Illinois enters Phase 5 with many businesses still closed

[June 16, 2021]    By Andrew Hensel

(The Center Square) – As Illinois reopens in Phase 5, 39% of businesses remained closed due to the COVID-19 pandemic.

In 2020, Illinois saw a high number of small businesses close their doors, with the restaurant industry taking the hardest hit. According to the Illinois Policy Institute, 53% of privately owned restaurants remain closed even as the state has reopened.

Bryce Hill, of the Illinois Policy Institute, said that many restaurants fell behind early when they had to close their doors, but bills continued to pile up.

"Although their business models stopped, their bills did not,” he said. “They still had to make rent and pay the employees they did keep on the payroll."

Sam Toia, president of the Illinois Restaurant Association, said that part of the reason the bills kept coming in was from misjudgment on how long these closures would last.

"When we went into lockdown in March, you had several folks who thought this would be over by Easter and some folks thought this would last till the Fourth of July,” he said. “No one thought this [was] lasting 15 months."

The restaurant business scuffling adds to the problem the state is already facing where Illinois has the highest unemployment rate in the nation at 7.1%. That’s a full percentage point higher than the national average of 6.1%.

With restaurants opening back up, Gov. J.B. Pritzker passed a budget plan that would include nine new tax hikes, including one that could hurt investment and job creation, according to the Illinois Policy Institute.

Orphe Divounguy, who is the chief economist for the Illinois Policy Institute, said those taxes will make it even harder for restaurants.

"Though Illinois' economy has spent a year trying to bounce back from the COVID-19 shock, we've seen Illinois job market recover at a slower rate than the rest of the nation,” he said. “As Illinois business take an important step forward in re-opening, cash strapped business will now face higher taxes."

Even with full capacity now available, the Illinois restaurant field still has a long way back to where it was a year ago.

Toia said that even with all the closures, he is confident more restaurants will open up due to the entrepreneurial spirit of restaurant owners.

“Restaurant owners and operators are the ultimate entrepreneurs, they have type-A personalities,” he said. “These restaurants that went out, up to 20% of them will see new entrepreneurs coming in and opening up restaurants.”