Illinois small business owners brace for higher taxes under Amendment 1

Illinois small business owners brace for higher taxes under Amendment 1

New business taxes added by the Pritzker administration plus Illinois’ high property taxes are making it hard for a Chicago-area bar owner to stay in business. Now a government union push for more property taxes is creating a new threat.

Darla Pitts purchased the Irish Rebel bar in Oak Lawn, Illinois, less than a year before the COVID-19 pandemic. Almost two years later, Illinois’ tax and business climate is what plagues her business.

“Our biggest challenge is the profit margin isn’t what it used to be. If it wasn’t for video gambling, we would just be breaking even because of inflation,” Pitts said. “You just can’t raise prices, either, then customers are super upset and talk about going somewhere else. It’s like you’re between a rock and a hard place. We haven’t raised our prices whatsoever for the past two years.”

Gov. J.B. Pritzker has added $650 million in tax and fee hikes to businesses since taking office. Among Illinois and its neighbors, only Illinois dropped in the Tax Foundation’s Business Tax Climate rankings since 2018. Illinois’ business climate dropped seven places, to 36th from 29th in four years.

Illinois’ tough tax climate plus inflation means the Irish Rebel has had to delay expanding.

“Inflation has taken money that I’d put back into the business. We’re trying to open a kitchen. We were planning on breaking ground this spring, which has now turned into late August. Adding a menu to the area which is mostly bars would be nice. Having a pub and grill is way nicer than having just a bar where people aren’t eating,” Pitts said.

When she’s not slinging shots at the Irish Rebel, Pitts works as a firefighter. She hoped to retire and just run the bar, but inflation and rising costs are delaying that.

“In my mind, I wanted to retire from the firehouse in a certain amount of years from now, and I’m not going to be able to because of the inflation and rising taxes. I’ll have to wait a lot longer than I anticipated,” Pitts said.

To make matters worse, Pritzker doubled the gas tax in 2019 and added automatic annual gas tax hikes, costing the average Illinoian $277 more in gas money, alone. Expensive gas means fewer customers head to the bar.

“Thanks to gas prices, taxicab services hiked up their prices. It’s wonderful that people don’t want to drink and drive. When rides are more expensive, people are more likely to just stay home,” Pitts said. “I checked the price to my house the other night. I only live within five miles: it was a $30 cab ride. Thinking about going back and forth there for a $30 cab ride is insane.”

And gas taxes aren’t the largest burden to Pitts’ bottom line. Illinois’ average property taxes are the second highest in the nation, hitting small business owners at home and work.

“Property taxes are definitely one of the biggest costs, I think mine are $22,000 for the year. I figured out I pay almost $2,000 a month just for property taxes and licenses. I can’t imagine business owners without a full-time job or running their business full time.”

Pitts’ property taxes would be even higher under Amendment 1, the proposed constitutional amendment guaranteeing a $2,100 property tax hike by expanding government unions’ abilities to make demands.

“I can’t vote for Amendment 1 or anything that’d bring more taxes. I’m just barely breaking even as it is, taking any more of that margin would put me in the red for sure,” Pitts said.

If approved, the costly demands from government union bosses would fall on businesses and taxpayers. It’s up to voters Nov. 8 to decide if taxpayers can handle another property tax hike.

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