Former Illinois DCEO head applauds move to expand EDGE tax credit program
During the fall veto session, Illinois lawmakers will talk about revising how the state offers economic development incentives that could help lure companies like Samsung to the state. The Bloomington-Normal area is a finalist for the EV battery plant, and some media outlets have reported Ohio is the other major contender.
Jim Schultz runs a private equity fund called Open Prairie that invests in agriculture tech. But he was the head of the Department of Commerce and Economic Opportunity (DCEO) in the administration of former Gov. Bruce Rauner. Schultz said he endorses plans to expand the EDGE tax credit, but the state needs to do more than that.
"I'm a big fan of the Enterprise Zone tax credit. I think that's an important tool, as well. I think we ought to increase workforce training dollars. I think we ought to increase the amount of investment in community colleges and more from a technical training perspective," said Schultz.
Schultz said efforts to attract the electric vehicle industry to Illinois are wise. When he was involved in talks with Rivian, he said it was far more speculative, though much better than selling the Mitsubishi plant for scrap metal, which was the other likely outcome at the time. Schultz said Rivian was not a sure thing for the state to offer economic incentives. EVs even four years ago weren't viewed the same way as they are now — as a key part of the future.
He said he views the EDGE tax credit as an offensive weapon that should be used to attract new businesses to the state, not a defensive weapon to prevent firms from leaving Illinois. He said it has not always been used the right way.
Schultz also said a focus on balancing incentives with jobs of a certain average wage is not the right perspective to have in evaluating a new company, and how much the state should give. He said that approach may shortchange people already in Illinois who have no present hope of making, say, $30,000 per year.
"When I ran the EDGE tax credit program, my focus was not on the dollar amount in wages, it was do we have the workforce that can address the work needs of this organization and is it an opportunity where we can take people lacking skills ... who are underskilled and get them training and better skills," said Schultz.
Schultz said he thinks the state is on the right track in trying to attract businesses related to the electric vehicle sector. He said the state's rail system should make Illinois attractive to electric carmakers as well because they can ship easily across the nation.
Schultz said in talks with prospective businesses, he led with the quality of the workforce in Illinois compared with other states and countries.
"The logistics thing is a huge issue that a lot of companies don't think about as they look at locating a plant. We have seven class one rails that pass through Illinois, the only place that happens. One of the things I talked about in our competitive advantage was the five 'R's: rails, roads, runways, rivers, and routers. If you are going to move anything from a product perspective, or from a digital perspective, it's most likely going to come through Illinois," said Schultz.
Schultz said it's tough to put an economic number on logistics costs, but Illinois' location is an intangible asset.