With the renewed Bureau-Putnam County Enterprise Zone and its success with industrial development investments worth billions of dollars, it makes sense it be continued and celebrated. However, it’s also a good idea to take a look at the other sides of the zone, particularly the education side.
The zone, managed by the Illinois Department of Commerce and Economic Opportunities, covers 12.5 square miles and could be expanded by an additional 15. The zone assists the growth of industry by providing state and local incentives.
The renewed zone covering parts of Bureau and Putnam counties started on Jan. 1, 2017, and will officially end in 2031, but it could be extended to 2041.
One of the incentives offered since the zone’s beginning in 1987 is a near 100 percent, 10-year property tax abatement on industrial/commercial real property improvements, a 6 to 6.25 percent local and state sales tax deduction on locally-purchased building materials, and a “zone project only” 0.5 percent investment tax credit on qualified property/equipment investments.
Kevin Lindeman, economic director of the North Central Illinois Council of Governments, has asked officials of the area’s taxing bodies to consider passing renewed abatement resolutions by April or May to provide the continued benefits of the zone to companies which may have not received the full, 10-year abatement and which would also allow for the abatement for upcoming projects.
“During the life of the old Bureau-Putnam Enterprise Zone, there were more than 250 projects utilizing the zone with investments of almost $1.1 billion. The participation of the taxing bodies in the zone makes the region more competitive for business attraction and retention. Several taxing bodies have passed the resolution supporting the new enterprise zone and the extension. There have been a couple that we have heard are not supporting the new zone and the extension, and many are still considering the resolution,” Lindeman said.
Bureau County education
With the schools of the Illinois Valley collectively being owed several million dollars from the state and there being no sign of improvement, school districts within the enterprise zone have to consider the impact of tax abatement.
In 2015 the Spring Valley School District abated more than $12,000; the Hall High School District almost $24,000; the Princeton High School District more than $51,000; and the Princeton Elementary School District more than $77,000.
Bureau County Clerk Kami Hieronymus said the year-to-year abatement figures vary, but not by much. If the amounts held steady for the 10-year abatement, PES would likely abate more than $750,000 throughout that period.
PES is currently owed roughly $750,000 in mandated funding from the state, and Superintendent Tim Smith has previously said the district has lost more than $5 million in state revenue since 2007. He has said the district is generally supportive of the enterprise zone, but the funding problems did initiate some thought toward the abatement resolution.
“We do give up some revenue for the 10 years the new business is abated, but long term it is a win-win for our district and community,” Smith said, adding, “The local sacrifice is worth it because local funding is far more reliable than state funding, so despite the delay in realizing the EAV growth, once the property is on the tax role, the money is timely and consistent, unlike that of the state.”
Smith also said the jobs created by the growth will likely bring students into the district which would increase enrollment.
“A piece of the general state aid funding formula is calculated using enrollment numbers, so the more kids the better,” Smith said.
Putnam County education
While the school districts of Bureau County are abating sizable amounts of funding in order to help benefit local industry, the figures pale in comparison to Putnam County.
According to information provided by the Putnam County Clerk’s office, the Putnam County School District, which is currently owed more than $500,000 from the state, abated $1,019,827.15 in revenue in 2015.
The zone has been very successful in Putnam County with 15 projects being added by four businesses since 2005. The total investment of those projects is more than $355 million.
“Our school board is reviewing our options regarding the enterprise zone. The district is supportive, however with the state financial crisis and complete uncertainty surrounding school funding reform, the district needs to examine its options,” Superintendent Carl Carlson said.
Carlson added a potential property tax freeze and the discussion of pension costs shifting back on local districts would be devastating to the school’s current budget.
“Currently, we are gathering as much information as possible before making any final decisions,” Carlson said.
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Enterprising figures
Statistics from the Bureau Putnam Enterprise Zone
• Since 1990, Bureau County has had 18 projects involving 13 businesses with a total investment of $1,016,182,968.
• Since 2005, Putnam County has had 15 projects, involving four businesses, with a total investment of $355,412,284.
• Since 2005, the city of Princeton has had 39 projects, involving 27 businesses, with a total investment of $21,017,245.
• In 2012, the village of Granville had one project, PC Foods, with an investment of $1,250,000.
• Since 1987, the village of Ladd has had seven projects with an investment total of $1,562,120.
• From 1994 to 2002, the village of Mark has had four projects with an investment total of $5,358,319.
• Since 2005, the city of Spring Valley has had 15 projects with a total investment of $12,767,778.
Information provided by the North Central Illinois Council of Governments.