(Illinois News Network) — Nov. 25 marks the arrival of Small Business Saturday across the nation. And Illinoisans have a lot to appreciate. For all the talk of big-box dominance, mom and pop shops are the Land of Lincoln’s economic workhorses.
Businesses with fewer than 50 employees created the vast majority (75 percent) of net new jobs in Illinois last year, according to the Bureau of Economic Analysis. And during the economic recovery from 2011 to 2016, businesses with fewer than 500 employees created 79 percent of net new jobs in Illinois.
So why are they treated so poorly?
Of course, state lawmakers all pay lip service to the entrepreneur. But the clichés of touring a local factory, picking up coffee at the corner store and attending ribbon-cuttings haven’t been enough.
It’s the votes that count.
In 2017, those votes too often fell against Illinois men and women trying to keep small businesses afloat. Their largest policy problems were left unaddressed. And lawmakers piled on even more.
The year started with Illinois businesses paying among the highest property taxes in the nation and the highest workers’ compensation costs in the region. Plus, deep fiscal problems at the state and local levels created fear of further tax hikes.
Not to mention a state administrative code containing more than 250,000 regulations, double that of what businesses face in neighboring Missouri and Kentucky, according to Mercatus Center research.
Lawmakers didn’t tackle any of those issues. And fears of tax hikes came true. But there’s little reason not to fear more in the near future, especially as talks of a progressive state income tax heat up. Tax policies sold as soaking the rich almost always wind up whacking small businesses, too.
For Illinoisans unsure of how to judge the small-business friendliness of their elected officials in Springfield, the following litmus test should suffice:
If your lawmaker voted for the largest permanent tax hike in Illinois history without reform this summer, that’s not friendly.
If your lawmaker won’t touch the cost-drivers behind some of the nation’s highest property taxes, that’s not friendly. Those drivers include pension costs, collective bargaining powers that stack the deck against taxpayers and overlapping, duplicative units of local government. One helpful tell is if the lawmaker touts his or her vote on a property tax freeze that was either never voted on in the opposite chamber, or was so full of exemptions it would do next to nothing to stop tax bills from rising.
If reforms to lower costs in Illinois’ workers’ compensation system are off the table, that’s not friendly. Playing nice with trial lawyers doesn’t count.
The uncomfortable truth is that no matter how many hands they shake, most General Assembly members aren’t really friendly to small businesses.
So it’s no wonder that the last decade has been especially brutal on the sector hit hardest by the issues they refuse to address: manufacturing.
Since December 2010, Illinois has created a mere 4,500 manufacturing jobs, according to the Bureau of Labor Statistics. Wisconsin is up nearly 44,000 manufacturing jobs since then. Indiana’s added more than 78,000.
Illinois continues to nibble around the edges on this issue. Instead of ensuring a fair and level playing field by passing laws to spur growth for all of the state’s businesses, officials simply dole out tax breaks to the biggest players.
That’s not small-business friendly.
Meanwhile, adopting pro-growth policies that have seen success in neighboring states, such as a right-to-work law, is considered heresy by House Speaker Mike Madigan and his caucus. Right to work means a worker cannot be fired for refusing to pay money to a union.
This remains the case even as Toyota-Mazda recently passed up Illinois for a new 4,000-job plant, thanks in part to the state’s lack of a right-to-work law.
And Illinois labor leaders may want to notify their members that the Hoosier State is growing union jobs faster than Illinois. Just food for thought.
Small business owners know that to succeed, their actions must match their words. Deliveries need to be on time. The product needs to function as advertised. And everyone must be held accountable for his or her mistakes.
State lawmakers touting their small-business bona fides should be held to the same standard.
Austin Berg is a writer for the Illinois Policy Institute. Berg’s award-winning work has been featured in the Washington Post, Chicago Tribune and Chicago Sun-Times, and he has appeared on ABC 7 Chicago and WTTW. Berg was also the writer of the documentary film “Madigan: Power. Privilege. Politics.”
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