Business to Springfield: Get house in order

Groups say voters want greater fiscal responsibility

Thursday, November 04, 2010

The Democrats who run Springfield appear to have survived the Republican surge that changed the game in Washington, but they should take note of voters' anger over government spending, job loss and the economic malaise, Illinois business groups warned Wednesday.

"I hope the message was sent to get your fiscal house in order," said Gregory Baise, president and chief executive of the Illinois Manufacturers' Association. "Businesses do not like to operate in a bankrupt state."

Should Gov. Pat Quinn maintain his razor-thin lead over Republican challenger Bill Brady, the state's Democratic leadership will continue relatively unscathed. Despite the loss of some seats, Democrats will continue to dominate the General Assembly.

Nonetheless, business organizations are hoping Tuesday's election results will act as a wake-up call for state government.

"Folks who have won elections in Illinois ... need to realize they will be confronted by conditions as serious as have ever been faced by the legislature or governor in the history of Illinois, and there is no easy answer," said R. Eden Martin, president of the Civic Committee of the Commercial Club of Chicago, a nonpartisan business group that wants the state to tackle its massive deficit and unfunded pension liability.

Such issues have begun to factor into company decisions on where to locate operations, with some opting to open facilities in other states.

If Quinn wins the governor's race, the state's approach is likely to focus more on a tax hike and less on budget cuts, some business observers say. Quinn has called for tax increases to help balance the budget, while Brady advocated cutting spending instead.

"We're more likely to see incremental nibbling around the edges of the budget problem," said Doug Whitley, president and chief executive of the Illinois Chamber of Commerce.

"I think we'll see tax increases to balance the budget, so it will be a little tougher for businesses to operate," said Chicago business veteran Warren Batts, an adjunct professor of strategic management at the University of Chicago's Booth School of Business.

Batts is chairman of Methode Electronics Inc. and formerly was chief executive of Tupperware Corp., Premark International Inc. and Mead Corp.

The state's to-do list should include several key points, the chamber said, among them reducing worker compensation costs, developing a more business-friendly attitude within state agencies, proving greater financial stability and continued investment in transportation infrastructure.

On the national level, business leaders are hoping to see elements of their agendas move forward now that the House has a Republican majority.

"I hope Congress will moderate its spending habits and will make some modifications, if not repeal, the health care act," said Baise, who also expressed support for free-trade measures.

His group was "quite delighted" at the defeat of several Democratic congressmen from Illinois who differed with the organization on key business issues, he said, among them Debbie Halvorson, Bill Foster and Phil Hare. He also cited Melissa Bean, who remained locked in a close battle with Republican challengerJoe Walsh late Wednesday.

Other organizations, such as the National Retail Federation, said the divided Congress could act as a backstop against tax increases or pro-union legislation.

Indeed, extreme partisanship seems likely to continue, some say.

"I think we'll see a reverse of what we've seen for the last two years, where the Republicans blocked the Democrats as best they could," Batts said. "Now, the Democrats will block the Republicans. I can't see an epiphany happening, where they say, 'Let's work together for the good of the country.'"