By DAN McCALEB
Rantoul Press columnist
With no warning, an Illinois community learned this week it is losing almost 1,400 jobs.
Is the decision by Fiat Chrysler to lay off 1,371 workers at its plant in Belvidere in north-central Illinois the result of hurtful policy positions by freshman Gov. J.B. Pritzker and Democratic supermajorities in the General Assembly?
The company isn’t saying that, but the automaker simultaneously announced it is investing $4.5 billion at its Michigan-based plants and creating 4,500 new jobs there.
Illinois’ loss is Michigan’s gain.
And that should make anyone with an interest in the future of Illinois’ economic health to take pause.
For decades, Illinois state government promoted policy positions that created a poor business and jobs climate here. That’s no secret.
The state has the second highest property taxes in the country; the highest workers compensation costs in the Midwest in part because of the state’s abusive legal climate, labeled a judicial hellhole; and a burdensome regulatory climate that hinders small-business growth.
As a result, Illinois’ economic outlook lags behind other states despite the booming national economy.
"Although the economy has strengthened compared with the previous few years, Illinois still trails the rest of the country in most gauges of economic performance," Moody’s Analytics says in its latest State of Illinois Forecast Report, released this month. "Employment is increasing more slowly than the Midwest and U.S. averages, the labor force is near its lowest point in more than 10 years, and weaker consumer demand than in other states is weighing on population-dependent industries such as retail, leisure/hospitality and real estate."
Illinois’ jobs climate is bad. It could be getting worse.
This month, Pritzker signed legislation that will raise the state’s minimum wage incrementally to $15 an hour by 2025, despite warnings from downstate business owners that it will result in widespread job cuts.
Since then, the owner of Hopper’s Poppers in Sycamore said he was closing his popcorn store and looking to relocate out of state because he can’t afford the new expense. And the owners of a seasonal business in Wood River decided it also had to shut down and lay off six employees for the same reason.
These are just two small examples in two different regions of the state, but they appear to be omens of things to come.
What happens if Pritzker is successful in having the state’s constitution changed to allow for a progressive income tax? The state’s flat income tax of 4.95 percent is the one advantage it has over its neighbors. A progressive tax will mean higher tax rates for higher wage earners, resulting in tax hikes for middle class families and small businesses.
"Gov. Pritzker’s progressive tax is really a jobs tax," state Rep. David McSweeney, R-Barrington Hills, said. "Small businesses create 80 percent of the jobs in the state.
... Any basic economy theory is going to say that more taxes and more regulations are going to kill jobs. ... I’m really concerned with the direction we’re heading in."
Fiat Chrysler’s decision was at least months in the making and not a knee-jerk reaction to anything that happened since Pritzker took office. But the governor has been talking about a $15 minimum wage and progressive tax for well over a year. He ran on the initiative, and made no secret of his intention to force businesses to increase wages.
Prosperous business owners today want to remain prosperous business owners a few years from now. Business owners believe their companies will be ongoing concerns, and make the adjustments necessary to stay ahead of known expense drivers. They pay attention and plan accordingly.
Decision-makers in Springfield need to start paying attention as well.