* Power Construction is moving from Schaumburg to Chicago (15 miles, according to Google) and is getting $2.4 million in state assistance over ten years. That naturally prompted questions…
Dan Seals, the former congressional candidate now serving as assistant director of the Ill. Department of Commerce and Economic Opportunity, was asked how he justifies giving a tax break to an Illinois company to move a short distance from suburb to city.
“We didn’t give a company a tax credit to move a few miles. What we did is saw a company that we thought was a good company that was looking to leave the state entirely that was receiving several million dollars to come to another state. We wanted to compete. We thought it was a good company to retain. And that’s what we did. And we won,” Seals said.
“You only get [the state aid] if you create the jobs. If you don’t create the jobs, you don’t get `em. And they’re based on the tax revenue that comes off the job. So, the state comes out ahead.”
Power got an EDGE tax credit. About the EDGE credit…
The EDGE program is designed to offer a special tax incentive to encourage companies to locate or expand operations in Illinois when there is active consideration of a competing location in another State.
The program can provide tax credits to qualifying companies, equal to the amount of state income taxes withheld from the salaries of employees in the newly created jobs. The non- refundable credits can be used against corporate income taxes to be paid over a period not to exceed 10 years.
To qualify a company must provide documentation that attests to the fact of competition among a competing state, and agree to make an investment of at least $5 million in capital improvements and create a minimum of 25 new full time jobs in Illinois.
In other words, if a company is being lured by another state and they’re willing to create some new jobs, the state can let them use their employees’ state withholding taxes to lower their corporate income tax bill. Power says it will create 30 new jobs.
Still, it would be nice to know what state was competing with us and how much they were offering.