Nov. 24--Three small firms have been handed an estimated $1.1 million in tax breaks over the next decade to bring 87 jobs to Illinois -- the first EDGE tax credits issued since Gov. Bruce Rauner reinstated a revamped version of the controversial program earlier this month.
McHenry-based Fabrik Industries, Northbrook-based Bell Flavors and Fragrances, and Italian firm Taurus Die Casting will be able to claim the tax breaks once the state's budget impasse is resolved, according to the Illinois Department of Commerce.
The EDGE incentive program was founded in 1999 to attract jobs to Illinois that might otherwise have gone elsewhere and to keep jobs that were at risk of leaving. But it has come under fire for being a billion-dollar giveaway after the Tribune revealed how many companies collected the tax credits despite failing to add or retain jobs.
Rauner halted the program in June, only to relaunch it in November along with tighter rules that he said would provide a "more fiscally responsible approach." The moratorium didn't prevent him in October from handing ConAgra Foods up to an estimated $1.26 million a year in tax breaks to relocate its headquarters from Omaha to Chicago -- the state said that deal was hammered out before the program was suspended.
The three firms handed the credits on Tuesday were among 40 that had applied before the program was temporarily suspended. According to a news release, Fabrik Industries will add 25 jobs and make a $5 million capital investment at its molding business; Bell will add 25 jobs and invest $10 million at its business creating flavors and fragrances for food, beverage, cosmetics, household products and personal care items; and Taurus will add 37 jobs and invest $6.4 million in a Rockford facility.
The state did not immediately respond to a request that it put a dollar value on the breaks, which allow the firms to deduct the state income taxes withheld from the newly employed workers from their corporate tax bill for the next decade. Nor has it typically provided such a figure in the past. None of the firms immediately returned calls seeking comment.
But using U.S. Bureau of Labor Statistics salary data for production workers to estimate the value of the breaks, Fabrik and Bell have each been handed approximately $328,000 in tax breaks, while Taurus will save around $485,000 over the next decade.
All three companies might have located the jobs outside the state without the incentives, according to the Department of Commerce.
The revamped rules no longer allow firms to claim credits for keeping jobs in the state, extending tax breaks only to firms that bring new jobs.
Still, critics said earlier this month that Rauner's changes do not go far enough. The program still lacks transparency and provides questionable benefits to state taxpayers, who lose about $100 million a year in tax revenues to the program, they said.
kjanssen@tribpub.com
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