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 Illinois has 24% of its workers in industries directly impacted
by the COVID-19 outbreak and measures taken to contain the spread. That means
1.5 million workers in the state are facing potential threats of layoffs or
reduced hours.
While very little data is currently available to confirm the
magnitude of the economic fallout of containment measures, in normal times these
industries produce roughly 11% of Illinois’ economic output. That is more than
$100 billion in annual economic activity, or $278 million per day on average in
2019, according to data from the Bureau of Economic Analysis.
During the outbreak, contact-intensive services sectors, which were some of the
only segments of the economy adding jobs in 2019, will be the most harmed as
individuals are required to stay at home to avoid spreading the virus. As the
lockdown continues, the negative impact is likely to spread to the manufacturing
sector, the financial sector and other non-services sectors, which were already
shedding jobs before the COVID-19 pandemic. New federal data revealed Illinois
lost 13,100 manufacturing jobs on net in 2019 – more than double the losses of
any other state. In percentage terms, this 2.2% decline in manufacturing
payrolls was third worst in the nation behind Idaho and South Dakota.
The COVID-19 crisis will play out in two acts: the emergency and the recovery.
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In the emergency phase, Illinois must do everything
it can to provide relief for taxpayers, including following
Chicago’s lead by delaying or canceling fines, fees and late
penalties for non-safety violations, such as parking violations and
unpaid tickets.
Despite having virtually no rainy-day fund, state
leaders can still take action to provide Illinoisans with relief
during this time. The Illinois General Assembly should pass
emergency legislation delaying the collection of one-half of this
year’s business property taxes for local governments to prevent
businesses from going under. Local governments could still receive
the revenue if financed by the state through short-term emergency
borrowing. This would let Illinois provide tax relief where it is
most needed without harming local government finances.
And to ensure the state recovers fully once the health crisis is
contained, lawmakers should remove tax uncertainty by clearing the
threat of tax hikes such as the proposed progressive income tax,
which would hit small businesses when they are at their most
vulnerable.
Smart policy solutions now would create a sense of stability even
amid the chaos. Illinois leaders should limit the public’s
uncertainty with a strong plan to ensure businesses can keep their
workers, regain their footing and quickly help stabilize the
economy.
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