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Op-Ed: The burden of stacked costs on Illinois manufacturers

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As the economic landscape in Illinois becomes increasingly challenging, small businesses – particularly manufacturers – are finding it more difficult to thrive. The phenomenon of “stacked costs” has become a significant hurdle, imposing financial burdens that stifle growth, innovation, and job creation.

Stacked costs are the cumulative financial pressures arising from various regulatory requirements, litigation risks, and economic factors. For manufacturers, these costs have become an almost insurmountable barrier to success when combined with the high energy and wage costs local businesses experience.

As a result, Illinois manufacturers are seeing a decline in output and orders, layoffs are becoming a norm, and plants are closing and going out of business. While we continue to see more tax increases and regulatory pressure, it’s just a matter of time before doing business in Illinois is no longer an option if a manufacturer wants to survive.

During a recent visit by Illinois State Reps. Martin McLaughlin and Tom Weber, hosted by my company HM Manufacturing in Wauconda, the impact of these burdens was clearly highlighted.

The representatives witnessed firsthand the precision and dedication required to produce exceptional products.

However, this dedication is being undermined by unrelenting increases in operational costs. High tort expenses, escalating insurance premiums, and the constant threat of litigation are diverting resources away from innovation and production, which are essential for economic growth.

Like other manufacturers, I’m focused on running my business and getting high-quality products out the door. The constant threat of lawsuits from trial lawyers detracts from production and the economic output we would be adding to our state’s economy.

This sentiment resonates across the manufacturing sector in Illinois, where businesses are being forced to allocate substantial resources to navigate the complex web of regulations and legal challenges.

The economic impact report from CALA-IL revealed that Illinois faces direct losses of $14.48 billion annually due to frivolous lawsuits, translating into a hidden “tort tax” of more than $1,800 per person.

These staggering figures underscore the pervasive nature of the problem. Lawsuit abuse not only affects businesses but also imposes a significant financial burden on every resident of the state.

Illinois’ small businesses are grappling with increased regulatory compliance costs. Every new regulation – be it related to labor laws, environmental standards, or tax codes – adds another layer of financial strain.

For manufacturers like me, this means diverting funds from essential business activities to cover compliance expenses. The cumulative effect is a significant reduction in the ability to compete, grow, and contribute to the local economy.

The need for reform is urgent. Illinois must create a more supportive business environment that encourages growth and innovation rather than hindering it with excessive costs and legal threats. Lawmakers should consider the real-world impact of their decisions on small businesses and work towards common sense reforms that alleviate these burdens.

Without meaningful changes to the regulatory and legal landscape, small businesses like mine will continue to struggle and suffer. The stacked costs facing Illinois manufacturers are a significant barrier to the economic prosperity our state’s business environment used to cultivate.

It’s time for our legislators to step up and enact reforms that promote job creation, protect businesses from frivolous lawsuits, and reduce the overall burden of stacked costs.

By addressing the root causes of these costs and implementing sensible reforms, we can create a more vibrant and competitive business environment.

The future of Illinois’ economy depends on our ability to support and nurture our small businesses, ensuring they can thrive and continue to contribute to the state’s growth and success.