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
Rauner signs bill to change ‘arcane’ state liquor control act, gives back local control
It will now be up to local officials as to whether they want a bar next to a church, school, military facility or hospital, and Gov. Bruce Rauner says it’s a step in the right direction.
A post-Prohibition-era state law required businesses to go to the state legislature for a liquor license if the establishment was within 100 feet of certain places such as schools or churches.
Small Business Advocacy Council President and Founder Elliot Richardson said that would take six months and wasn’t a guarantee.
“This archaic 1934 law is going to be changed, and the result is it is going to spur economic development in the city of Chicago and throughout the state,” Richardson said just before Rauner signed Senate Bill 2436 Thursday in a Chicago café. “Local communities are going to decide what’s best for them.”
State Rep. Sara Feigenholtz, D-Chicago, said one business had to wait a year to get a bill through the state legislature to get a liquor license. She said it didn’t make sense to require farmers in southern Illinois to sound off on a liquor license request for a Chicago business.
“Sixty-eight pages of the 72-page liquor control act are exemptions,” Feigenholtz said. “Today, we end that.”
She sponsored Senate Bill 2436, which passed with large bipartisan support.
Rauner said he has pushed hard to give control back to local governments since he took office in 2015.
“I actually vetoed two license requests to try and force the change because business was being browbeaten to come to Springfield,” Rauner said. “I said, ‘stop this, no more.’”
Rauner, without naming names, said some state politicians used the 1934 state law to play politics or to get campaign contributions.
The governor said he hopes the new law encourages lawmakers to return local control on other issues.
“If we do the same thing that we do with this for things like consolidating local governments or streamlining procurement or competitive bidding or contracting, get Springfield off the backs of local communities, we’ll bring down our property taxes and we’ll grow even more jobs,” Rauner said.
Although he didn’t mention the idea at Thursday’s bill signing, Rauner has in the past pushed what he called “empowerment zones,” or giving local elected officials the power to manage labor laws such as prevailing wage.
Article by Greg Bishop, Illinois News Network. For more INN News visit ILnews.org
New free-market consulting firm opens in Springfield
Fighting poverty is often seen as something that governments or non-profits do. Entrepreneurs in low income communities often turn to these resources for help starting or developing their businesses. But a new Springfield consulting firm is trying a different approach. KC Community Consultants is looking at how free market principles can help low income communities fight poverty.
Kelvin Coburn started KC Community Consultants because of the failures he has seen in the existing efforts to fight poverty. During his ribbon cutting speech, Coburn spoke about the need to develop local talent, and to give a voice to local leaders who have been successful. He also condemned the “bigotry of low expectations,” which holds back lower income communities by not expecting success. His plan is that KC Community Consultants can be accessible to the community and develop local businesses and talent. By being a for-profit business rather than a nonprofit, he hopes to avoid the issues that often arise for nonprofits.
Owner Kelvin Coburn was joined by the Springfield Area Chamber of Commerce for a ribbon cutting this morning. You can watch Coburn’s full speech in the player.
You can learn more about their services on their website https://www.kccommunityconsultants.com
Davis discusses economic growth, tariffs at Roland Machinery
Roland Machinery is a Springfield success story. Starting over half a century ago, the company has spread to more than dozen locations across the Midwest. Roland deals in heavy machinery, and works with firms from around the world. Their contribution to the local economy, as well as global ties, made them a fitting place for Congressmen Rodney Davis’ (R-13) to talk about the pressing economic issues of the day.
The booming economy has been good for Roland. The combination of tax cuts, falling unemployment, and increased consumer confidence have driven growth for the company. They are doing more business, and are able to reinvest more because of the strong economy.
But the growing trade conflict with China and others poses some risks to their continued growth. Rising steel prices has impacted some of the attachments to the larger machines. Digging buckets are solid steel. When the price of steel goes up, so does the cost of the buckets. Such attachments are often only a small percentage of the total price of a system; but when the price jumps by 20 to 50 percent, it becomes far more noticeable. And because there are in a global supply chain, trade disruptions can pose unforeseen risks. However, Roland is confident that as long as the economy stays strong, they can manage any new costs.
The tariff balancing act
Rodney Davis then spoke about the current tariffs and their impact on Illinois farmers. Although not explicitly aimed at Illinois, any tariff on soybeans is going to heavily impact Illinois. Chinese tariffs on soybeans alone may end up costing American farmers billions. But soybeans are not the only trade issue from Davis’ district. The American steel industry, including in plant in Granite City, suffered from Chinese trade policy. Protecting American businesses from unfair Chinese practices is part of what has contributed to the current trade conflict.
The farmers’ unexpected politics help simplify Davis’ dilemma. Many of the farmers who stand to be most affected by the tariffs supported President Trump during the election. And they supported Trump in part because of his stance on trade, rather than in spite of it. Davis said that the farmers who have spoken to him say they still trust in Trump’s ability to handle the trade situation, and that Davis should as well. Davis said he is willing to work with the president, but, “If the President asks us personally to trust him on these issues, then we need to see results.”
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