|
 With the stroke of a pen, Gov. Bruce
Rauner has brought back a controversial and expensive corporate tax credit
program.
House Bill 162, made Public Act 100-0511 by Rauner’s signature on Sept. 18,
revives the Economic Development for a Growing Economy, or EDGE, tax credit
program and extends it until June 30, 2022.
EDGE expired April 30, 2017, though it had an original expiration date of Dec.
31, 2016. However, in January 2017, Rauner and the General Assembly brought back
the program for a brief, three-month term.
Since 2001, the Illinois Department of Commerce and Economic Opportunity, or
DCEO, has issued more than $1.4 billion worth of EDGE tax credits to select
companies.
 The new law makes some changes to EDGE, such as giving greater tax credits for
projects in underserved areas, and allowing certain EDGE applicants who have met
hiring goals under the program to get increased tax credits for retaining
employees.
Public Act 100-0511 limits credit awards to the lesser of 50 percent of the
incremental tax attributable to new workers plus 10 percent of new employee
training costs, or 100 percent of the incremental income tax attributable to new
employees at an EDGE applicant’s project.
In its 2016 report concerning EDGE, DCEO said that since 2001, the state awarded
$1.4 billion worth of EDGE credits in 859 agreements. DCEO also stated the
program had created 37,122 jobs as of Dec. 31, 2016.
[to top of second column] |
However, the big-picture results of this massive state investment
have been dubious, as Illinois’ jobs growth has been poor even with
EDGE in effect. Between June 2016 and June 2017, Illinois’ jobs
growth was 40 percent slower than the national average and slower
than all of Illinois’ neighboring states.
And in 2015, when EDGE was in effect the whole year, Illinois lost
56 manufacturing jobs per workday, even though the state was signing
EDGE deals left and right.
Beyond jobs numbers, it’s also difficult to argue EDGE has helped
the pocketbooks of average Illinoisans. From 2007 to 2016, Illinois
tied with Nevada for the worst personal income growth in the United
States.
Despite these results, EDGE remains a popular, bipartisan program at
the Statehouse. HB 162 passed the Illinois House of Representatives
on a 102-5 vote, and didn’t receive a single “no” vote in the
Senate.
If lawmakers want to see lasting jobs growth, they should look at
pro-growth policies such as workers’ compensation reform or
comprehensive property tax reform. Signing agreements with select
companies to hire and retain employees, one deal at a time, is no
way to sustainably grow a state economy.
Instead of favoring a chosen few, lawmakers should extend the logic
behind EDGE – that lower tax burdens drive jobs growth – to all
businesses in the state.
Click here to respond to the editor about this article |
