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By L. Nicole Trottie
The Village of Maywood is one of a several of municipalities throughout the state accepted into the Illinois Enterprise Zone Program. The entire Village of Maywood is designated an Enterprise Zone by the state of Illinois.
You might be wondering what’s the Illinois Enterprise Zone Program (IEZP)?
The program is designed to stimulate economic growth. It’s purposed for neighborhood revitalization in economically depressed areas throughout the state of Illinois. The program achieves this goal through tax relief and tax incentives, much like TIFF, but with more bells and whistles.
How the Enterprise Zone benefits business development
Businesses located in Enterprise Zone areas are eligible for exemption of 6.25 percent retailer’s occupation tax paid on building materials; investment tax credit of 0.5 percent property on qualified property; sales tax exemptions on personal property used in manufacturing process or operation of a pollution control facility; electric and natural gas tax exemption, and an exemption on the Illinois Commerce Commission’s administrative charge and telecommunication excise tax.
Summary: Business can open shop in struggling communities for a heck of a lot less than in non-Enterprise Zone communities.
How the Enterprise Zone benefits tax payers, community
In addition to state incentives, each zone offers local incentives to enhance business development projects. Exemptions under the Zone Program are available for companies that make minimum statutory investments that either create or retain a certain number of jobs. These exemptions require a business to make application to, and be certified by, the Illinois Department of Commerce. Eligibility for the exemption is contingent upon a business making a $5 million investment, which causes the creation of 200 full-time jobs, or an investment of $175 million for the creation of 15 new full-time jobs, or an investment of $20 for the retention of 1,000 full-time jobs. The majority of the jobs created or retained must be located in the Enterprise Zone in which the investment occurs. Any big-box retail would fit the bill; Whole Foods, which opened recently in Englewood; Target; Mariano’s.
Summary: The Program stimulates JOBS for Maywood residents. The average unemployment rate for Illinois is 5.7 percent. The average unemployment rate for Cook County is 4.4 percent, according to the Illinois Department of Employment Security. Maywood’s current unemployment rate is 20 percent, more than triple the average unemployment for the state and Cook County.
Until this column, residents have heard little to nothing about the Enterprise Zone program. Legal and public notices, designed for transparency and to make residents aware of programs and meetings like the Zone Enterprise, are published by the village in newspapers other than the local and legal newspaper of record – West Suburban Journal – in violation of the Illinois Public Notice laws.
Enterprise Zones are among Illinois’ most important tools to stimulate economic growth and neighborhood revitalization. For the program to be successful it depends upon a “creative partnership” between state and local government. More importantly, its success weighs heavily on local government to create and nurture a community that welcomes business. Although the program is administered at the state level, its ultimate success rests at the local level – your Maywood village officials.
The village will soon hold less cards in the municipal’s ante to attract business. The Maywood Zone Enterprise is set to expire, July 1, 2018. The inaction by village officials to capitalize on the program has effectively squander job stimulus and growth, desperately needed to help Maywood residents, businesses and the community at-large. There is little to no excuse, with so many incentives, blighted areas throughout, three times the average unemployment rate for Cook County, for the village to come up short.
The onus to generate new business development rests with the village economic development manager, village manager, mayor and village trustees.
By its track-record, officials for too long have been steering Maywood down the road zoned for the short yellow bus traveling nowhere.
Other advantages and incentives provided under the Enterprise Zone Program:
Jobs Tax Credit – Allows a business a $500 credit on Illinois Income Taxes for each job created in the zone for which a dislocated worker or economically disadvantaged individual is hired. A minimum of five eligible employees must be hired to qualify for the credit.
Dividend Income Deduction – Individuals, corporation, trusts and estates are not taxed on dividend income from corporation doing substantially all their business in a zone.
Interest Deduction – Financial institutions are not taxed on the interest received on the loans for the development within an enterprise zone.
Contribution Deduction – Businesses may deduct, from taxable income, double the value of a cash or in-kind contribution to an approved project of a designated zone organization.
In addition, Maywood may provide a variety of local incentives to further encourage economic growth and investment in Enterprise zones. The incentives offered are determined by the local governments. The following list is not inclusive but serves as an example of the most common local Enterprise Zone incentives offered: Abatement of property taxes on new improvements; Homesteading and shopsteading programs; waiver of business licensing and permit fees; streamlined building code and zoning requirements; special local financing programs and other resources.