Illinois budget includes new tax credits for certain industries
By Greg Bishop
The Center Square
SPRINGFIELD – Some Republicans joined with Democrats to vote for a $40.3 billion state budget in part because of a slew of tax credits for certain industries.
Republicans in both the House and Senate voted for the budget in exchange for what they said were tax credits needed to spur economic development in Illinois. Those tax credits for some industries flew through the legislature.
State Sen. Toi Hutchinson, D-Olympia Fields, said the measure included the Managed Care Organization assessment that will tax health insurance claims. It also included provisions some Republicans fought for.
“Creates the Blue Collar Jobs Act, reinstates the manufacturing purchase credit and phases out the franchise tax,” Hutchison said. “These are excellent added provisions to this. This makes this bill even stronger.”
“These are items that have been desperately needed for a great deal of time for our friends on the business community,” said House Minority Leader Jim Durkin, R-Western Springs.
“We’re glad to help you with your priorities. I’m asking you to help with our priorities,” he told Democrats in the House.
The first year of a five-year phase-out of the franchise tax will reduce taxes for 300,000 businesses, supporters said. The Blue Collar Jobs Act will give tax credits for construction projects.
Illinois Manufacturers’ Association President Mark Denzler said the tax credits will help the some in the business community.
“This is their money, it’s not government’s money,” Denzler said. “So the fact that they can save it and keep it and spend it on their own projects is meaningful.”
But there’s more work to do, Denzler said.
“I don’t think it’s going to be a panacea, nothing is,” Denzler said. “We’ve seen a lot of higher taxes and more mandates and the fact that they’re offering some tax relief to business is a positive sign.”
House Majority Leader Greg Harris, D-Chicago, said the tax credits were tailored to specific industries.
“We’re targeting areas where there’s a lot of competition for high-growth industries to come to our state,” Harris said. “We’re particularly incentivizing [businesses] to come to areas that have a population that is underserved.”
Republicans who didn’t support budget, like state Rep. Darren Bailey, R-Louisville, said there weren’t enough reforms to the state’s spending or measures to lower the cost of doing business for all employers in Illinois.
“We need relief from property taxes, we need relief from workers’ comp, we need relief from business regulations,” Bailey said. “That’s truly what it’s going to take to get Illinois to thrive.”
There’s been no movement to lower workers’ compensation costs, but lawmakers did approve a task force to review how to lower property taxes.