State Rep. Jack Franks issued the following news release:
SPRINGFIELD – The head of the powerful House State Government Administration Committee this week filed legislation aimed at overhauling the controversial Economic Development for a Growing Economy (EDGE) Tax Credit Program. State Rep. Jack Franks (D-Marengo), partnering with the Small Business Advocacy Council (SBAC), introduced a comprehensive plan to address inadequacies in the program, while vastly increasing oversight andtransparency.
“We must no longer capitulate to the demands of corporations threatening to leave Illinois without a payout, nor should we allow our state government to further mortgage our future fortemporary political gains,” said Franks. “Each incentive package, which allow companies to keep percentages of their employees’ withholdings, must be thoroughly evaluated and be a worthwhile investment for Illinois taxpayers.”
Franks’ legislation empowers and reorganizes the Illinois Economic Development Board to act as an oversight authority for the EDGE incentives offered through the Department of Commerceand Economic Opportunity (DCEO). Comprised of nine members with financial backgrounds, each board member must be appointed by the governor and confirmed by the state Senate. The board will have the power to approve or reject applications for credits and be required to evaluate whether incentive packages meet publicpolicy objectives.
“Small business is the backbone of the Illinois economy,” said Elliot Richardson, President of the Small Business Advocacy Council, a non-partisan organization representing more than 600 businesses in the Chicago area. “While we understand that EDGE credits maybe necessary to keep businesses in Illinois, small companies must have a fairopportunity to access them.”
HB 1336 not only addresses the manner in which tax credits are awarded, but also sets monetary limits on total cost. In Fiscal Year 2014 and beyond, the proposal provides that no more than $100 million in credits may be awarded by the state,and a maximum $10,000 per employee. Additionally, unlike previous EDGE incentive agreements, companies will no longer be able to decrease their workforce while receiving incentives – referred to as ‘normal attrition.’
“As our economy fights to recover and neighboring states aggressively court our companies, we must strive to improve Illinois’ overall business environment, not just give breaks to one business ove ranother,” continued Franks. “Instead of selectively providing special deals to Illinois largest conglomerates, we need to focus on supporting all our struggling business by lessening the regulatoryand tax burden across the board.”
Franks previously penned an op-ed in the Chicago Tribune calling attention to Illinois’ selective business incentive packages, criticizing our state’s high corporate tax rates and special incentives offered to a chosen few corporations. The Wall Street Journal called handing out favors one business at a time “politically corrupting and an ineffective economic development strategy.” Last year, Franks passed legislation lifting the veil of these secretive EDGE incentives, requiring DCEO to begin posting agreements online.
Under the auspices of promised job creation and retention, more than $500 million in taxpayer-backed incentives have been given to at least 80 large private corporations in the last two years. For example, Motorola Mobility managed to qualify for more than $110 million in financial incentives for keeping employees in Illinois, but permitted the company to dramatically reduce its workforce, which was later purchased by Google for $12 billion.
“This bill will not only allow small businesses the opportunity to compete for these credits, it will also ensure the EDGE tax program is operated in an accountable and effective manner,” added Richardson.
For more information, please contact Rep. Franks’ at (815)334-0063 or email firstname.lastname@example.org.