At least that's what the nation's business leaders
according to a poll from the Connecticut-based Chief Executive
magazine. Illinois ranked 46th out the 50 states and Washington, D.C.,
for the second year in a row, a far cry from the 17th ranking it
held in 2005.
Illinois regulations on environment, health care and workers'
compensation laws, as well as the state tax and fee rates, have all
contributed to unease among the business community.
But the state's 7.3 percent corporate income tax rate is middle of
the pack. In fact, Illinois' corporate tax rates are lower than in
Indiana, which finished 16th in the poll -- the highest ranking in the
So why are businesses wary of coming to Illinois?
Marshall Cooper, the magazine's publisher, said attitude matters:
The perception among business executives is that lawmakers and
government agencies in the Land of Lincoln do not have their best
interests in mind.
"There's no doubt that uncertainty is not good for business and
making investments. CEOs need to know there's continuity and
stability with the regulation laws, fees, taxes," he said. "So when
things are in flux, it makes it hard for businesses to invest
heavily in an area."
The poll ranked states based on three criteria: taxes and
regulation, living environment, and work force quality. Illinois' tax
policy received a D-plus from executives operating in the state, which
squeaked by other bottom-of-the-barrel states like Michigan,
Massachusetts and the F-rated California. Texas received an A-minus grade
for taxes and regulation, the highest in the nation.
Illinois grades improved to B-minus in the latter categories, which
enabled it to move up to the 46th ranking, edging out Massachusetts.
The state's overall D grade is consistent with last year's grade,
despite several business-friendly laws passed this year, including
EDGE tax credits, which provide millions in tax relief to businesses
that create new jobs. Gov. Pat Quinn credited the tax incentive
program with bringing an expanded Ford plant to the Chicagoland
Kristina Rasmussen, vice president at the conservative Illinois
Policy Institute, was not surprised by the poll's results, despite
the tax credit program.
"Tax credits, while they can have a beneficial impact, are very
small and limited," she said. "Really, what entrepreneurs are
looking for in the long run is low, consistently stable rates, so
they know tax credits are not going to expire."
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But some think the grades should not be taken too seriously. John
Jackson, visiting professor of political science at the Paul Simon
Public Policy Institute at Southern Illinois University-Carbondale,
said Illinois' reputation as a high-taxation, regulated state is
overblown by business interest groups.
"What I do think is a fair criticism is not the regulatory and tax
environment, it's the chaos in the budget that has been created by
the state government," he said. "That would give me real pause if I
were a CEO thinking about where to locate a business or industry."
For the poll, Chief Executive magazine surveyed more than 650 executives across the
country, mostly from medium to large businesses.
Statehouse News; By BILL McMORRIS]