Economic Development

Rewarding The Right Location

Illinois offers incentives for linking workplace with workforce.
by | July 2007

Several states have tried to promote "smart growth" by limiting the roads, sewers and other infrastructure they are willing to build in undeveloped areas. Illinois is taking a different tack. Under a new law, the state Department of Commerce and Economic Opportunity can offer extra tax breaks to companies or developers that site their projects in areas that already have mass transit or affordable housing nearby.

The idea is not so much to limit development as provide incentives for businesses to locate where there is a surplus of workers. "We know where people live, but the jobs are getting out of reach for some of them," says state Representative Kathleen Ryg, the bill's primary sponsor.

Low-income city dwellers who can't afford cars and are cut off from employment are only part of the economic issue, adds Frank Beal, executive director of Chicago Metropolis 2020, a business-backed group that supports mass transit and better planning. "There's a real dollar cost to businesses of having a workforce a great distance from the jobs," he says.

Companies that qualify for the tax break would only be eligible for a 10 percent boost over the amount of tax credits they might receive otherwise--a compromise to meet concerns of commerce department officials who had opposed earlier versions of the bill, wanting to keep a free hand to reward companies in any way that might attract jobs. The compromise version, says state Senator Terry Link, another bill sponsor, is "more a first step than anything else. It's not mandating the state to do it, but it's giving them the opportunity to reward these businesses."

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