Budget impasse forces Enterprise Zone delays

By Shane Nicholson
Managing Editor

A crucial economic development tool for Rockford remains in limbo as the state moves into its eighth week without a budget in place.

The area’s Enterprise Zones – encompassing commercial land across two parts of Rockford, as well as portions of Boone County – are part of a program initiated in 1982 to help spur economic growth and development in distressed areas.

The zones, which exist in communities across the state, provide sales tax abatements and investment and jobs-creation credits to businesses in the areas.

A change in state law required communities to re-apply for the Enterprise Zone designation as the former legislation sunsets at the end of 2015. But the budget impasse in Springfield has put on hold 49 zone that applied for re-certification under the new statute.

“Local and state tax incentives are important business development tools,” said Illinois Department of Commerce and Economic Opportunity (DCEO) Director Jim Schultz in a statement, “but cannot be truly effective while the state continues to bleed jobs due to high costs of doing business.”

The tax incentives offered have been on hold since July 1 says DCEO, and without a budget in place they will continue to hang in limbo, placing development in their boundary areas in question.

The Enterprise Zone, as well as its sister legislation, the River Edge Redevelopment Zone (RERZ), have been crucial in drawing business to Rockford in recent years, supporters and civic leaders say.

“The Enterprise Zones that Rockford has applied for are critical economic development tools to potential business clients, particularly for manufacturing job retention and expansion,” said City Manager Jim Ryan.

Local business activists had been encouraging developers to take advantage of the expiring Enterprise Zone credits, but with the questions lingering over the state’s budget many say they’re now hesitant to push forward with projects not knowing if reimbursement is on the way.

“It creates some shaky ground,” said one local business leader. “You can’t plan for what you don’t know, and right now we don’t know the status of (the Enterprise Zone).”

“While delays in the certification process due to the lack of an approved state budget shouldn’t hurt us in the short run, we are hopeful that a budget can be approved in the next 60 days,” Ryan said.

“Being able to market and deploy the Enterprise Zone will be a vital component of our economic development toolbox for job creation.”

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