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The Border War: How Illinois is losing out to surrounding states

There’s a border war raging.  It’s not between two countries.  This war is being waged between Illinois and surrounding states.  And it’s not just a battle for businesses.

“I make more money and everything is cheaper,” said Bill Roberts.

He lived in west suburban Westmont until the company he works for moved from Bedford Park, Illinois to East Chicago, Indiana.

Hoist Liftruck, took employees on a tour of the new factory that also included a visit to nearby northwest Indiana neighborhoods.  Roberts decided to move as well.  He was renter in Illinois but had enough money to purchase a home 40 miles away in Indiana.

“It’s a no brainer,” said Roberts.

Hoist CEO Marty Flaska said his company is saving millions by moving just a few miles from Illinois to Indiana.  Flaska says the employees who decided to move are benefiting as well.

“Illinois is becoming a place for upper middle class and the rich to survive,” Flaska said. “I was having employees who had to move 60 or 70 miles away to be able to afford housing.”

As for the business, Flaska said workers compensation costs and property taxes were the driving force behind his 2015 move.  Flaska said the company paid $2 per square foot in property taxes in Illinois compared with 43-cents per square foot in Indiana.

“In Illinois we were getting re-assessed and having to pay a law firm to lower our tax bill down to what would a competitive rate. It was like a legal shakedown,” Flaska said.

Hoist is one of at least 51 Illinois companies that have made the move in recent years bringing more than 5,000 jobs with them.  That’s one of the reasons Illinois lost more than 37,000 residents last year, a greater population loss than any other state.

It’s not all doom and gloom in Illinois.  In February the state posted its highest number of jobs on record.

 

Loyal to community

“I can hit a golf ball into Indiana… I’m the poster child,” said Bob Wicz, president of Doreen’s Frozen Pizza in Calumet City, Illinois.

Wicz says loyalty to Chicago’s South Side and south suburbs has kept him in the state.  So has a special temporary property tax classification that helps reduce his cost.

However, Wicz questions the wisdom of such gimmicks.

“We can offer incentives or we can make the climate better,” Wicz said.  “If the climate is easier, [business will] build itself.”

Wicz is also president of the Hegewisch Business Association on Chicago’s Southeast Side.  The community borders in Indiana. Wicz admits the state’s budget stalemate and tax climate make marketing the area a challenge.

The Illinois Department of Commerce and Economic Opportunity concede it’s losing the border war.

“It is no secret that Illinois has been losing companies to our neighboring states for a decade, but the majority party in the General Assembly has refused to address the reasons why like our highest-in-the-nation property taxes and crushing red tape,” read a statement from department spokesperson Jacquelyn Reineke.

There’s no looking back for businesses – and people – who have made the move from Illinois to Indiana.  “If I would have known 30 years ago, I have moved 30 years ago,” said Hoist employee Bill Roberts.