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Small businesses see record profit growth but face headwinds in Illinois

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Springfield, IL News

Small businesses across the country are optimistic about the economy, but one expert says there could be dark clouds building in Illinois.

The new Small Business Optimism Index, issued by the National Federation of Independent Business, shows a record level of small businesses seeing profit growth. The number reporting poor sales fell to a near record low. Mark Grant, Illinois director of the NFIB, said, for now, the sentiment is shared here.

“I talk to our members quite a bit,” Grant said. “The vast majority of them feel very good about things. They see the same things every other small business around the country sees. They’re very enthusiastic and trying to grow and hire employees.”

That optimism is tempered by potential actions in Springfield that could affect small business owners, Grant said.

“They know there’s a good chance there could be more tax increases coming,” he said. “That’s what they are probably most concerned about. The state’s got an enormous pension debt. There’s always an appetite over at the statehouse to tax and spend … or pay off debt.”

J.B. Pritzker, the Democratic candidate for governor, has called for a temporary hike in Illinois’ flat income tax rate. He then wants lawmakers to work to change the state constitution to allow for a progressive income tax, which would include several different rates, depending on income. Grant said that could have consequences for many small business owners.

“The majority of small businesses are formed as pass-through entities, so they actually pay their business taxes on the individual rates,” Grant said. “They would feel the most significant impact from any kind of tax increase that would come from that graduated tax.”

Pritzker also supports raising the minimum wage in Illinois to $15 dollars per hour. Grant said that kind of hike would be a disaster.

“Our small businesses, from Rockford down to Cairo, Danville across to Quincy, could not afford that,” he said. “You can see what’s already happened in Cook County. There are lots and lots of municipalities that opted out of their $13 per hour minimum wage because they knew their business community could not sustain it.”

A bill to raise the Illinois minimum wage to $15 an hour by 2022 passed the Illinois Senate and House last year, but was vetoed by Gov. Bruce Rauner.

“I know our small business folks are always wary of government-mandated anything, but a government-mandated price hike on labor? A 70 percent to 80 percent increase, even over a two-to-five year period, that’s really tough for any small business to manage and stay healthy,” Grant said.

Grant said tax relief from Washington helped many accommodate the tax hikes that took effect last year in Illinois.

“The federal tax reform bill probably came at just a great time for them because of what the state was doing by increasing taxes on both the pass-through and the corporate side,” Grant said. “C-corps are paying close to that 10 percent number and that’s pretty expensive.”

Article by the Scot Bertram, for more INN News visit ILnews.org

Illinois News Network, publisher of ILNews.org, is a nonpartisan, nonprofit media company dedicated to the principles of transparency, accountability, and fiscal responsibility in the state of Illinois. INN is Illinois’ pioneering non-profit news brand, offering content from the statehouse and beyond to Illinoisans through their local media of choice and from their digital hub at ILNews.org. Springfield Daily was granted republishing permission by INN.

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SJ-R writers march for a contract

Thomas Clatterbuck

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2007 was the year President George W. Bush sent the “surge” of troops to Iraq, the iPhone was released, and the subprime mortgage bubble popped. It was also when writers at the State Journal-Register (SJR) last got a raise. Even after forming a union in 2012, the newsroom writers are still fighting to get their first contract with GateHouse Media. GateHouse Media is part of the New Media Investment Group, which acquired the SJR in 2007. They are based in Fairport, New York,

Today, members of the local United Media Guild marched to demand a labor contract. Those negotiations are ongoing in St. Louis, and have made some progress. A deal struck last year will guarantee a one percent raise in September of this year, and a 1.75 percent raise in October of next year. The marchers were joined by members of other local labor unions including AFSCME.

The local United Media Guild is part of The NewsGuild-CWA which represents 25,000 journalists and media workers across the nation.

You can see our interviews with Union representatives in the video player above, and watch some of the march in the player below.

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New Opportunity Zones coming to Central Illinois

Thomas Clatterbuck

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Hundreds of sites in Illinois are being made more business friendly thanks to new “Opportunity Zones.”  372 sites across Illinois were selected to receive special tax breaks to encourage private investments. These locations were chosen based on a number of factors relating to economic need. Many areas in Central Illinois received zones, including Springfield, Decatur, Champaign; as well as a number of smaller communities.

Rep. Rodney Davis (R-13) said, “Opportunity Zones, which were a key aspect of the tax reform package we passed, will continue to spur economic investment in areas that need it the most. During the recession, many of our rural communities were hit the hardest and have been the slowest to recover. The tax-free, private investments that will be a result of these Opportunity Zones will help create jobs and grow these communities. We’ve only just started to see the benefits from tax reform and because of provisions like this, we will continue to see tax reform help Americans at all income levels.” 23 of the new zones are located within the 13th.

State Rep. Avery Bourn (R-95) called the zones a, “great opportunity to bring jobs and investments in the 95th.” There are three zones located within the 95th.

Click the link to learn more about these zones and find areas near your community.

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Farm Bill fails in the House, Davis remains hopeful

Staff Contributor

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The 2018 Farm Bill was dealt a blow today with the House voting against it 198-213. No Democrats supported the bill, which called for new work requirements for SNAP recipients. Their opposition was not surprising, but was not enough to block the bill. They needed support from 30 Republicans to ensure the bill did not pass.

Those Republicans who voted against the bill are part of the Freedom Caucus. Their current opposition to the Farm Bill was part of a wider strategy to force a vote on immigration reform. They are trading their support for the Farm bill to ensure there is a vote on immigration reform. Head of the Freedom Caucus Rep. Mark Meadows said that this was not a “fatal blow,” and suggests that they are likely to support the bill in the future.

While this is hardly a new strategy, it has drawn condemnation from fellow Republicans. Rep. Rodney Davis had this to say:

“As someone who has worked with members from both parties, Democrat and Republican presidents, my message to my colleagues who voted against this bill is reminiscent of a Rolling Stones’ song: ‘you can’t always get what you want.’

“Tanking a bill critical to our farmers not because you disagree with the bill, but because you want a vote on something unrelated is wrong. Refusing to be part of the process because you think your party is going to win in November is wrong. It’s not what the American people sent us here to do. We were sent here to govern.

“In 2013, the farm bill failed the first time around, but we ultimately got a good bill signed into law. In 1996, President Bill Clinton and a Republican-led Congress passed welfare-to-work reforms, similar to the reforms in this bill. For these reasons, I remain optimistic that we can get a farm bill passed this year.”

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