CEO survey ranks Illinois’ business climate third-worst in the nation
Illinois has been ranked third-to-last for business friendliness in three straight surveys of CEOs.
The Land of Lincoln is considered the third-worst state to invest in, according to a new survey of CEOs.
Illinois was behind only New York and California. The survey, conducted by marketing firm Development Counsellors International, or DCI, polled hundreds of corporate executives. Though Illinois escaped being dead last overall, 29 percent of those polled ranked Illinois the worst in the nation.
DCI conducts its survey once every three years, and for the last three surveys in 2011, 2014 and 2017, Illinois has been ranked third-worst. Executives cited New York and California’s high costs of living as well as their large tax burdens as the primary reasons for those states being ranked last, a position the states have traded back and forth over the past two decades.
The report notes executives’ view of Illinois has worsened considerably in the years following the Great Recession.
Those surveyed blamed Illinois’ political dysfunction and had a negative perception of the state’s public sector. However, the report notes executives had a positive view of Illinois’ skilled workforce.
Illinoisans shouldn’t be surprised to find the Prairie State ranked among the worst states to invest in by CEOs. Illinois has some of the highest property taxes in the nation, as well as the highest workers’ compensation costs in the region. On top of both of those factors, Illinois lawmakers passed a 32 personal income tax hike and a 33 percent corporate income tax hike in July 2017.
Despite those massive tax increases, businesses have little reason to expect a more stable political and tax environment in Illinois.
The state’s $250 billion in pension debt, constant deficit spending and serial credit downgrades to one notch above “junk” status make Illinois look like an unreliable partner. Large companies and CEOs seeking stability are likely to look elsewhere.
However, while large corporate investment is important, the key to jobs growth and investment in Illinois is in small business. Businesses with fewer than 50 employees created 75 percent of net new jobs in Illinois in 2016. And from 2011 to 2016, businesses with fewer than 500 employees were responsible for 79 percent of jobs created.
If Illinoisans want to see real improvements in jobs growth from businesses of all sizes and a better reputation for business investment, lawmakers should embrace pro-growth policies.