Taxes Drive Away Local Small Business
by Emily Dietrich A recent email from Jeff Hickman – General Manager of Cal Lab Co., Inc. – read: “Attached is just one more reason why we’re looking at moving to Indiana. I took these photos on my way in to work this morning.” Titled “Illinoid,” the pictures showed a whopping $0.37 difference between a...
by Emily Dietrich
A recent email from Jeff Hickman – General Manager of Cal Lab Co., Inc. – read: “Attached is just one more reason why we’re looking at moving to Indiana. I took these photos on my way in to work this morning.”
Titled “Illinoid,” the pictures showed a whopping $0.37 difference between a gallon of gas near Cal Lab ($3.67) compared to a few miles across state lines in neighboring Indiana ($3.30). This 11 percent increase drives up the cost of doing business in Illinois and takes money out of the pockets of Illinoisans.
Cal Lab would know something about this. As a unique, highly technical company, they specialize in calibration of test equipment and precision instruments. The company has grown and invested in the South Holland community for the past 28 years. Unfortunately, all this may change.
The high cost of gas isn’t the main reason Cal Lab have been actively seeking real estate in Indiana. Instead, Illinois’s overall tax burden has this small business fleeing for the border. Tax relief is their rallying cry.
“They keep raising taxes,” said Hickman. “What incentive is left to do businesses here?”
Before deciding to relocate, Cal Lab has been doing their homework. As a small company – employing 20 employees – Cal Lab doesn’t have the leverage of big business to weigh on Gov. Quinn for special tax breaks and incentives. Nor do they want them. This local business simply wants a fair environment where they can compete.
But Gov. Quinn’s 2011 tax hike has hamstrung the company. This year, they were deciding between hiring an additional full-time employee or purchasing more large-scale capital equipment. Both were in an effort to expand the enterprise. Instead of paying for additional employees or equipment, Cal Lab now has to set money aside to pay for additional taxes. This year alone, Cal Lab is projected to lose $33,401.63 to the corporate tax increase.
What’s more, property taxes have been eating a sizable chunk of the company’s revenues. In South Holland, Cal Lab is paying approximately $74,000 annually for its building. The draw of Indiana is profound. Hickman says, “We could purchase a much larger building in Indiana and pay significantly lower property taxes. With that scenario, I would anticipate paying $20,000 in corporate property taxes.”
Illinois’s high tax rates make the state downright uncompetitive. Annual wages and income for Cal Lab totals approximately $850,000. That’s good jobs for great people. A state that’s already badly in debt cannot afford to lose any more business. Unfortunately, Cal Lab is only one of numerous Illinois businesses that are in the midst of a possible out-of-state move. Illinois’s uncompetitive tax environment drove them to this breaking point.
Chasing away jobs, people, and income is not a winning strategy. Lawmakers must be bold. They can no longer enact failed public policies that leave quality jobs and quality people fleeing the state. Instead, they must repeal the tax hike to make Illinois competitive.
Repealing the tax hike also sends a clear message that Illinois wants its businesses and citizens to stay. Letting them keep more of their hard earned money incentivizes job creation and productivity so Cal Lab and other Illinois businesses will innovate, grow, and hire more people.
