Highland News Leader

Budget impasse has local enterprise zones on hold

Illinois has suspended the certification of 49 enterprise zones in the state, including three recently approved for Madison County and another for Clinton County.

Madison County’s three recently approved enterprise zones touch many municipalities and communities throughout the county, including Highland, which recently banned together with Collinsville, Glen Carbon, Maryville, St. Jacob and Troy to create the Madison County Discovery Enterprise Zone.

The Clinton County Enterprise Zone would include Albers, Aviston, Beckemeyer, Breese, Carlyle, Damansville, Germantown, New Baden and Trenton.

But the Illinois Department of Commerce and Economic Opportunity (IL DCEO), the state economic development agency that approves sales tax breaks for construction materials, says it cannot certify the previously approved enterprise zones because of the state’s ongoing budget impasse.

The IL DCEO announced late last week that the tax incentives are on hold as first-term Republican Gov. Bruce Rauner and majority Democratic lawmakers continue to squabble over the absence of a state spending plan in the fiscal year that began July 1.

DCEO Director Jim Schultz said that it would be a “disservice to Illinois businesses and communities” to issue the tax breaks “while the state continues to bleed jobs due to high costs of doing business.”

Enterprise zones allow local governments to negotiate additional incentives with companies that in turn promise to create new jobs.

“Local and state tax incentives are important business development tools, but cannot be truly effective while the state continues to bleed jobs due to high costs of doing business,” Schultz said in a statement.

Although the agency is holding off on certifying the approved applications for the enterprise zones, Schultz said he will continue to evaluate when it would be the appropriate time to do so.

Enterprise zones are intended to stimulate business and industrial growth and retention in targeted areas.

Under Madison County’s current enterprise zone program, the county offers to business within their enterprise zones property tax abatement, sales tax exemption on any building materials used in building or renovating property within the zones, tax exemptions on machinery and equipment for those business costs, and a utility tax exemption on gas, electricity, and administrative charges..

Highland City Manager Mark Latham was optimistic on Thursday that the Madison County Discovery Enterprise Zone will be certified by the IL DCEO.

“An enterprise zone helps to keep us on a level playing field with other communities,” he said.

Latham, who has been trying to get an enterprise zone established in Highland for more than 10 years, believes the enterprise zone would give Highland one more tool in our toolbox for economic development.

Frank Miles, manager of Madison County Community Development, was “cautiously optimistic” on Friday that the county’s three zones on the IL DCEO’s approved list will ultimately make it.

“This step is a major hurdle,” he said, noting the state has until the end of September to certify the new enterprise zones.

Leah Dettmers, economic development specialist with the Madison County Community Development, said enterprise zones are a good tool to lure business.

“With enterprise zone incentives, like utility tax abatement and sales tax exemptions, Madison County can compete in a national market to attract and retain profitable companies that in turn create hundreds of jobs to our local economy,” she said.

Dettmers citing the Gateway Commerce enterprise zone as a successful example.

“Gateway continues to thrive in Madison County due to the enterprise certification, and recently broke ground for an expansion, Gateway East,” Dettmers said.

The Gateway Commerce enterprise zone currently houses more than 2,000 jobs and acting as a distribution hub for national companies like Hershey, Dial and Proctor & Gamble.

Dettmers said the county has not been given any indication from the state when the approved enterprise zones will be certified due to the budget impasse.

“With the state’s budget not balanced, future designation and marketing of those areas, unfortunately, is at a standstill. (Madison County Board) Chairman (Alan) Dunstan continues to meet and collaborate with the local representatives about fiscal responsibility of the state, insisting that the zones become certified in a timely manner.”