Amendment 1 could make bad Illinois business climate worse
A Rockford family and their trucking business are being driven out of Illinois by high taxes and bad public policies. If voters agree Nov. 8 to enshrining public union power in the Illinois Constitution, expect more businesses and workers to leave.
During the past 14 years, Zach and Tara Meiborg have grown Meiborg Trucking in Rockford, Illinois, to nearly 25 times its original size. But when your business is to move things, you also know how to move yourself.
That’s what the Meiborgs have decided to do, thanks to Illinois’ dysfunctional government and policies. They are deciding whether to move their business out of Illinois, but that decision might get easier if voters Nov. 8 approve Amendment 1 and the firm’s tax burden grows.
“In a little over a decade, we’ve grown our business from 15 employees to 350, but Illinois is becoming an increasingly hostile state to raise a family and do business in,” Zach Meiborg said. “In the next few weeks, we’re relocating to Houston and considering eventually moving our headquarters out of Illinois as well.”
Illinois faces staggering population loss: 81 out of 102 Illinois counties lost population in 2021. Winnebago County, where Rockford is located, lost 1,739 people, the sixth-largest loss in the state.
Amendment 1 would solidify Illinois’ reputation as one of the worst places to do business in the country. Illinois would become the only state to decree union powers as untouchable, putting the weight of the Illinois Constitution behind union bosses’ abilities to strike over a virtually limitless list of demands, the ability to override state law through their contracts, and a guarantee that taxpayers and lawmakers would have an extremely difficult time reversing course. The cost of filling those demands would fall on the businesses and families paying taxes.
Illinois’ business climate already ranks 36th in the U.S., but that is 10 spots lower than it was a decade ago while neighboring states are all on the upswing of the Tax Foundation’s State Business Tax Climate Index. On the heels of state lawmakers failing to stop automatic employer tax hikes because they didn’t repay a federal loan and adequately refill the state’s unemployment trust fund, employers are getting the message they are unwelcome in Illinois.
“Gov. Pritzker’s complete administrative mismanagement of unemployment and reckless workers’ comp laws, and an absurdly unbalanced budget are putting Illinois in our rearview mirror,” Zach Meiborg said.
“As business owners, we’re constantly up against headwinds at every level of bureaucracy and we’re exhausted from the fight to keep and extend more job opportunities here.”
When employers leave, so do prime working-age families like the Meiborgs whose taxes prop up state finances. Amendment 1 would be a hit to businesses as well as families, as government union demands and compliant politicians drive up property taxes.
“During the pandemic, we were all in. Our industry being the keystone of the supply chain, we didn’t lay anybody off and kept on trucking,” Zach Meiborg said. “But we’re still going to have to pay because the entire state is going to get dinged in increased taxes to make up what was taken out of the unemployment trust fund, every single business. So, we get punished for keeping people employed, which is the backwards way of what it should be.”
Illinois lawmakers borrowed $4.2 billion from the federal government at the height of the pandemic to fill the unemployment trust fund, then missed the deadline to repay last September. That left taxpayers owing at least $100 million in interest.
State lawmakers put $2.7 billion in federal pandemic relief towards the unemployment debt. Unless they take further action, businesses like the Meiborgs’ can expect federally mandated, automatic payroll tax increases just after the election to make up the difference.
Indicted former Illinois House Speaker Mike Madigan is gone, but his system of rewarding government union bosses with generous contracts in exchange for their campaign donations would be enshrined in the Illinois Constitution were Amendment 1 to pass. That would mean Illinois’ $313 billion pension debt would continue to balloon, further increasing state and local taxes while spending on vital programs would continue to fall.
“The property taxes are massive. Every little taxing body takes their dime out of your taxes and we get increasingly less service for that investment,” Zach Meiborg said. “When you start adding up all those taxes, that’s a large reason why we’re considering shifting some of our business to another state.”
Voters on Nov. 8 will need to decide whether government unions really need more power in Illinois, or whether taxpayers should declare they are not bottomless piggy banks for politicians wooing union bosses.