By Mark Denzler, Steve Rauschenberger and Bill Gibson -
Illinois’ unemployment rate rose again last month to 6.3 percent — the fourth highest in the nation and well above the national average. Unfortunately, we’ve heard this news before, but at least we know the solution: a stable and predictable business climate.
That’s why a diverse group of industries have come together urging lawmakers to support a series of tax incentives that will help reinvigorate the state’s manufacturing sector and provide businesses the certainty they need to invest and create jobs: it’s called the Advance Illinois Manufacturing (AIM) Coalition.
An opportunity exists with bipartisan support to rally around manufacturing by supporting the modern and permanent extensions of four critical tax incentives including the R&D tax credit, reform of the Manufacturers Purchase Credit (MPC), modification to the graphic arts sales tax exemption and a permanent coal, aggregate exploration, mining and off-highway sales tax exemption.
These comprehensive proposals would put people across Illinois back to work in good, high-paying jobs that provide an economic boost to our economy, generates state revenue at a time when it’s sorely needed and most of all sends a message to businesses that we’re turning the page on our past and that Illinois is “open for business.”
Let’s take a moment to discuss crystal clear examples of why these common-sense incentives are needed.
Illinois is home to more than 450 corporate R&D facilities, yet businesses watched the MPC renew and expire four different times over the last 13 years. Imagine how hard it must be for a business to invest and spend in Illinois with the uncertainty of our tax environment. Companies plan their R&D investment five, 10 or even 20 years down the road and the present on/off again cycle is one we need to break.
Further, the absence of a permanent policy is driving R&D investments to neighboring states,taking those good, high paying jobs averaging salaries of $80,000 with them. We are seeing this migration more frequently as new agriculture implement research expands in Iowa and as companies remain headquartered in Illinois, but choose to manufacture and develop products across state lines.
Or in the case of commercial printing industry, Illinois is the only state in the nation without an incentive for commercial printers engaged in manufacturing activity. Yes, once again we’re at the bottom.
The graphic arts exemption expired at a time when the industry employed 55,100 workers in more than 2,300 facilities. Quite simply, that industry’s livelihood is dependent upon this incentive encouraging businesses to invest in higher quality, more technologically advanced printing and graphic arts equipment.
There’s no doubt that our state is home to some pretty incredible industries – including manufacturing which alone generated $101 billion in manufacturing output and exported more than 64 billion worth of goods in 2014. Despite our current challenges, manufacturing remains a known leader in technology and innovation and contributes the single largest share – 12.4 percent — of the Gross State Product and employs more than 570,000 workers in good, high paying jobs.
But almost like it’s written in glaring red ink, we are the face of an outdated tax structure – one that fails to encourage R&D investment, one that sunsets tax incentive programs that encourage manufacturing spending, and one that lacks innovative solutions to securing business growth and development in our state.
Why choose Illinois when neighboring states offer more incentives for our business? These thoughts are keeping business owners up at night and as concerned Illinois constituents and employees struggling through a tough economy, we should be concerned, too.
We cannot continue to leave Illinois pro-business reforms by the wayside. Our coalition stands ready to work with lawmakers to make a case for why these modern and permanent tax incentives are a shot-in-the-arm to our ailing state economy.
Illinois cannot sit on the sidelines of prosperity. It’s time to create stability and predictability for our job creators and put more Illinois families back to work.
— Submitted by Mark Denzler, vice president and COO of the Illinois Manufacturers’ Association, Steve Rauschenberger, president of The Technology & Manufacturing Association and Bill Gibson, Illinois state director at Great Lakes Graphics Association on behalf of the AIM Coalition, representing a diverse group of industries including manufacturing, agriculture, biotech, printing and other important sectors of the state’s economy.
First published in the Rockford Register-Star