Illinois Manufacturing

State Rep. Peter Breen of DuPage County tells of his brother-in-law’s entry into manufacturing:

Peter Breen

Peter Breen

My brother-in-law, who lives in our district, is starting his career working in manufacturing, after serving almost a decade in the military.

Manufacturing is universally acknowledged as one of the keys to a stable healthy economy.

And Illinois has traditionally been the manufacturing hub of the Midwest.

Well, I just saw a statistic that turned my head:

for every 3 manufacturing jobs in Illinois, there are 4 state and local government jobs.

That’s according to the June 2015 survey from the Bureau of Labor and Statistics, which identified 746,700 state and local government workers, compared to 574,200 manufacturing workers.

What happened?

Manufacturing companies are leaving for greener pastures, in nearby states like Wisconsin and Indiana.

Some leave because the laws and regulations are too complicated and obtrusive.

Some leave because their property taxes and other taxes are higher than our neighbors. In business, you can either increase your revenue—the number of products sold and the amount you sell them for—or you can decrease your costs to produce and deliver the product—that’s where all the property taxes, income taxes, corporate taxes, fees, lawsuit costs, and state and local regulation costs combine to impact the profit margin.

Without profits, you can’t hire folks. Without profits, your business will soon enough go under.

When our manufacturing businesses leave, they take a range of jobs.

There are the entry level positions, like the one my brother-in-law and many other young people need to get their start in manufacturing.

Then there are those mid-level skilled positions, the types that allow folks to buy homes, support families, and set down deep roots in their communities.

And there are also the management and ownership positions to aspire to, for those who have the aptitude and willingness to work hard enough to get into them.

Sometimes the management positions become jumping off points for folks to become owners of the particular business—or to go and start their own businesses.

All of this is why losing a business means a lot more than just a fluctuation in some economic numbers.

When an Illinois business moves or closes, it’s like a small community scattering or vanishing.

Some in Springfield don’t agree with this assessment.

They advocate for the status quo: the status quo that got them elected, the status quo that often provides them additional personal profit.

For them, it’s about “getting theirs.”

These are the legislators who refuse reform and instead just demand more and more money for government—usually at the expense of folks in DuPage and the collar counties.

Well, we’re tired of paying for their status quo.

We’re tired of seeing our neighbors forced out of Illinois because of job loss.

We’re tired of kids not being able to find jobs here. We’re tired of being the laughingstock of the country.

The only thing standing in the way of an Illinois turnaround is the status quo in Springfield.

But for the first time in over a decade, the fight is on to upend that status quo.

The fight is on to reform government at every level – to change our regulations, to meet the needs of innovative and modern businesses, and to finally reform our broken property tax system.

You’re now seeing the chinks in the armor. Bad bills are being vetoed by the governor—and the status quo legislators are learning that they can’t override the vetoes.

In the recent past, these legislators got whatever they wanted, as long as they could cut the right deal with the right people. No more.

As you watch the news coverage of what’s happening in the state capital, watch for these victories, the times where the political establishment can’t get its way.

Each time that happens, we’re one step closer to getting the reform we need in Illinois.

We’re one step closer to becoming a state where my brother-in-law and those like him can find good-paying jobs, raise healthy and happy families, and build strong communities.


Illinois Manufacturing — 11 Comments

  1. A simple elegant solution for re-balancing punitive treatment of manufacturing and home-owning risk-takers:

    Offer a $10,000-$30,000 of EAV exemption to homeowners / businesses which do not contain a household member/equity owner who is beneficiary of public funds pension eligibility OR tif/Enterprise Zone property tax abatements or property tax diversions form public taxing bodies such as schools.

  2. And be watchful for entrepreneurs such as whomever is behind this:

    Plum Tree golf course was sold to someone who has moved quickly to plan some events starting next weekend.

  3. Do you have a url to where the statistic is?

    I could not find it in the web site.

  4. Smart people are leaving Illinois before everything they have ever worked for has been stolen from them.

    Why stay only to “feed the beast” which seeks to bleed you to death ?

  5. Government employs more people than manufacturing in every state except Michigan, Wisconsin, and Indian.

    United States Department of Labor
    Bureau of Labor Statistics
    Economic News Release
    Regional and State Employment and Unemployment Summary
    For release 10:00 a.m. (EDT) Friday, September 18, 2015
    Regional and State Employment and Unemployment – August 2015
    Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted
    Establishment Data
    Not Seasonally Adjusted
    Table 6. Employees on nonfarm payrolls by state and selected industry sector, not seasonally adjusted [In thousands]

  6. Put the ‘E’ Back In EAV:

    If you can’t pass a property tax rate cap (as Massachusetts, Indiana, and many other states have done), then achieve a more effective and progressive property tax by offering a break to hardworking homeowners who are NOT on public paychecks or public pensions.

    Why not make the property tax exemption for non-public-pension-eligible-homeowners-of-record/AND businesses NOT located in TIF District/Enterprise Zone/or receiving Tax Abatement from municipality:

    $25,000-$100,000 off EAV (EAV is 1/3 of property value)?

    In Woodstock we are paying 5% effective property tax rates. Much of this is for benefit of pension spiked teachers, school administrators, and public officials.

    In Woodstock, the median value home cannot be purchased by a median income household: because of the 5% tax rate, a median value earner cannot qualify for a conventional mortgage.

    In Woodstock the median household income pays over 14% of that income for Property Taxes. (Compare this to 3.6% national average of household income spent on property taxes, according to Consumer Expenditure Survey report for 2014.)

    For a private individual to collect enough to purchase an annuity (closest replica of a government-guaranteed defined benefit pension available) the individual needs to collect a sum of money equal to roughly 25-35 times the salary at retirement…when one considers retirement at 55 the norm, survivor benefits, COLA, and most likely additional health insurance benefits not available to private workers who must self-fund retirement.

    So if we look at a lifetime of 25 years of property tax payments we must determine an amortization of property tax equalization reduction which will allow the private worker to make ‘catch up ‘ payments to private retirement fund savings.

    We might call it 75% of typical teacher pension because social security yields roughly 25% as much as a low-end-of-range teacher pension, but we might add back that 25% to account for the COLA, Cadillac Health insurance, and 10-15 year differential between retirement eligibility age.

    A private-sector worker needs to accumulate a retirement fund of $1,250,000-$1,750,000 to approximate a $50,000 public-sector worker’s government guaranteed defined benefit retirement plan.

    Getting back the typical 10% annually of household income Woodstock homeowners are forced to pay Woodstock, Woodstock CUSD 200, and McHenry County over and above national average would be a start; this 10 percent represents what most private sector families are allowed to save for their own retirements.

    What a social engineering impetus for change if the private sector workers were no longer punished for risking their own money in order to live and work in Illinois!

  7. That pretty much sums up why there will be no end to property tax hikes without pension reform.

    And it’s only going to get worse until something is done about pensions.

  8. Thank you Mark for making me look deeper.

    Illinois ranks number 44 out 53 government units in the Tables you linked to.

    13.31 percent of the employees listed work in Government.

    The worst unit of course is D.C. with 30.98 percent, followed by the Virgin Islands with 28.72, followed by Puerto Rico with 25.66 and guess who is next?

    The lowest tax state Wyoming with 22.71 percent working in government.

    As you have so clearly stated, the problem in Illinois is primarily due to the State Constitutional pension guarantee.

    Our states does not have too many employees or too many units of government – we pay our public sector employees inordinately high salaries and guarantee pensions our taxpayers cannot afford to support.

  9. By the way in the BLS link in the comment above, “Government” includes Federal, State, and Local government.

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