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Illinois tax hike could mean opportunity for NWI

Joseph S. Pete

Inquiries about moving businesses from Illinois to Northwest Indiana have spiked, Region officials say, since the Land of Lincoln passed a budget that raised personal state income taxes by 32 percent and the effective corporate income tax rate by 22.5 percent.

Lake County Economic Alliance President and CEO Karen Lauerman said her office typically handles 20 to 30 inquiries from businesses a week — ranging from the idly curious kicking the tires to companies already scouting sites. She's been getting 10 to 15 more inquiries a week from across the state line since the Illinois Legislature voted to raise taxes earlier this summer.

Illinois business owners have been concerned that state income taxes rose to 4.95 percent from 3.75 percent, and corporate income taxes increased to 9.5 percent from 7.75 percent while cutting spending by $2 billion a year.

Northwest Indiana economic development officials hope to capitalize on the discontent with a new campaign that would brand NWI as a low-cost enclave in Chicagoland.

Starting with the air waves

On Friday, the Northwest Indiana Forum sent Northwest Indiana Regional Development Authority President and CEO Bill Hanna to appear on WGN radio's Wintrust Business Lunch with Steve Bertrand. He touted Indiana's business climate and projects intended to position the Region more as a bedroom community for Chicago, including lakefront improvements, the South Shore Line double tracking project that's expected to shorten trips to Chicago, and the plan to extend South Shore Line service to Munster and Dyer.

“The opportunity to share the positive story of living and connecting business within the Chicago metro market is essential to our continued growth and success," NWI Forum Economic Development Director Joe Rurode said. “The Forum’s partnership with the RDA furthers our mission of marketing Northwest Indiana as the place to invest in now."

NWI Forum President and CEO Heather Ennis said the private economic development agency based in Portage was putting together marketing materials to appeal to Illinois businesses, especially manufacturers. She said it might not result in an immediate stampede across the state line, but would get factory owners to consider Northwest Indiana if they outgrow their existing space and need to expand or relocate.

"Obviously, moving a manufacturing company is a large undertaking so you have to be at a push point," she said. "No company just says, 'I'll pack up and move everything. That'll be a good business decision.' It's a process that takes time. Our message is that we will continue to be a great place to do business as they continue to go through these reorganizations and struggles in Illinois. It's advantageous to be here."

Northwest Indiana already has had success drawing manufacturers from the south suburbs across the state line, including AM Manufacturing, Carl Buddig, Land O'Frost, MAC Medical Supply Co. and Tec Air Inc. They are the most likely to move because they can retain most of their workforce, who just have to move a little farther, Ennis said.

Focus on the 'next level'

The NWI Forum did a similar campaign when Illinois last raised taxes in 2011, putting up billboards, placing ads on buses and reaching business owners through the Chicago Tribune and Crain's Chicago Business. Indiana also has done several campaigns at a statewide level, including with billboards along the border that asked motorists if they were "Illinoyed" by higher taxes.

The new marketing campaign, however, will target businesses from across the state, as well as residents, Ennis said. It will build on existing slogans the state has promoted such as "A State That Works" and "Taking Indiana to the Next Level."

The NWI Forum is coordinating the campaign with other agencies such as the RDA, the Lake County Economic Alliance and the Greater Northwest Indiana Association of Realtors.

"We want to be organized. We want our message to be crisp and consistent," Ennis said. "Everybody's doing such a great job of telling Northwest Indiana's story. And we keep having more and more positive things to say."

Indiana and the entire Midwest depend on a strong Chicago, but the latest round of tax hikes just reinforce NWI's position as a lower-cost haven just outside the nation's third-largest city with an economy bigger than Thailand's, Lauerman, the Lake County Economic Alliance president, said.

"We're considered the eastern suburb of Chicago, but we have more tax certainty with property tax caps," she said.

The Lake County Economic Alliance is now pursuing 79 projects, the top 20 of which could bring $700 million in investment and 8,500 jobs, Lauerman said. The economic development agency will continue to bring its message to companies at conferences and trade shows in Chicago.

"We tout Indiana's advantages, such as logistics, how we're on the right side of Chicago and how we have Lake Michigan and quality of life," she said. "Lake County will be the primary beneficiary of moves across the border since it's closest to the state line."