Auto parts company to create 100 new Illinois jobs for $1.2M in tax breaks

Following $3.7 million in EDGE tax credits Illinois awarded the company last year, Flex-N-Gate is set to receive a $1.2 million tax break to boost its Danville workforce.

Auto parts company Flex-N-Gate will double the size of its 60,000-square-foot plastics plant in Danville, a project that will come at the expense of Illinois taxpayers.

The company will add “at least 100” Illinois jobs, according to the News-Gazette, in exchange for $1.2 million in tax credits through the state’s Economic Development for a Growing Economy, or EDGE, program. The project is estimated to cost roughly $20 million.

Flex-N-Gate previously received $3.7 million through EDGE last year to build a plant on Chicago’s South Side, according to the News-Gazette, which is expected to be operational by 2019. That EDGE agreement will require the plant to provide nearly 300 jobs over three years.

While more jobs for Illinoisans is a positive development, awarding tax breaks to select companies should not be considered a path to long-term growth. Tax revenue lost to such incentive programs must ultimately be found elsewhere, shifting the burden downward onto taxpayers and small businesses.

Moreover, special incentive programs do not guarantee jobs will remain in Illinois. For example, rail company Nippon Sharyo recently shuttered its Illinois plant, despite having received over $10 million in subsidies and tax credits from the state since 2010.

A substantial portion of new jobs in Illinois are created by small businesses – those with 50 or fewer employees. Most of those businesses, however, are forced to weather the state’s unfriendly business climate without special tax breaks. State lawmakers should work to enact pro-growth reforms that improve the state’s business environment for all employers, rather than granting special favors to larger companies – at the expense of others.