May 13, 2015

SPRINGFIELD (May 13, 2015) – On Tuesday, Judge John M. Madonia of the Sangamon County Circuit Court dismissed a lawsuit challenging excessive tax credits to certain businesses in Illinois. The Liberty Justice Center, which filed the lawsuit on behalf of Illinois taxpayers, plans to appeal the decision to the Illinois Fourth District Court of Appeals.

Like many other states, Illinois regularly awards tax credits to attract and keep businesses and jobs in the state. Illinois has a law that allows tax credits for companies that create new jobs. However, for more than a decade the state agency that hands out these tax credits has exceeded the authority of the law by awarding credits for jobs “retained” – not created. In January, the Liberty Justice Center filed a lawsuit asking the courts to end this practice. At stake in the lawsuit are millions of dollars in excessive tax credits.

On Tuesday, Judge Madonia dismissed the lawsuit, ruling that taxpayers do not have standing to challenge DCEO’s regulations and awards of tax credits. According to Judge Madonia’s ruling, only the state’s attorney general can challenge DCEO’s actions. However, the attorney general has never attempted to do so. Judge Madonia did not address the merits of the taxpayers’ claim — that is, he did not rule on whether DCEO has violated the law by authorizing and awarding tax credits based on retained employees rather than new employees.

“State law authorizes DCEO to award EDGE tax credits for new jobs in Illinois, not to give money to companies that are already in Illinois for people they already employ here,” said Jacob Huebert, senior attorney at the Liberty Justice Center. “DCEO has attempted to rewrite the law, which it does not have the authority to do. A government agency cannot expand its power by enacting rules that contradict a law passed by the General Assembly. We will appeal this decision to ensure that DCEO follows the law and respects the rights of ordinary taxpayers who cannot get special tax-credit deals.”

MEDIA CONTACT: Nathaniel Hamilton or Diana Rickert

media@illinoispolicy.org or (312) 607-4977