Small Business Saturday: Illinois’ business climate is unkind to the little guy

A high cost of doing business and little reason to hope for reform can be enough for Illinois’ small businesses to look elsewhere for success.

For many small businesses in Illinois, the cost of doing business takes away the possibility to thrive.

For Geanto’s Trucking, based near O’Hare Airport, a combination of taxes, tolls and other rising costs have added up to frustration and the longing for an opportunity to possibly move the family business to another state.

Mike Geanto, whose father started the company in 1985, sees more and more the appeal of states such as Wisconsin and Texas. They employ around 90 full-time and 30 part-time workers at any given time.

“Everything’s going up,” Geanto said. “It’s a very expensive industry. The insurance went up, the taxes went up, workers’ compensation never goes down. And the state of Illinois is even worse.”

Ahead of Small Business Saturday on Nov. 25, this sentiment should be a warning sign for Illinois lawmakers. Since the Great Recession, businesses with fewer than 500 employees have accounted for 79 percent of Illinois’ net new jobs, according to the Bureau of Economic Analysis.

Geanto and small business owners like him are crucial to the state economy. But you wouldn’t know it by the way they’re treated by state government.

While he offers 50 cents on the dollar for every full-time employee’s 401(k), Geanto is also forced to pay $12 in workers’ compensation insurance costs for every $100 in payroll.

The average cost of workers’ compensation for long-distance trucking in Illinois is more than $14.35 per $100 of payroll, according to a 2016 Oregon Worker’ Compensation Premium Rate Ranking. That’s higher than all of Illinois’ bordering states and it’s more than double the rate employers pay in Indiana and Michigan.

Then there’s the cost of using Illinois highways.

“For us to lug a tractor-trailer down [Interstate] 355 to [Interstate] 80, to go out to Elwood, to Joliet, just one way is almost $23 [in tolls],” said Steven Wack, compliance manager for the company.

“Then we have about 47 to 48 cents a gallon in fuel tax.”

This pinch at the pump is something average Illinoisans feel as well, paying 34 cents per gallon, according to the Tax Foundation. Illinois is one of only seven other states with a sales tax on gasoline – and some state lawmakers are gearing up to hike the state’s gas tax in 2018.

Instead of making structural reforms to Illinois’ notoriously unfriendly business climate, Illinois’ political leaders have too often resorted to quick fixes. That means giving out major tax incentives to the largest businesses in the state, while the real engine of Illinois’ economy sputters.

Is it any wonder businesses are looking beyond the state border?

Geanto allows the thought of moving to enter his mind.

“The people who can move, are moving. And the people who can’t aren’t,” Geanto said.

“I’m pretty sure if there was even an opportunity to leave, we would. In a heartbeat.”