* The state’s EDGE tax credit program for expanding or relocating businesses is expiring at the end of April, so some replacements are being mulled. Here’s Greg Hinz…
One measure pushed by the Illinois Chamber of Commerce would both rein in and expand the program.
Sponsored by Rep. Michael Zalewski, D-Chicago, the measure would cap credits at $50 million a year statewide and limit them to five years for any given project, down from 10 years now.
But instead of employers negotiating a cut in their income-tax liability, they’d get a cut worth 10 percent of wages of newly hired or retained slots. That credit would rise by half if the jobs were located in high-poverty, high-unemployment communities. And the credit would be made permanent, rather than having to be renewed every five years. […]
An alternative version offered by Sens. Pam Althoff, R-Crystal Lake, and Melissa Bush, D-Grayslake, would limit the credits to net new hires and allow them to be collected over a 10-year period—15 years in the case of facilities located in poor communities.
* The Althoff bill renames the program to THRIVE. WAND TV…
A House committee heard from the Department of Commerce and Economic Opportunity on their support for the Transforming, Helping and Reviving Illinois’ Versatile Economy program, or THRIVE. According to Sean McCarthy, Director of the Department of Commerce and Economic Opportunity, This program is an update to the Economic Development for a Growing Economy, or EDGE program.
Under THRIVE businesses would still be given a tax credit incentive for job creation. THRIVE would also change the Illinois tax withholding for jobs creation from 100 percent under EDGE to half that, at 50 percent.
THRIVE would also allow for businesses of all sizes to be eligible for this tax credit. “The eligibility threshold is modified so small businesses have a greater access to the program.THRIVE provides that any company regardless of the size has easier access to the incentive” said McCarthy. “So for example the current EDGE program you have a requirement of 25 jobs and a capitol investment of $5 million. In THRIVE the eligibility is 10 percent of the global workforce or 50 jobs, whatever is lesser.”
THRIVE would also redefine the “But, for” clause that is current in EDGE. This would end the practice of companies seeking incentive offers from other states, while still requiring businesses to submit a case for why the incentive is needed.
* From the Illinois Policy Institute’s news service…
State Rep. David McSweeney, R-Barrington, questioned the propriety of the state singling out businesses for tax breaks.
“Why should the state of Illinois pick winners and losers? Why not keep tax rates relatively low?” McSweeney asked, while suggesting Illinois get rid of the credit process and create a deduction for a corporation’s portion of its Illinois net income earned as a result of a manufacturing process.
House Majority Leady Barbara Flynn Currie questioned McCarthy on how the state ensures that they’re giving credits to create jobs, not as political favors.
“If we are going to create special incentives, we want to make sure that there was a reason to do it, not just glad-handing,” she said.
* State’s EDGE tax-credit deals with Amazon, other firms now viewable online