Right now, doing business in Illinois is hard. And not just because of COVID-19.
At a time when most legislatures are helping their state’s businesses survive the pandemic, Illinois lawmakers are actively working against private industry and job creation. The Prairie State has become a breeding ground for “stacked costs” – bad government policies that either directly or indirectly raise costs for businesses.
And the costs keep stacking.
For example, you may have heard of the recent passage of Senate Bill 2048, which seeks to phase out carbon emissions from the energy sector over the next two decades and achieve 100% carbon-free energy by 2050 – the most aggressive state energy bill to date.
While this might sound like a decent goal, there is a real chance the Illinois economy could crumble before we see any of the bill’s lofty goals come to fruition. Energy costs on businesses are projected to outpace any previous increases on record, leading to widespread layoffs and business closures.
More directly, last year alone, businesses saw $655 million in new tax burdens added to their costs at the height of their COVID-19 pandemic struggles. The worst of these new taxes delayed business loss deductions for three years.
So, at a time when more businesses were reporting losses than any time in modern history – naturally making them unable to pay higher taxes without significant consequences – the governor ignored the struggles of businesses and decided to punish them instead.
The sad truth is that COVID-19 has been a political opportunity for the governor and his legislative allies, rather than a time to put agendas aside and guide our state through this crisis. So instead of pausing his administration’s agenda – supposedly “infrastructure and a balanced budget” – he pushed right on through. What makes it even worse is that it was all for nothing. Despite the new tax revenue and $8.1 billion in federal funding, 2021’s budget still came in underfunded by nearly $500 million.
And we haven’t even gotten to Illinois’ anti-business legal climate yet, which is shocking considering we were just ranked the country’s 5th worst Judicial Hellhole according to the American Tort Reform Association’s (ATRA) latest report. Stacked costs come in many forms, and our state’s legal policies might just be the most malicious.
For instance, recently-signed Senate Bill 72, the Prejudgment Interest Act, puts defendants on the hook for six percent interest on future damages the day a lawsuit is filed – before they even have a chance to defend themselves in court.
This especially ostracizes small- and medium-sized businesses who struggle to afford expensive legal fees in the first place. No matter the merit of a case, or whether a lawsuit is even filed, the mere threat of legal action from plaintiff’s attorneys forces many businesses to settle rather than risk a loss in court that could bury them for good. This forces businesses to allocate more of their dollars to legal defense – costing jobs and raising prices – while incentivizing trial attorneys to sue to their hearts’ content. After all, if a case isn’t tossed out, they are all-but-guaranteed a settlement.
Last but certainly not least, Illinoisans will vote on a ballot measure in November that would constitutionally ban “right to work” laws in our state. In every state such a measure is enacted, jobs are lost, prices go up, benefits are reduced, and workers are stripped of a choice when it comes to joining unions or pursuing their own agreements with employers.
This country kicked off 2022 with record inflation, a troubling labor shortage, continued supply chain issues, and a fresh spike in COVID-19 cases. It seems logical that state politicians like state Sen. Rob Martwick and Gov. Pritzker should bend over backwards to support jobs and employers, rather than adding to their struggles. Instead, new costs just keep coming for Illinois businesses, which only leaves us to wonder: at what point does our economy eventually break?
If lawmakers don’t reverse course soon, the damage could be beyond repair.
