Union takeover could worsen poor business climate in Illinois
A Rockford family and their trucking company are driven out of Illinois by high taxes and bad public policies. If voters agree Nov. 8 to enshrine the power of public unions in the Illinois Constitution, expect more businesses and workers to leave.
Over the past 14 years, Zach and Tara Meiborg have grown Meiborg Trucking in Rockford, Illinois to nearly 25 times its original size. But when your job is to make things happen, you also know how to make things happen yourself.
That’s what the Meiborgs decided to do, thanks to Illinois’ dysfunctional government and politics. They decide to move their business out of Illinois, but that decision might be easier if voters on Nov. 8 approve Amendment 1 and the tax burden on the business increases.
“In just over a decade, we’ve grown our company from 15 employees to 350, but Illinois is becoming an increasingly hostile state to raise a family and do business,” Zach Meiborg said. “In the next few weeks, we are moving to Houston and possibly considering moving our headquarters out of Illinois as well.”
Illinois faces staggering population loss: 81 of Illinois’ 102 counties lost population in 2021. Winnebago County, where Rockford is located, lost 1,739 people, the sixth highest loss of State.
Amendment 1 would bolster Illinois’ reputation as one of the worst places to do business in the country. Illinois would become the only state to decree that union powers were untouchable, putting the weight of the Illinois Constitution behind the ability of union bosses to strike on a virtually unlimited list of demands, the ability to overrule the state law through their contracts and ensuring that taxpayers and lawmakers would have a hard time reversing the tide. The cost of meeting these demands would fall on tax-paying businesses and families.
Illinois’ business climate already ranks 36th in the United States, but that’s 10 points lower than a decade ago, while neighboring states are all up according to the index of Tax Foundation Business Tax Climate. In the wake of state lawmakers failing to stop employers’ automatic tax hikes because they failed to repay a federal loan and adequately replenish the unemployment trust fund of the State, employers are getting the message that they are not welcome in Illinois.
“Governor. Pritzker’s complete administrative mismanagement of unemployment and reckless workers’ compensation laws, along with an absurdly lopsided budget put Illinois in our rear view mirror,” Zach Meiborg said.
“As business owners, we constantly face headwinds at all levels of bureaucracy and are exhausted from the struggle to retain and grow more job opportunities here.”
When employers leave, so do working-age families like the Meiborgs whose taxes support state finances. Amendment 1 would be a blow to businesses as well as families, as government union demands and docile politicians drive up property taxes.
“During the pandemic, we were all in. Our industry being the backbone of the supply chain, we didn’t lay off anyone and continued to truck,” Zach Meiborg said. “But we’re still going to have to pay because the entire state is going to get stung with a tax hike to make up for what was taken out of the unemployment trust fund, every business. So we are being punished for keeping people employed, which is the reverse of what it should be.
Illinois lawmakers borrowed $4.2 billion from the federal government at the height of the pandemic to fill the unemployment trust fund, then missed the repayment deadline last September. That left the taxpayers owing at least $100 million in interest.
State lawmakers have poured $2.7 billion in federal pandemic aid into unemployment debt. Unless they take other action, companies like the Meiborgs can expect automatic payroll tax increases imposed by the federal government right after the election to make up the difference.
Indicted former Illinois House Speaker Mike Madigan is gone, but his system of rewarding government union bosses with generous contracts in return for their campaign donations is said to be enshrined in the Illinois Constitution. Illinois if Amendment 1 passes. That would mean Illinois’ $313 billion retirement debt would continue to swell, further raising state and local taxes while spending on vital programs would continue to fall.
“Property taxes are huge. Every little tax agency takes their dime from your taxes and we get less and less service for that investment,” Zach Meiborg said. “When you start adding up all these taxes, that’s a big reason we’re looking at moving some of our operations to another state.”
Voters on November 8 will have to decide whether government unions really need more power in Illinois or whether taxpayers should declare that they are not bottomless piggy banks for politicians courting union bosses.