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Illinois halts economic incentives for businesses

From the Chicago Tribune

Business advocates Tuesday said they weren’t surprised by Illinois Gov. Bruce Rauner’s decision to suspend future economic incentives used to attract and retain businesses.

“It’s part of the process,” said Pam McDonough, CEO of the Alliance for Illinois Manufacturing and a former director of the state’s Department of Commerce and Economic Opportunity, which administers incentives programs. “We are playing power games.”

Illinois State Capitol

Illinois State Capitol

In a statement, Rauner’s office said the move is part of a series of cuts aimed at narrowing a deficit of more than $3 billion in the state’s fiscal 2016 budget. It’s the latest attempt by the Republican governor to ratchet up pressure on lawmakers to agree to his pro-business, anti-union agenda. Democrats have passed a spending plan, but the budget has yet to reach Rauner’s desk.

Programs affected in Tuesday’s action include the Employer Training Investment Program, which is used to reimburse companies for up to 50 percent of the cost of training workers, and the Economic Development for a Growing Economy tax credit program, or EDGE.

Todd Maisch, chief executive of the Illinois Chamber of Commerce, said the governor’s move is prudent in the short term, given the budget battle ahead. Longer term, however, the lack of incentives would put Illinois in a competitive disadvantage because other states use incentives to lure companies.

EDGE was created in 1999 as an incentive for companies to create jobs in Illinois. But in recent years the program has shifted to job retention. That practice came under scrutiny after the Tribune reported some companies were receiving incentives even as they laid off hundreds of workers.

A group of nine companies are using EDGE to keep their employees’ withholdings instead of forwarding the money to the state. That special deal, which requires legislative approval, has been on a “de facto” moratorium after at least a half-dozen companies, including agriculture giant Archer Daniels Midland, sought it in 2013.

Rauner’s office said all previous commitments will be honored.



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