Lost in the rhetoric and teeth-gnashing of last week’s vote to increase state taxes is the role that local government plays in attracting and retaining businesses. Economic development programs to entice businesses are the norm for most counties, but a few cities have taken matters into their own hands and have formed economic development corporations (EDC) of their own.
The two municipalities- Downers Grove and Naperville- in DuPage county with public-private EDCs are among the most successful at attracting new businesses in the region. In The Business Ledger’s ranking of top 10 business stories in 2010, Downers Grove successes in economic development earned it two separate spots on the list.
According to Greg Bedalov, president of the Downers Grove Economic Development Corporation, “The ability to remove obstacles and streamline processes have been a tremendous advantage for Downers Grove.” As an example, he pointed to the EDC’s role in facilitating the swift (six months from concept to completion) construction of an additional lane on 31st street to meet the expanding needs of businesses in an adjacent office park.
Bedalov is proud of the EDC’s accomplishments. “We run through walls to get things done,” he says. “Businesses want to know they’re in partnership with local municipalities and we focus on that.”
Part of the “tools in the toolkit” of any economic development program- whether county or municipal- are the incentive programs the state offers to businesses. In the competition for businesses, states offer a variety of services which are designed to “help Illinois businesses thrive in today’s economy.” according to the Illinois Department of Commerce and Economic Opportunity (DCEO).
One of the popular state programs offered to businesses is the EDGE tax credit program. A business can receive this tax incentive when making a substantial development in Illinois, vis a vis job attraction or retention. The EDGE program gives businesses a credit against their tax liability. This credit is based upon income taxes their employees pay to the state of Illinois.
EDGE agreements already signed with the state of Illinois would be based on the previous individual tax rate of 3%. During the inauguration festivities in Springfield last week, Bedalov spent much of his time speaking to legislators about this program. “It’s a major issue,” he said. “Will businesses with EDGE agreements have their corporate tax credit increased to the new 5% rate? With the corporate tax increase up to 7%, it could make a big difference for our businesses.”
While EDCs are talking to legislators to keep their municipalities and counties competitive in today’s economic climate, DCEO is “still internally analyzing the impact of the new tax rate on the EDGE program.” said spokeswoman Marcelyn Love.
In the midst of the uncertainty, Bedalov says the EDC will be sticking to the tried and true of business retention: nuturing the relationships between the village of Downers Grove and local businesses. “For the next six months, we’ll be focused on retention and making sure we have good customer service. It comes down to old-fashioned blocking and tackling and we’re really good at that.”
