April 14th, 2006

Good Jobs First is proud to announce that Illinois will soon become the first state to intentionally link the granting of economic development subsidies to jobs that are accessible by public transit and/or close to affordable housing. Congrats to our Illinois project director Jeff McCourt and the groups (see below) that advocated for this landmark victory.

The Illinois Legislature last week sent the Business Location Efficiency Incentive Act (SB 2885) to Gov Blagojevich for his signature. By giving extra preference to transit- and housing-accessible deals, Illinois' "location-efficient" incentives law will encourage companies to make siting decisions that create more job opportunities for workers who cannot afford a car, avoid costly new infrastructure expenses, reduce sprawl, and promote more affordable housing. The governor is expected to sign the bill, which passed both the Illinois houses by wide margins.

See Senate Bill 2885 at: http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=50&GA=94&DocTypeId=SB&DocNum=2885&GAID=8&LegID=23994&SpecSess=&Session

The bill allows the Department of Commerce and Economic Opportunity (DCEO) to slightly increase corporate income tax credits offered under Illinois's Economic Development for a Growing Economy (EDGE) program to companies that can prove a proposed project site is within easy reach of affordable workforce housing and/or public transit. For such "location efficient" sites, companies can receive up to 10 percent more EDGE tax credits than they would be otherwise eligible for (either a larger annual credit or a longer period).

The idea to link subsidies with transit sprang from Good Jobs First's 2003 study A Better Deal for Illinois, which documented two outrageous cases of state-subsidized sprawl by Sears and Motorola (http://www.goodjobsfirst.org/pdf/il.pdf) and from our 2003 national study Missing the Bus: How States Fail to Connect Economic Development with Transit. Both suggested location-efficient incentives as a remedy to link jobs via transit (http://www.goodjobsfirst.org/pdf/bus.pdf), create more opportunity for low-income workers, curb sprawl, improve air quality, and expand commuter choice.

However, the Illinois state subsidy reform bill (PA 552- 93) made law in 2003, while including many Good Jobs First recommendations (such as web-based disclosure and clawbacks), did not include a "location efficiency" provision. An unusual coalition formed to amend the subsidy reform law, including: the prominent anti- sprawl business organization Chicago Metropolis 2020; Citizen Action/Illinois, a grassroots leader in promoting affordable and accessible public transit; and the Center for Neighborhood Technology (CNT), a nationally prominent resource center promoting sustainable urban development.

State legislator Kathleen Ryg, representing the north Chicago suburb of Vernon Hills, introduced location efficiency bills in both the 2004 and 2005 legislative sessions, with energetic coalition support. Although both bills stalled after passing the House, support grew with well-attended public meetings in both the north and south suburbs.

By making the bill's location efficiency provisions an optional benefit instead of a mandatory threshold, backers eventually won the support of DCEO, which had actively opposed the bill. Increasing incentives for business investment in high unemployment areas placated legislators from rural areas that lack significant mass transit programs.

When State Senator Terry Link (also of Vernon Hills) re-introduced the bill earlier this year, support had grown to include the employer-assisted housing proponent Metropolitan Planning Council; the Illinois Manufacturers' Association and home builders associations; unions, including the United Food and Commercial Workers, the Service Employees International Union and the Illinois AFL-CIO; and advocacy groups like the Illinois Housing Council and the Center for Tax and Budget Accountability (CTBA, a co-sponsor of Good Jobs First's Illinois project.)

In addition, companies seeking EDGE credits for projects at sites that do not initially qualify can receive additional credits if they submit an adequate site remediation plan. Plans can include measures like an employer-assisted housing plan, shuttle services, pre- tax transit cards, or carpooling assistance.