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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

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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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Illinois manufacturers, farmers eager for new trilateral trade deal

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Illinois’ manufacturing and farming communities are excited about the new trilateral trade agreement President Donald Trump announced between the U.S, Mexico and Canada. But the state’s leading manufacturers’ group says Illinois must address its poor business climate and farmers say the U.S. must continue making deals with other countries in the face of a trade war with China.

After months of trade uncertainty, Trump said Canada is now on board with Mexico to forge a new trade deal with the United States. He decried the North American Free Trade Agreement signed by the U.S. in the 1990s as a horrible deal and campaigned to get rid of it. On Monday, he said he’s fulfilled that promise.

Called the United States, Mexico, Canada Agreement (USMCA), Trump said it will make North America a manufacturing powerhouse.

“That means more auto parts and more automobiles will be manufactured in the United States,” Trump said. “We will be manufacturing many more cars.”

Illinois Manufacturers’ Association’s Mark Denzler said that’s great news for the state’s automotive manufacturers that employ thousands of workers. It’s also good news for chemical, pharmaceutical and food manufacturers, he said.

But Denzler warned Illinois could miss the boat if it doesn’t address the state’s negative attributes.

“Workers’ compensation, higher taxes, we’re looking at a graduated income tax for example, higher minimum wage, all of these things add up and make it more difficult to do business in the state of Illinois,” Denzler said.

Illinois has the highest workers’ compensation costs in the Midwest, and seventh highest in the nation. The state’s property taxes are also among the highest in the country.

For farmers, Trump said the USMCA opens up the North American marketplace to make things more fair and reciprocal.

“The deal includes a substantial increase in our farmer’s opportunities to explore American wheat, poultry, eggs and diary, including milk, butter, cheese, yogurt and ice cream,” Trump said.

Trump had long blasted Canada for having a nearly 300 percent tariff on U.S. dairy products.

While Illinois dairy products may take a backseat to dairy products from states bordering Canada, Illinois Farm Bureau President Richard Guebert said the trade deal is still great news. He said trade negotiations must now continue elsewhere.

“Let’s work on the other countries as well, the [European Union], Japan and build those markets knowing that China is going to be a little ways down the road,” Guebert said.

In an effort to curb what he called unfair trade practices and intellectual property theft, Trump has imposed tariffs on all kinds of Chinese products. China has responded in kind with no end in sight.

The USMCA trade pact must still be ratified by all three countries before it replaces the NAFTA agreement.

Article by Greg Bishop, Illinois News Network. For more INN News visit ILnews.org 

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Court upholds Illinois nuclear power subsidy law

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A federal appellate court ruling upheld Illinois’ law directing hundreds of millions of dollars in subsidies to nuclear plants and other green energy incentives.

The ruling from the Seventh Circuit Court of Appeals says that Illinois’ Future Energy Jobs Act, a 2016 law providing Zero Emissions Credits to Exelon, the owner of several nuclear plants in the state, doesn’t unfairly manipulate the multi-state energy market that establishes rates.

The challenge was brought by the Electric Power Supply Association, a trade group for power plant owners that includes Dynegy, which has since been acquired by Vistra Energy. Vistra owns coal-fired plants in Illinois. Vistra wasn’t immediately available to respond to the ruling or say whether it will appeal the decision.

In Vistra’s lawsuit, the company claimed the subsidies allowed Exelon to submit unfairly low rates in the wholesale auction.

The panel ruled that “the Commerce Clause does not cut the states off from legislating on all subjects relating to the health, life, and safety of their citizens…”

Exelon released a statement Friday saying the company was “pleased to see that the Seventh Circuit Court affirmed dismissal of the ZEC complaint, thus supporting the continued operation of Illinois’ ZEC program and the clean, resilient and affordable electricity nuclear power provides.”

State Rep. Sue Rezin, R-Morris, who has two nuclear plants in her district, said it was good for clean and renewable energy.

“Many states are trying to figure out what to do to keep the nuclear plants online,” she said. “This opinion that just came out sounds like a step in the right direction.”

Both sides had said Illinois jobs were on the line as they looked to influence lawmakers.

Exelon warned in 2016 that it would likely have to close two Illinois plants, one near Clinton and another near the Quad Cities, and cut 1,500 jobs if the subsidies weren’t signed into law.

Dynegy said its Illinois-based plants face an uncertain future if the courts upheld the FEJA. This would mean 1,000 jobs in southern Illinois, an area facing a dearth of higher-paying jobs.

The Future Energy Jobs Act will charge utility customers an average of $2 per month over the next decade, sending $236 million to Exelon annually. In turn for the credits, ComEd, Exelon’s energy retailer, would invest in green jobs training and provide discounts to needy ratepayers.

Article by Cole Lauterbach with Illinois News Network. For more INN News visit ILnews.org

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Davis, LaHood Announce Four USDOT Grants Investing in Local Airport Infrastructure

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PRESS RELEASE | U.S. Reps. Rodney Davis (R-Ill.) and Darin LaHood (R-Ill.) announced today that the U.S. Department of Transportation has awarded four local central Illinois airports with funding to invest in various projects ranging from runway rehabilitation, the purchase for ground operation equipment, and expansion of passenger terminals. Statements from the Congressmen, as well as details of the awards are below:

“Investing in our infrastructure is a critical part of growing our economy and that’s exactly what these grants will accomplish,” said Davis. “These four regional airports are essential to bringing economic opportunity to central Illinois and these grants will allow them to make necessary upgrades to improve service and safety. As someone who frequently flies in and out of central Illinois airports, I understand how important these continued investments are and I know my constituents will benefit greatly from these improvements.”

“Today is a great day for our local airports across central Illinois. With the latest awards from the U.S. Department of Transportation, these three local airports across central Illinois will have the ability to reconstruct runways, purchase new equipment to make ground operations smoother and safer during inclement winter weather, and expand a passenger terminal to improve the flow of passengers,” stated LaHood. “Air travel is a key economic driver for our local communities and I applaud the USDOT for their continued commitment to investing in our local transportation projects to help make travel safer, as well as more effective and efficient.”

The awards:

Central Illinois Regional Airport – $991,773
This project acquires one new and one replacement high-speed runway broom to keep the airport serviceable during snow periods and aid in the efficiency and safety of operations.

Abraham Lincoln Capital Airport – $1,995,173

This project expands the terminal building to approximately 6,100 square feet to meet Federal Aviation Administration design standards and enable efficient movement of passengers. Earlier this year in June, both LaHood and Davis announced that the Abraham Lincoln Capital Airport received $4.6 million in terminal upgrades. This grant is being increased from $4,628,998 to $6,625,171 and will allow for the final phase of upgrades to be completed.

Logan County Airport – $1,153,190
This grant includes discretionary funding for Logan County Airport to rehabilitate Runway 3/21

Decatur Airport – $1,567,562

This grant includes discretionary funding for Decatur Airport to rehabilitate Runway 6/24

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