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Survey: Illinois’ small business owners say state has failed them

Illinois budget (MGN)

Illinois’ small business owners say the state’s business climate is worse than any other in the nation.

Online services company Thumbtack has released the results of its annual small business survey of thousands of member businesses. Thumbtack interviewed more than 7,500 small businesses across the country, including more than 200 in Illinois this summer. The feedback was not pretty.

Business owners in Illinois gave the state an “F” on overall business friendliness. The state’s poor grades put it at 50th out of 50, worse than previous years.

Lucas Puente, lead economist with Thumbtack, said the state did better last year in terms of businesses’ opinion of training and networking availability.

“Where [the state] did well last year, that’s no longer true this year,” he said. “The most important thing for state and local lawmakers to do is to just listen to their constituents and small business owners in their communities.”

Three out of four small business owners in Illinois said they thought the state was more interested in attracting large corporations than listening to the needs of small businesses. Those numbers were similar across the nation but more pronounced in states that are vying for Amazon’s HQ2.

“Seventy-nine percent of our respondents chose that option while only 21 percent said supporting local small businesses was the top local economic development priority,” Puente said.

The comments were predominantly centered around the state’s tax burden as well as local property taxes driving out customers.

“Illinois has a great deal of issues with businesses and people leaving the state at such a great rate,” the owner of a steam cleaning business in the Champaign-area told Thumbtack, adding that the income tax hike enacted by state lawmakers will “further chase residents and businesses out of the state.”

Illinois lawmakers passed a permanent 32 percent increase on personal income taxes, something that often hits small businesses the hardest since many file as pass-throughs, paying income taxes via their owner’s personal rate.

Others told Thumbtack that the state puts up too much red tape for businesses to thrive.

“I feel like they make it difficult to start a business by imposing so many licenses and permits,” an HVAC technician from South Holland told Thumbtack.

Gov. Bruce Rauner signed an executive order in 2016 with a goal of cutting red tape in state government by 25 percent.

The states that received at least an “A-” grade were both Republican and Democrat controlled, according to Thumbtack. The states that were given “A+” marks – Utah, Tennessee, South Dakota, and Michigan – all have majority Republican legislatures. Alaska, which also received an “A+,” is a coalition government.