April 2, 2003
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Illinois associations warn legislators:
Leave tax incentives alone
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The Illinois State Chamber of Commerce and the Chicagoland Chamber of Commerce released a study on Tuesday showing that, despite the recession and sharp drop in corporate profits, the tax burden on Illinois business has grown 20 percent since 1999.
The study also shows that business now pays nearly 50 percent of total state and local taxes, significantly more than the national average of 41.3 percent. The report states that legislative proposals to change the corporate income tax that ignore the overall tax burden are likely to exacerbate an already significant Illinois business taxation.
"We're delivering a strong message to legislators: business is not a bottomless well," said Douglas L. Whitley, president and CEO of the Illinois State Chamber of Commerce. "Business finances in Illinois are already squeezed. Yet, lawmakers continue to propose legislation that will raise the cost of doing business here in Illinois. Doing so will only kill jobs and set up Illinois -- once again -- for a bad business climate."
The report, "Illinois State and Local Business Tax Burden," was commissioned by the Illinois State Chamber of Commerce in partnership with the Chicagoland Chamber of Commerce and prepared by Ernst and Young. The study was unveiled the during a news conference at the state capitol on the eve of the 2003 Illinois Business Summit, during which hundreds of business leaders from across the state converge in Springfield to discuss the state budget crisis and to meet with state legislators.
"Our lawmakers need to consider the current business climate before eliminating important tax incentives," said Jerry Roper, president and CEO of the Chicagoland Chamber of Commerce. "Illinois companies are paying their fair share and already struggle with ballooning property taxes, workers compensation expenditures and the rising cost of health and unemployment insurance. And, many of our members tell us they have been unable to raise prices for several years."
Greg Baise, president of the Illinois Manufacturers' Association, endorsed the Illinois Chamber's message to legislators. IMA members met with lawmakers today to encourage pro-jobs and pro-growth tax policy.
"It is a simple equation: fewer employers mean fewer jobs," said Kim Clarke Maisch, Illinois State Director for the NFIB. "Small business owners hear a lot of rhetoric about their importance to Illinois' economy, yet by eliminating key tax incentives the legislators are sending the opposite message. In many cases, elimination of these tax incentives could close doors and cost jobs."
Key findings from the report include:
- Combined Illinois state and local business taxes have grown significantly over the last decade. These taxes have increased from $12.1 billion in FY1992 to $21.5 billion in FY2002, an average growth rate of almost 6 percent a year.
- Despite low corporate profits, corporate taxes have increased 20 percent over the past three years.
- The combined Illinois state and local business tax burden is significant and could harm state competitiveness. Illinois lawmakers should carefully evaluate how Illinois' tax structure affects economic development.
- Any business tax legislation considered in response to the budget shortfall should be evaluated in the context of the longer-run business tax policy and economic development objectives of the state.
For a full copy of the report, visit the Illinois State Chamber of Commerce's Web site at www.ilchamber.org. PR
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