Pritzker defends IL's tax credits while MO looks to slash corporate rate

[April 11, 2024]  By Catrina Petersen | The Center Square

(The Center Square) – While Illinois looks at tax credits for gifting endowments, student loans, hiring journalists and music companies, Missouri is looking at phasing out not just tax credits but also their corporate income tax.

Not among the slew of tax credits the Illinois Senate is reviewing is the Invest in Kids school choice scholarship tax credit, which expired at the end of 2023. There’s been no public discussion about revisiting the program.

Illinois state Rep. Blaine Wilhour, R-Beecher City, said Illinois has a lot of advantages over Missouri and that the state should be a powerhouse, but the policies pushed under the capitol dome in Springfield make the state uncompetitive.

"There’s all kinds of gimmicks that we do through the government with picking winners and losers. At the end of the day, if we just fix our structural problems, get our spending under control and prioritize the things that are important to bring jobs and opportunities back … the natural advantages of Illinois are going to show through," Wilhour told The Center Square. "We need to get the government out of the way."

Gov. J.B. Pritzker said the Illinois government doesn’t pick winners and losers.

"We provide incentives for companies that come to Illinois,” Pritzker said. “We’re very proud of the fact that Illinois is attracting companies from all over the world.”

Unlike the Invest in Kids Act scholarship tax credit program, the electric vehicle battery maker with ties to the Chinese Communist Party, Gotion, will be getting $536 million in tax incentives. The Invest in Kids program was capped at $100 million and was a scholarship program for low-income families to send their students to qualified private and technical schools.

Missouri is eyeing to end their corporate income tax and tax credits by 2028. Missouri state Rep. Travis Smith, R-Dora, and the bill’s sponsor said eliminating the corporate income tax would ultimately benefit workers and consumers.

Illinois Gov. J.B. Pritzker
Illinois.gov

Wilhour said Missouri is gaining people and opportunity from Illinois.

"Just last week, we were passing through [the House] revenue committee all kinds of mechanisms for governments in the state of Illinois to raise property taxes that are already crushing people," Wilhour said. "Meanwhile in the state of Missouri, Indiana and every state around us is becoming more and more competitive and they’re just stealing our opportunity."

Illnois' corporate income tax rate is 9.5%. Indiana's corporate income tax rate is 4.9%, Iowa's are from 5.5% to 7.1%, and Kentucky has a 5% corporate income tax rate. A study released earlier this year ranked Illinois as the worst state to start a new business. Simplify LLC scored Illinois low because of the state’s maximum corporate tax of 9.5% and the exodus of what the company called “educated adults” from the state in 2023.

Pritzker said Illinois has Economic Development for a Growing Economy tax credits, which he said are available to anybody who applies. EDGE is a tax credit incentive program designed to encourage startups to invest, create and retain jobs in Illinois. Businesses must be incorporated 10 years ago or less, not yet turning a profit and ready to hire full-time W2 employees to be eligible.

"The No. 1 thing that people are looking for is a great environment for growing their business that has a location that has a lot of available energy, a workforce that is skilled and available to take over their manufacturing capability and a place that is welcoming to their employees,” said Pritzker. “All of that together is something Illinois offers companies.”

The Illinois Senate is reviewing Senate Bill 3273, which gives tax credits to people with student loans. Senate Bill 172 awards income tax credits to people who provide an endowment gift to a permanent endowment fund. In addition, the Senate is reviewing Senate Bill 3395, which gives tax credits to music companies and people pursuing music education degrees.