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New life for enterprise zones?

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If all of Illinois was put into one giant "enterprise zone," where taxes are trimmed and regulations relaxed, that would be fine with Mark Denzler.

"We'd support that," says Denzler, vice president and COO of the Illinois Manufacturers' Association.

But the support might be a little more tepid from government officials who would lose all that tax revenue. These days, it seems governments at all levels need every dollar they can get.

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State Sen. Mike Frerichs (Richard Chapman~Sun-Times)

Eighty-plus enterprise zones were established in Illinois three decades ago (there are now almost 100). The idea behind them is that only by trimming taxes and easing regulations can government attract business investment to economically distressed areas.

One worry is that once an area gets enterprise status, no one will ever give it up, creating perpetual enterprise zones. Another worry is that the enterprise zones don't generate enough genuine investment to atone for the tax breaks. And yet another concern is that businesses outside the zones who pay the full amount of taxes see their competition subsidized by government. Plus, no one has a clear idea of how much money overall the zones have taken out of various governments' bottom lines.

People who are less-than-enamored of enterprise zones see the equation this way. If they worked in resurrecting a distressed area, they are no longer needed. If they didn't work by now, three decades later, they never will and ought to go just the same.

For the third year in a row, state Sen. Mike Frerichs (D-Champaign) has introduced a bill to extend the life of enterprise zones. He wants to go from 30 years to 55, as well as increase by 10 the number of such zones. (The zones originally were designed to last 20 years, but got a 10-year extension a decade or so ago.) Previously, the bill has passed the Senate unanimously, only to die in the House.

The bill, Senate Bill 3688, also would increase the maximum size of the zones from 12 to 18 square miles (or up to 20 square miles if in more than four counties or municipalities).

Of his bill this year, Frerichs says, "This one is a little more refined." Backers also are holding hearings around the state, not so much to learn new information as to make their case. (The Senate has established a bipartisan Special Committee on Enterprise Zone Extensions, which Frerichs co-chairs.) The third hearing was held in Chicago on April 5.

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Mark Denzler (Richard Chapman~Sun-Times)

Backers of the zones say that over the years they have generated more than 900,000 jobs and nearly $50 billion. But without an extension, the older ones will start expiring in the next few years.

Two of the first seven to expire would be in Chicago.

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This page contains a single entry by Thomas Frisbie published on April 5, 2012 9:06 PM.

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