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 Business owner Matt Schrimpf has a geography lesson for
Illinois leaders: The state is long and narrow, with six neighboring states
happy to accommodate businesses and their workers.
Schrimpf’s business, Piasa Motor Fuels LLC, near Alton, Illinois, is about five
miles from Missouri. After 87 years in Illinois, the progressive state income
tax proposal by Illinois Gov. J.B. Pritzker may be enough to push him and his 48
employees across the state line.
“With the technology we all have today, most businesses are portable,” Schrimpf
said.
The fuels transport, storage and pipeline business grew from a single truck and
a gas station opened in 1932 by Schrimpf’s great-grandfather. Five generations
of Schrimpfs have worked hard to grow the business, with the state profiting
from their decades of work. Now, leaders in their home state are vilifying them
with calls for a “tax on the rich.”
 “We didn’t get here overnight. It was years of blood, sweat and tears to be
successful, at no cost to the state,” Schrimpf said. “They benefitted from our
work, and now they want more and more and more and more.”
Illinois puts the fuels business at a disadvantage when it comes to its workers’
compensation law and licensing fees for his trucks, he said. Illinois’ flat
income tax rate was one advantage over Missouri.
“As soon as it increases … there’s no reason to have our corporate headquarters
in Illinois,” he said. “That’s not sustainable. It’s my job, it’s any business
owner’s job, to give the company and the employees the best chance of
sustainability.”
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Missouri is becoming even more attractive: Their
top corporate income tax rate drops to 4 percent from 6.5 percent in
tax year 2020, an effort by Missouri state leaders to better compete
for new employers and retain existing ones.
Schrimpf said the progressive tax will exacerbate the fiscal death
spiral in Illinois. He said he tried to impress that fact on
southwestern Illinois state Reps. Monica Bristow, D-Godfrey, and
Katie Stuart, D-Edwardsville.
“My question to them was, ‘Is it easier to move when you make $1
million or $10 million?’ The more you make, the easier it is to
move,” he said.
When the high-earners leave, he said, the financial services and
other layers of the business community fall away and leave the
economy ever poorer, with greater need for government services
shared by fewer, poorer remaining residents. He said decades of
future losses are not worth a short-term spike in tax revenue.
“Initially there’s a bump, but certainly over the longer term
they’ll run existing businesses out and any new businesses that
start here and become successful, as long as they are portable, they
will also leave, in my opinion,” Schrimpf said.
He said progressive tax rates will keep rising – 9 percent, 12
percent – as long as the state employee pensions remain massively
underfunded. The state’s employee pension systems consume more than
$1 of every $4 available to operate the state, yet its combined
pension fund debt remains $133.7 billion by state estimates and $250
billion by ratings service estimates.
“If they don’t fix the cost issues, it doesn’t matter what they do.”
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