We received two pieces of news in recent days that really highlight why we desperately need to focus on improving our jobs climate: first, our unemployment rate in Illinois rose nearly half a percentage point to 9.9%. Then a new survey of 322 company executives ranked Illinois as the third worst state in the country for doing business (we did manage to score just ahead of New York and California).
Our neighboring states are beating us in the battle for jobs. Why? Because they have made job creation their number one priority and have instituted jobs-friendly policies to help attract and keep employers.
We need to fight fire with fire. So, this week House Republicans introduced a new jobs package for Illinois that we will work to pass in our upcoming fall veto session. Our package will:
Re-instate the Net Operating Loss deduction.
Many businesses are losing money in this tough economy, this proposal allows them to use their net operating loss as a tax deduction extending the corporate carry forwards from 12 years to 17 years, and allowing a two year carry back.
Re-enact the Illinois Research & Development tax credit.
This tax credit expired in December 2010. Reinstating it would allow businesses that are doing legitimate research and development projects to qualify for a tax credit each year. Our proposal would also add ethanol and biodiesel research as qualified R & D activities.
Extend the life of existing Enterprise Zones by up to 20 years.
Most designated Enterprise Zones in Illinois are set to expire in the next ten years. Our proposal would allow current municipalities around the state to extend the enterprise zones in their communities to ensure tax incentives to businesses that have located or choose to locate in these underdeveloped areas.
Reduce the administrative costs and burdens involved with setting up and incorporating a Limited Liability Corporation in Illinois.
In Illinois even the cost to set up a business is much higher than in surrounding states. We are proposing to reduce that fee from $750 to $100. The highest fee that any of our neighboring states currently charges is in Wisconsin at $130.
Increase the estate tax exemption to $5 million.
Under the current law, when family farms are passed from generation to generation the heirs are hit with a huge estate tax if their assets are worth more than $2 million. Our proposal would raise the estate tax exemption to $5 million—which mirrors the federal tax code.
The initial cost to institute these business friendly policies is estimated at about $492 million, but remember, for every point we reduce our unemployment rate the state generates around $600 million in new revenue to fund state programs and services. This is a true investment in our future.
The bottom line is this: jobs are created in the private sector and we need to get busy ensuring we are competitive with Indiana and almost every other state in the country.
