide moving forward, and apply the balance to a reduction in the sales tax.
3. Let the advocates for all of the tax expenditures go before the General Assembly and make the case why their industry should receive a tax incentive instead of the other industries.
4. Have an up or down vote on the entire package, with a sunset in another ten years.
Comment by Juvenal Monday, Apr 25, 16 @ 10:00 am
talk talk talk. run the bill.
i support these tax breaks. they bring in taxpayers who pay inc tax and buy goods and services. if a company with high paying jobs never pays a dime in taxes its a win win. no tax breaks for low wage companies.
Comment by Ghost Monday, Apr 25, 16 @ 10:16 am
Ok with me. But most of our problems in manufacturing are federal policy failures
Comment by illinois manufacturer Monday, Apr 25, 16 @ 10:34 am
At least these tax breaks will bring in HIGH PAID jobs. That’s a lot better then the huge tax break incentives given to Big Boxes that create MINIMUM WAGE jobs.
Comment by DuPage Monday, Apr 25, 16 @ 10:40 am
=== Let the advocates for all of the tax expenditures go before the General Assembly and make the case why their industry should receive a tax incentive instead of the other industries.===
You ignore the fact that pretty much all of these incentives have passed and been renewed on highly lopsided roll calls. Many of them work well. Not to say that some adjustments can’t be made, but don’t ignore the obvious here.
Comment by Rich Miller Monday, Apr 25, 16 @ 10:47 am
–Or in the case of the commercial printing industry, Illinois is the only state in the nation without an incentive for commercial printers engaged in manufacturing activity.–
Illinois also is the only state with the largest commercial printer in the country: R.R. Donnelly, more than twice as large as its nearest competitor.
So…. what’s their deal, then?
I’m willing to hear more, but they haven’t sold it yet.
Perhaps some success stories/testimonials on the ROI of the tax credit would be in order.
List of largest commercial printers.
http://www.piworld.com/article/the-2015-printing-impressions-400/
Comment by wordslinger Monday, Apr 25, 16 @ 10:55 am
As a liberal, I like the idea of research and development credits, just like I like the idea that education is an *investment* and not something you have to have a seaprate income stream for like you’re buying something off the shelf.
With education, however, I can pretty see the benefits of that investment. With research and development, someone’s going to have to give me some specifics.
Comment by Cheswick Monday, Apr 25, 16 @ 11:09 am
== Perhaps some success stories/testimonials on the ROI of the tax credit would be in order. ==
That’s what I was trying to say. Thanks, Word.
Comment by Cheswick Monday, Apr 25, 16 @ 11:11 am
Commercial printing is in long term decline due to technology change many smal ones have gone. It’s usually a small scale business. I owned one once. It makes up the largest number of manufacturing enterprises in Illinois. But from large to small I must say it is not a sector I would go into. I am busy in my own declining sector. I do have a growth niche but I don’t see where that is in printing. Donnelly big customer was phone books.
Comment by illinois manufacturer Monday, Apr 25, 16 @ 11:31 am
Ideas and discussion are very good right now. I maintain that the best thing for business we can do is get to a balanced, stable budget. This may be a good to do, but it’s got to be a part of a larger discussion. In isolation, a tax cut to stimulate business is an easy choice. So are services to people with disabilities. It’s the piecemeal approach doing things that are relatively popular that has gotten us to where we are over the decades.
Comment by Earnest Monday, Apr 25, 16 @ 11:32 am
R & D is vital to high tech, advanced manufacturing, pharmaceutical, and other sectors that IL is trying to attract. To get the credit, the R & D has to be performed in IL (Illinois jobs) by folks that average nearly $100,000 per year.
Comment by 4 percent Monday, Apr 25, 16 @ 11:35 am
So without a tax incentive these corporations won’t invest in R&D??? That’s their problem. Doesn’t sound like a good business plan to me. If the State is going to invest in these companies the taxpayers are going to need something a little more substantial than promises of jobs to come. A share of ownership comes to mind… But… But… That’s socialism!!! Exactly! Corporate tax incentives are socialistic, as well. Taxpayers should share in part of any gain if we are going to shoulder part of the pain… Something else… Have these proponents ever heard of the phrase, cost of doing business?
Comment by Triple fat Monday, Apr 25, 16 @ 12:26 pm
= Quite simply, that industry’s livelihood is dependent upon this incentive =
A mature industry should NOT be dependent upon government incentives, period. When would taxpayer support ever end?
Comment by cover Monday, Apr 25, 16 @ 4:12 pm
Is cat a mature industry? Is the export import bank a government incentive?
Comment by illinois manufacturer Monday, Apr 25, 16 @ 8:54 pm