Illinois' business climate needs work

 
Updated 1/26/2011 4:02 PM

"Escape to Wisconsin" used to be a lighthearted call to Chicago-area residents to visit the outdoor playground to the north. These days, it's more like a war cry.

Since the Democrat-led General Assembly and Gov. Pat Quinn raised taxes, leaders in Wisconsin and other states have turned up the volume to lure businesses from Illinois. Knowing how frustrated employers must be by the growing costs, they're ready to deal.

                                                                                                                                                                                                                       
 

Wisconsin -- despite rates, as Senate President John Cullerton has pointed out, that are higher than Illinois' -- is poised to offer a two-year tax moratorium to any relocated company. The mayor of Indianapolis bought a full-page ad in the Springfield paper urging merchants to cross the border. Even New Jersey -- with its own financial problems -- has hit the airwaves courting Illinois business owners.

Meanwhile, Illinois remains 48th in job creation while it wallows in a $13 billion deficit. The increase in the corporate income tax from 4.8 percent to 7 percent was a sign of desperation. Now that the deed is done, lawmakers need to get to work. They've sent a message to the nation that Illinois is the "dysfunctional family down the block" (as voiced by Gov. Mitch Daniels of Indiana), and it's time for corrective therapy.

For one thing, as infuriating as its increases are, Illinois can't let surrounding states turn our misfortune into their public relations victory. Cullerton provided a model when he quickly called out neighboring states for their opportunism. In addition, legislative action should recognize that taxes are only one of many considerations for companies looking to relocate or expand. Businesses also weigh factors such as worker compensation laws. Illinois' laws could be more business friendly -- can there be action on that?

State officials also can create incentives when big businesses come calling. Quinn did plenty of that last year while on the campaign trail. He should keep the door open to more jobs.

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The licensing process for move-ins needs streamlining. Republican Rep. Robert Dold of Kenilworth recently told of a company that chose Indiana over Illinois because it would take days instead of months to get an operating license. Such roadblocks give the impression that Illinois doesn't want the business.

A crackdown on collecting online sales tax is another way to entice Illinois merchants to stay. Lawmakers passed a bill requiring Internet retailers that sell through in-state businesses to collect taxes. Brick-and-mortar merchants are squeezed by competitors who do not charge an online sales tax. The governor should sign this bill.

The Illinois jobless rate dipped in December for the second straight month. Lawmakers must be looking for ways to ensure that downward trend continues and businesses don't find it necessary to escape Illinois.