Illinois leaders: Stop pushing for big government, start helping small businesses

Having access to meaningful work is one of the most important factors for families deciding where to plant roots. But since the onset of the pandemic, it’s been increasingly hard to find work in Illinois.

The state had one of the worst job recoveries from COVID-19. In total, Illinois has only 15,400 more jobs than in January 2020, a 0.25% increase nearly five years later. Only 500 of these are private-sector roles. The other 14,900 were government jobs.

That is to the detriment of workers. About 340,000 Illinoisans are looking for work, and the state has the third-highest unemployment rate in the nation at 5.2%.

Workers are struggling because private businesses are struggling. The only industry not struggling? The government. Illinois state government is the single-largest employer in the state, and the federal government is the second largest. Taxpayers and businesses, on the other hand, are subjected to skyrocketing property taxes and state tax burdens to cover the growing number of state employees and worsening pension crisis.

It’s time lawmakers made it easier for businesses to operate in Illinois. Illinois must make changes to attract more private-sector jobs and job creators, or we risk propping up a vicious cycle of increasing government jobs and imposing higher taxes to pay for it.

Why is this happening? Illinois has created one of the most business-unfriendly environments possible. We have the second-highest corporate income tax rates in the nation. Our property tax rates are the second-highest in the country. Our tax code is a nightmare for businesses, especially small ones, and residents. Last year, Gov. JB Pritzker added $1.1 billion in new tax hikes, mostly on businesses.

These high taxes are driving people and businesses away. The city of Chicago has seen renewals and applications for business licenses plummet during the past 10 years, and the office vacancy rate downtown is at a record high. More and more Illinoisans are relying on the government for employment, driving up costs for the remaining residents.

Fixing the problem starts with giving small businesses a chance to compete. While the government has thrived, Illinois’ private sector has struggled to grow jobs since the pandemic. Small businesses in Illinois are the leading job creators in the private sector. They have been our lifeline but can’t keep pace with the government’s growth.

Illinois lawmakers can start by cutting frivolous, expensive occupational licensing requirements. These hurt entrepreneurs by making it more difficult to qualify for work and put additional hiring restrictions on small businesses.

Lawmakers must reduce Illinois’ restrictive administrative code. Illinois has 282,000 instances of restrictive language in its administrative code that limit business and other activity. The national average is just 135,000. The state should cut back many of these rules, which make it difficult for businesses to operate.

However, the biggest change Illinois can implement to help struggling businesses and residents is to lower the tax burden — starting with property tax rates. Our current rate is 1.93% of a property’s value per year, well above the national average of 0.9%. Illinois’ pension crisis drives up spending and taxes. To curb that trend, Illinois leaders must put on the ballot constitutional pension reform that protects already earned benefits, while allowing for changes to future benefits. It also means lawmakers must reject using new taxes and tax hikes to balance the growing state budget.

Illinois has a diverse economy and is a great location for businesses and residents looking to plant roots. But poor government policy is strangling economic growth with high taxes and unnecessary regulations.

To state leaders: Stop growing the government too quickly. Remove roadblocks that prevent businesses from growing. If we don't make changes now, we'll continue to lose jobs, lose businesses and lose Illinoisans to states that treat businesses and taxpayers better.

• Matt Paprocki is the president and CEO of the Illinois Policy Institute.