Illinois Manufacturers’ Association President Mark Denzler termed the package “a very good step forward.” Some further discussions are necessary, he added, but the plan if approved will help Illinois compete for the type of facilities that have been going elsewhere.
The centerpiece of Pritzker’s plan is a refundable state income tax credit of 75% or 100% of withholding from workers at electricity manufacturing and supply plants, for up to 15 years. The larger, 100% figure would apply to newly hired workers at a facility located in an “underserved area” of the state.
Belvidere, the South Side Ford Plant and Normal all are located in underserved areas.
Companies also would get refundable credits of 25% or 50% of withholding from current workers if a minimum number of net new employees was added. For a large manufacturer, that would be at least 500 new jobs created over a 60-month period, paired with a capital investment of at least $1.5 billion.
• Training costs would be eligible for an income-tax credit, 25% in some cases and 50% in underserved areas.
• A sales tax exemption would be granted to qualifying companies on their purchase of building materials. They’d also be exempt from state utility taxes on electricity and natural gas.
• Half to 75% of taxes on wages of construction workers who build EV facilities would be waived.
• The state will establish a tax force to study ways to expedite permits, and promises to prioritize any needed road construction.
Asked directly if the incentives are enough for Illinois to compete, Manar replied, “That will be determined.” He added, “We listened to the stakeholders.”
Credit recipients would have to report on diversity in hiring and on their board composition, and outline a plan to boost hiring of minorities.
One thing not in the package is relief from local property taxes. Sources say Chicago Mayor Lori Lightfoot objected to doing that at a time when she’s raising property taxes to pay for pension costs.
That possible break will have to be “the subject of broader discussion,” Manar said.
As is the case with the incentives for data farms that Pritzker pushed through the Legislature, the EV package would require contractors building electric-vehicle facilities to reach labor peace agreements with local unions. But there is nothing in the package now that would apply to people who work in the plant after construction.
The manufacturers’ Denzler said he’d like to see both property-tax relief and something to lower utility bills in the package. The latter is particularly important to battery manufacturers such as Samsung that have high power demands in the manufacturing process.
via Crain’s Chicago Business
October 14, 2021 at 07:02AM