Five steps could return Illinois’ economy to viability
State must be more friendly to business interests
It’s several days past New Year’s Day, but it’s not too late for a New Year’s resolution.
Gov. Pat Quinn and legislative leaders should dedicate themselves this year to a single purpose – setting up an environment that will make the state a job-creating machine.
The state is blessed with natural resources, transportation, and workers. However, it is hampered by an attitude toward businesses that borders on hostile: too many regulations and too many taxes and fees. The result is job growth that lags behind the rest of the country, giving bordering states an advantage.
In fact, the state is last or near last in job growth for the last decade, depending on which study you use. And job growth, which results in more people paying taxes rather than people just paying more taxes, is the key to the state’s economic recovery.
So, here are five steps Quinn and the General Assembly should take in the next year:
n Pension reform: This doesn’t directly affect jobs, but if the problem isn’t solved in the next week, it will weaken any other attempts. The current pension system is simply unsustainable without squeezing government spending and imposing more taxes. Higher taxes are a known jobs killer. This issue has to be solved.
n The minimum wage: There are suggestions that Illinois should increase its already high minimum wage. In reality, the minimum wage should be reduced, but at the least leave it where it is. The state’s minimum wage is higher than any of the surrounding states. Although raising the minimum wage is hard to oppose, it actually forces more workers out of the system and discourages new investment in the state.
n Workers compensation: This continues to be a problem for the state when it comes to adding jobs. Doug Oberhelman, the CEO of Caterpillar Inc., has stated often that in nearly identical factories in Illinois and Indiana, the workers compensation costs will be double in the Illinois plant.
n Taxes: Businesses will pay their fair share of taxes and fees, but it has to be fair. Many businesses feel, with justification, that the state’s tax and fee system is unfair. The General Assembly could improve that situation, but at a minimum, additional taxes or fees should not be adopted. In addition, the state needs to take a look at the regulations it imposes on businesses and make sure they are reasonable and necessary.
n Encourage new businesses: A recent study by the Illinois Policy Institute shows that the main driver for jobs is new businesses opening. Illinois has been last in the nation in that category over the last several years. New businesses are fragile and can need some help in getting started. The state needs to develop more programs that help new businesses – many of them small – get started and become successful.
That’s a short list, but much of it will be politically hard to accomplish. The result, however, will be a growth in jobs, which is the ultimate solution to the state’s financial issues.