Illinois leaders should resolve to foster economic reform in 2023

If the Illinois business community needs one New Year’s resolution from its political leaders in 2023, it’s this: stop relying on short-term gimmicks to drive business growth and build on the need for long-term structural changes that businesses need. Attracts, encourages entrepreneurship, take action. And draw the inhabitants.

It is clear that a quick fix will not help our government. Illinois is suffering from one of the worst unemployment rates in the nation and one of the worst economic recoveries from the COVID-19 pandemic. For the ninth year in a row, Illinoisans have sought better opportunities in other states.

Illinois’ failure to woo manufacturers in the EV industry shows the limits of offering short-term solutions like tax incentives alone. When Illinois Gov. J.B. Pritzker signed the Electric Vehicle Rebuild Act of 2021, the governor hoped the package’s tax credits for electric vehicle and parts manufacturers would help Illinois “become one of the leading electric vehicle hubs in the nation.” The country will become Since then, as WTTW reported, only one parts manufacturer has signed a contract under the law.

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Similarly, reliance on temporary federal funding for business development programs continues to this extent. At the end of 2022, the U.S. Treasury announced $354.6 million in federal funding to support four state small business credit programs designed to help small and minority-owned businesses in Illinois, to capitalize get access Although these programs may help entrepreneurs get their business off the ground, short-term funding is no guarantee that they will survive and thrive in Illinois’ overtaxed and overregulated environment.

Business owners deserve more. Especially considering the many obstacles they face trying to grow in Illinois.

More entrepreneurs apply to start up but then don’t open a business in Illinois than any other Midwestern state. In 2021, Illinois received more new business applications than any other Midwestern state, but only 6.7 percent of those applications were expected to result in business formation within a year of application.

That means Illinois has a poor track record of turning applications into actual businesses that offer jobs. Something unique about the Illinois process hinders entrepreneurs.

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There are so many compounding costs for the state that it creates challenges. Illinois is the third most burdensome regulatory code in the United States with 278,475 individual restrictions and requirements. And the state recently raised its high unemployment taxes in an effort to fill the unemployment trust fund — a forced fallout from the mismanagement of federal COVID-19 relief aid.

Structural reforms that lower taxes and reduce regulation will give all Illinois businesses the freedom to thrive as they begin and continue to grow.

Where do we start?

Political leaders can focus on quick fixes and take clear steps to identify outdated and difficult-to-repeal regulations. Shortening Illinois’ costly regulations frees up resources that small business owners can use to reinvest in their businesses.

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Next, pension and wealth tax reforms provide a guarantee of security for businesses looking to invest. These reforms will also help them attract and keep talent here. Adopting a harmless pension reform plan would preserve the government’s pension promises to current workers and retirees while allowing future benefits to be adjusted. This could streamline the state’s finances and help lower property taxes.

Finally, the property tax moratorium prevents local governments subject to the Property Tax Extension Limitation Act from raising property tax increases without voter approval. This will put limits on government spending so that businesses and workers can find stability.

Long-term structural reforms are necessary to help Illinois’ short-term economic development plans achieve the business growth they promise. We have an opportunity to make 2023 the year of growth in Illinois, but our elected leaders must find their resolve.

• Matt Paprocki is president of the Illinois Institute of Politics, a nonpartisan research organization.


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