Illinois Ranked 'Worst State To Start A Business' In New Report

CHICAGO — Illinois ranked dead last in a recent ranking of states based on how difficult it is to start a business there.

The study from SimplifyLLC cited the Land of Lincoln's high corporate taxes and the ongoing exodus of educated workers as key factors.

Its findings contrast sharply with Gov. J.B. Pritzker's recent celebration of the state's economic achievements and small business growth.

Illinois came in 51st out of 51 states and the District of Columbia in the report's rankings, edging out California, Connecticut and Louisiana.

Its maximum corporate tax rate of 9.5 percent was the second-highest in the nation, and just 8.1 of businesses owners in the state reported their business was doing "excellent," the second-lowest in the nation.

According to the report, 105,000 educated adults moved to Illinois in 2022 but 159,000 moved out. That puts the net migration for educated workers at nearly -54,000, the third-worst of any state.

Not every metric showed Illinois at the bottom of the barrel. The state came in 34th in job creation, and its 2.4 percent growth in consumer spending put it right in the middle of the pack.

And Illinois is in the top 20 in two of the studies metrics: its 13.7 percent new business growth is the 16th strongest and its 17.2 percent inflation since 2021 is the 15th highest.

Last month, the Pritzker administration touted its success in economic development, citing a record amount of low-interest loans to small business — 145 loans totaling $35.7 million.

And, since 2022, the number of new jobs created by the state's Economic Development for a Growing Economy and Reimagining Energy and Vehicles incentive programs tripled to nearly $3 billion, according to the governor's office.

"Over the last five years, I've worked with the General Assembly to improve our state's business environment and prioritize economic development," Pritzker said in a statement. "We attracted new companies and helped existing ones expand, achieved record job growth, and improved our state's fiscal health. 2023 was another year of historic progress."

SimplifyLLC, which ranked Illinois in last place, is a Wyoming based publication operated by Businessguider LLC offering guides for small business owners.

Data for its report came from the U.S. Census Bureau, the Bureau of Economic Analysis, the Federation of Tax Administrators and the U.S. Senate.

Pritzker's office pointed to other rankings, including Site Selection Magazine's ranking it first in the Midwest for workforce development and second in the nation for corporate investments.

CNBC also ranked Illinois as No. 2 in the nation for both infrastructure and education, although Illinois ranked No. 17 in the business news channel's 2023 Top States for Business rankings.