TAX INCREASE TIED TO DISMAL EMPLOYMENT NUMBERS
The nonpartisan research organization Illinois Policy Institute drew a correlation between the dismal employment numbers and the state’s January tax increase, lack of government spending reforms, and the state’s massive backlog of unpaid bills.
“The policies currently in place – higher taxes, more spending, and unreformed liabilities – are clearly not working for those who are struggling to make ends meet,” said Kristina Rasmussen, executive vice president at the Illinois Policy Institute. “A great starting place for lawmakers eager to create an atmosphere of job growth would be to repeal the recent income tax increase, which robs families and businesses of resources they could put to better use.”
COMMITTEE LOOKS AT BUSINESS ENVIRONMENT
Efforts to better understand the state’s business environment prompted joint House and Senate hearings to examine the state’s business tax structure and available tax incentives. Hearings have taken place in Chicago, in Rockford, and in the State Capitol in Springfield on August 23.
Echoing testimony from the prior hearings, representatives from business and economic development organizations who attended the August 23 hearing indicated that the state’s inconsistent policies are a burden to employers.
According to witness testimony, Illinois’ tax policies are applied unpredictably, and the state’s ad hoc approach to tax policy and business development makes it difficult, if not impossible, for businesses to anticipate and plan ahead. This uncertainty makes employers hesitant to take on more employees or consider revenue-generating expansions.
ILLINOIS COMPANIES LEAVING
The media has been full of reports of threats by Caterpillar and Sears to move out of Illinois. Here are two businesses that are not threatening – they are LEAVING Illinois.
• A company named Modern Drop Forge will be moving one of their plants (and possibly their headquarters) from Blue Island, IL to Merrillville, IN. They will move 240 jobs and “the company plans to make a $17 million investment at the site.”
Modern Drop Forge Company was founded in 1914 and is headquartered in Blue Island, Illinois. In a March 28, 2011 CBS story, their CEO stated: “Illinois is becoming very, very unfriendly to manufacturers.”
• On August 23, a company named Lime Energy issued a press release stating they are moving their HQ from Chicago to North Carolina. The company is publicly traded on the NASDAQ.
“The clean energy firm, which helps industrial building owners, utilities and other customers reduce their energy consumption and carbon footprint, is moving its headquarters from Chicago, creating as many as 75 jobs over the next two years.” – 8/23 Charlotte Observer.
“The company’s CEO said Monday that the company is now hiring.” – WSOC-TV
MORE DISMAL BUSINESS/JOBS REPORTS
• Illinois’ unemployment rate has now gone up three consecutive months.
“The unemployment rate in Illinois jumped to 9.5 percent in July from a revised 9.1 percent in June, rising for the third straight month...The state’s jobless rate now exceeds the national rate, the first time that’s happened in 10 months.” – August 20, 2011, CBS-2 Chicago, “Illinois Unemployment Rate Rises for Third Straight Month”
• Illinois has lost 47,200 manufacturing jobs since January 2009.
January 2009 Illinois manufacturing jobs: 620,400. July 2011 Illinois manufacturing jobs: 573,200. – United State Department of Labor, Bureau of Labor Statistics, “Monthly Statewide Manufacturing Employment”
• Illinois actually has 353,800 fewer manufacturing jobs now than we did in 1990.
“For Illinois, five sectors have employment below 1990 levels. Compared to 1990 employment levels, Manufacturing has -353,800 fewer jobs, Construction is down -23,000 jobs, Information down -34,200 jobs, Trade transportation & utilities down -5,800 jobs, and Financial activities down -18,800 jobs.” – June 6, 2011, University of Illinois at Champaign-Urbana Regional Economics Applications Laboratory Report: May 2011 Illinois Job Index, page 5
• Illinois lost 709 manufacturing companies and 51,925 manufacturing jobs in 2009. 2010 details are unavailable.
January 11, 2010, Crain’s Chicago Business article by John Pletz, “Illinois manufacturing lost 52,000 jobs, 700 firms last year”
January 12, 2010 Northwestern University Meddill Reports article by Da Yan, “Illinois lost more than 50,000 jobs in manufacturing”
TOLLWAY BOARD INCREASES I-PASS RATES
The Illinois State Toll Highway Board voted August 25 to increase I-Pass rates from 40 cents to 75 cents. The revenues from the hike will finance a $12.1 billion capital construction and improvement program to update and extend the state’s tollway infrastructure. Tollway officials pursued the proposal to reduce congestion and improve safety and efficiency on the state’s tollway.
Prior to approving the plan, 15 public hearings were held in Cook and other suburban Chicago counties. According to tollway officials, nearly 2,000 people attended the hearing. Tollway officials also noted that of those attendees, 85.5 percent expressed support for the proposal. Another 9.5 percent were opposed to the plan, with 5 percent remaining neutral.
More information can be found at www.illinoistollway.com.