It is no secret that Illinois faces economic challenges. The dysfunction of our state's government in recent years has been highlighted by politicians and the media as well. However, pushing only a negative outlook does nothing to change the situation. The Illinois small business community can counter this unhelpful narrative by focusing on how collectively we can facilitate economic growth, create more revenue, and improve the fiscal condition of our state.
The small business community must advocate for policies which can spark economic growth and remind legislators that an investment in the small business community will pay dividends for the state. The Illinois General Assembly should start by passing legislation that reauthorizes a $2,500 tax credit for small businesses who hire new employees. This widely used tax credit expired in 2016. Senate Bill 1232 provides that to be eligible for the credit, a small business must create a net new job at a rate of $15 an hour. It caps the pool of funds available through this credit at $50 million over a seven-year period. This tax credit is available only to businesses that employ less than 50 employees.
The small business job creation tax credit will help small business owners deciding whether to bring on a full-time employee, to make that hire. Each tax credit awarded will be revenue neutral after the new employee spends two years on the job. After that, the investment becomes a revenue raiser for the state.
Eliminating unnecessary occupational licenses that do not protect the health, safety or welfare of Illinois residents is another way to encourage growth and new revenue in Illinois. Today, a state license is required for over 400 occupations. Simply put, new licenses should not be created unless they are necessary to protect the safety and welfare of the public. New licenses should not be used to lock entrepreneurs out of their industry or profession.
Legislation is pending that will provide a process for lawmakers to receive information and analysis from independent parties regarding whether a new license is warranted, the reasons for the license and its prospective impact on the economy. This analysis will also provide guidance on ways to craft necessary licenses in the least restrictive way while still ensuring they are effective. Senate Bill 1756 unanimously passed the Senate by a vote of 55-0 and now heads to the House for consideration. This legislation is an important first step in ensuring unnecessary occupational licenses do not restrict Illinois' economic growth.
As the debate over taxes continues in Springfield, politicians from both sides of the aisle should also focus on creating policies that enable small businesses to grow and create more revenue. When legislation championed by the SBAC to lower some of the highest LLC fees in the nation was signed into law, statistics showed it mattered. In the sixth months after that law became effective, new LLC filings rose 66%. There are more policies that can be enacted to help small businesses. Everyone should be able to agree the best way to raise revenue for the state is through economic growth.
Most of the small business owners and professionals reading this article live and work in Illinois. This is our home and where many of us have planted roots. There is understandable frustration with the fiscal condition of our state and the way politicians have handled the situation. However, we must come together, earn a seat at the table through engagement and move legislation that will empower entrepreneurs. The time has come to change the narrative for our state. Illinois' small business community is ready to grow and improve the economy. Let's get this message out and encourage others to join us.
• Elliot Richardson is president & co-founder of the Small Business Advocacy Council