Bill could help Illinois businesses recovering from pandemic restrictions
State lawmakers passed a bill allowing local governments to waive licensing fees and registration costs for businesses harmed by the COVID-19 pandemic, but it won’t spare them from state taxes.
A recently passed bill could help struggling Illinois businesses by allowing local governments to waive permit application and licensing fees, permit costs and other registration costs associated with operating.
House Bill 2454 lets local leaders waive costs of complying with operational regulations to provide some relief to businesses affected by the pandemic. The waivers will be made available to businesses in a variety of industries, including those hit hardest by COVID-19 and related restrictions.
Illinois’ leisure and hospitality industry was among the hardest hit in the Midwest and lost 40% more jobs during 2020 than the rest of the nation. Waivers would be available to any business based on need because of financial losses or hardships connected to the pandemic.
While the measure will not make up for the devastating impact of COVID-19 lockdowns, any relief for businesses would be welcome. Depending on the type of business and the licensing and documentation needed to operate, annual fees can cost businesses thousands of dollars.
Some local governments have already begun lifting costly operational fees and licensing costs for struggling business, but the new bill would expand and codify their authority to grant such waivers to qualifying businesses. By establishing an application process, access to fee waivers will be made available to any business showing hardship or financial need resulting from the pandemic. Businesses could proactively seek waivers instead of having to wait for action by local governments.
Parker Grabowski, a local restaurant owner in North Aurora, said he pays nearly $6,000 for two licenses for his establishments, according to a report in the Aurora Beacon-News. He welcomed the village board’s decision to waive certain fees, saying “every little bit helps.”
Unfortunately, Illinois’ economy was struggling even before the pandemic began, weakening its position heading into the pandemic and now inhibiting its recovery as well. By Small Business Saturday in November 2020, 71% of bars and restaurants were closed while 61% of retail businesses were closed.
Now over a year after the imposition of COVID-19 restrictions, more than one-third of Illinois’ small businesses remain closed. As of April 2021, Illinois ranked 44th in the nation in jobs growth since the recovery began at the end of April 2020. Since its pre-pandemic peak in January 2020, the state has recovered fewer than half of the jobs it lost during the pandemic.
Illinois already punishes businesses with an unfriendly tax environment. According to the Tax Foundation, Illinois ranks in the bottom third of states for its business tax climate for 2021, while neighboring states such as Indiana, Michigan, Wisconsin, Kentucky and Missouri all rank in the top half. Illinois has the fifth-highestcorporate tax rate in the country, which has made the state less competitive as its neighbors have lowered their corporate tax rates. The high cost of doing business in Illinois has stifled growth and cost workers jobs and opportunities, creating poor conditions for an economic recovery from the pandemic.
Rather than trying to encourage business activity and ease burdens on companies in the state, Gov. J.B. Pritzker pushed several new taxes on business in his budget proposal. In the end, lawmakers included four of Pritzker’s tax increases worth $655 million.
Pritzker’s signature on HB 2454 will allow local governments to offer the waivers and provide some relief.
While the state is close to recognizing local authority to waive costly operational fees for businesses struggling through the pandemic, the Illinois General Assembly should have focused more attention on helping businesses jumpstart the economy instead of passing more tax hikes. Rather than hiking taxes, the best way to help Illinoisans build a prosperous future would be to get the state’s fiscal house in order by balancing the budget and passing pension reform.