If a kingdom can be lost over a nail, then perhaps it's fitting that a hatchet could be threatening Illinois.
Such was the argument of Rep. Tom Demmer (R-Dixon), who took to the House floor to attack a bill that would penalize a business if it moves so much as one job out of state.
Sponsored by Rep. Michael Halpin (D-Rock Island), House Bill 3538 promotes taking away all government-provided economic development incentives — such as tax credits — and requiring businesses to pay back those incentives if they move any part of their organization from Illinois.
“This is a significant bill," Demmer said. "This is a really important bill for us to watch. We have to understand that we are talking about even moving a single job, irrespective of how many other jobs might be added all across the state — a single job might jeopardize these tax credits. It also might make it impossible for a developer who is looking to develop a piece of property under the River’s Edge Program and others … might make it impossible for them to find anybody to buy those tax credits. We can’t come into this with a hatchet and try to say, ‘How can we get accountability?’ by drawing the widest possible net. Let’s target this and make sure the incentives go towards what they are supposed to go towards, and we have actual recourse. Don’t draw this wide net.”
Demmer's main points of contention are the scattershot approach and lack of oversight of the proposal. He argued that it does not not take into consideration the amount of economic growth a company might have contributed to a local economy, and instead goes the ‘all or nothing’ route.
Halpin countered that the Department of Commerce and Economic Opportunity would provide the oversight, suggesting that the agency would assess cases individually to make a determination.
Demmer said the text of the legislation offers little clarification.
“We have to look at the very beginning of this bill — the actual text of the legislation — and it says "any business that moves all or part of its business operations and the jobs created by it," he said. "Nowhere does it recognize net jobs. They can add a thousand jobs, take one away and lose all the credits they have gotten. There is no time limit on this. This is making a significant change to the way that this operates and really goes far beyond what traditional accountability would be towards these incentives.”
Demmer said rather than getting businesses to stay, the bill would scare new business away, create challenges to businesses already receiving tax credits, such as the River Edge tax credit program, and do very little to promote growth.
“The very specific point here is that even a single job moved out of state, regardless of how many [jobs] are added, even a single job moved out of state renders null and void all their economic development incentives,” Demmer said.
Despite Demmer's urging of a "no" vote, the bill passed the House with 64 in favor and 48 against.
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