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Coles Together Angela Griffin, President & CEO 400 Airport Road Mattoon, Illinois 61938 Ph: (217)258-5627 or (217)348-5627 - Fax:( 217)235-9492 Email: angela@colestogether.com
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May 13, 2000 ENTERPRISE ZONE Some legislators working to extend program's life Property tax abatements now set to end in 2010 BY DAVE FOPAY, Staff Writer CHARLESTON - Coles County's enterprise zone is now 10 years old, and the economic development tool might be going through some changes. The state certified the county's enterprise zone in 1990 as a way for the county to offer incentives to new and developing business. The biggest of those incentives was 10 years of abatements on property taxes for improvements to nonretail businesses that expanded or located in the zone. But now that the project is entering its second decade, any business that achieves enterprise zone status will only get abatements until the 20th anniversary of the enterprise zone's inception. That means projects that begin next year would get the abatements for nine years, projects in 2002 would get them for eight years, and so on. "We're going to start seeing the life of our property tax abatements decline," said Jeanne Gustafson, executive director of Coles Together, the county's economic development organization that oversees the enterprise zone. However, here's work in the Illinois General Assembly on legislation that would extend enterprise zones' lives to 30 years. One bill already signed into law allowed Vermilion County's enterprise zone to stay in effect for that long, and there's a chance that the change might be made on all the state's enterprise zones at once, Gustafson said. She said the county's representatives in the Legislature have been "very supportive" of the change, and the only real issue seems to be whether it will be county-by-county or all at once. It would be "tough" to get it done by next year when the local abatements start to decline, but that shouldn't be a problem if it doesn't go on for a number of years, Gustafson said. If the change does go through at the state level, taxing bodies in Coles County would then have to sign on to allow the additional abatements, just as they did when the program began in 1990, Gustafson explained. Another effect of the 10-year anniversary of the county enterprise zone's inception is that the 10 years of abatements will run out for the projects that achieved zone status in the first year. One thing that might come to mind with that is the possibility of businesses leaving once their tax breaks end, but Gustafson called that a myth. "I've never seen it," she said. "It is not the sole factor in bringing a company in." There are other "key factors" that a company considers when deciding on a location, Gustafson said, including transportation and labor quality. The possibility of incentives from an enterprise zone can often be a "tie-breaker" if the company is also considering other locations, she said. Something else that might affect the enterprise zone, not related to the anniversary, is the planning efforts that several governments in the county are undertaking, Gustafson added. The zone's boundaries might eventually have to include such areas as developments north of Charleston in conjunction with the new Interstate 57 access road, she explained. Changing the boundaries also would need approval of the county's individual taxing bodies, she said. Gustafson said it's a "misconception" that the enterprise zone allows a business a complete exemption from paying property taxes. Whatever property was on the tax rolls before a business enters the enterprise zone stays on, and the abatements are for the improvements, new construction, that takes place under the enterprise zone project. Other incentives the enterprise zone offers are an abatement on sales taxes for construction materials for the improvements if the materials are purchased in the county, and a jobs tax credit, though adding jobs is not a requirement. "Without a doubt, it's the most powerful tool we have, " Gustafson said of the enterprise zone. Because taxing bodies approve ahead of time what kind of abatements they'll allow, companies don't have to go before them to explain their projects and risk exposing something, such as labor matters, they want to keep confidential, she said. Also Coles Together can quickly tell a company whether its project is eligible for the enterprise zone to help the company expedite its decision, she added.
Used with permission from Mid-Illinois
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