The Illinois House has approved a four-month extension of a corporate tax incentive program amid an ongoing budget standoff.
The Economic Development for a Growing Economy, or EDGE, program was set to expire at the end of last year. It offers businesses tax breaks in exchange for agreements on creating and maintaining jobs.
The House approved an extension 101-12 Tuesday. If approved, it will sunset in April. The measure now heads to the state Senate.
Some lawmakers argue the program needs an overhaul because it benefits larger companies over smaller ones. Bill sponsor Majority Leader Barbara Flynn Currie says short-term extension is the way to go.
It’s not often explained, but the credit for capital investment and job creation is applied to the state income tax withheld by a company from the new workers added under the program. Companies often don’t pay much state corporate income tax, so this is a way to give them money that would’ve otherwise gone to state coffers.
The Senate also approved the bill today on a 48-7 roll call. The governor has yet to say what he plans to do.
Authority to offer such incentives had automatically sunsetted Jan. 1, caught amid the continuous battles in the capital over terms for adopting a fiscal 2018 state budget and fully funding all programs in this year.
Both Democrats and Republicans say they want changes in the Edge program, the state’s largest and by many accounts most effective tool in getting companies to move and expand here. For instance, Sen. Pam Althoff, R-Crystal Lake, and Melissa Bush, D-Grayslake, are sponsoring legislation cut the size of Edge incentives and limit them to net versus retained positions.
Bush referenced that in floor debate today, saying the temporary extension “says to business, ‘We’re open for business,”‘ but that she will continue to work “to get a good (permanent) bill later.”
Of course, putting off the day of decision until April 30 puts one more item on the table for House Speaker Mike Madigan and Rauner to fight about this spring.