Hardware giant True Value bolts from Illinois, lawmaker says move shows business climate concerns

Illinois state Sen. Chris Balkema said True Value’s decision to move its headquarters from Chicago to Fort Wayne, Indiana, is another example of businesses seeking relief from what he described as Illinois’ costly regulatory and tax environment.

True Value, which had maintained a Chicago headquarters for 78 years, announced plans to relocate after being acquired by Indiana-based Do it Best Group. The companies said the move would bring their operations together under one headquarters location.

Balkema, R-Channahon, said the relocation shows Illinois needs to rethink its approach to economic policy.“I’m happy that that is occurring, but I also understand it,” Balkema said. “As I tour businesses throughout the district and the state, the top two things that businesses fear about Illinois and need help in is rules and regulations is absolutely the number one.”

Balkema also pointed to energy policy as a major concern for businesses, specifically citing the Climate and Equitable Jobs Act, which sets a goal for Illinois to transition to carbon-free electricity by 2045.

“The CEJA Act that requires all gas and coal-fired power plants to be shut down 19 short years from now, which means people start scaling back sooner and not doing overhauls, is absolutely having a dramatic effect,” he said.

The senator said True Value’s move was significant because the company did not relocate to a distant region of the country, but instead moved to a neighboring state.

“True Value making a business decision not to move across the country, but to move one state over to our friends to the east, Indiana, is really telling,” Balkema said. “They just want relief.”

Balkema argued Illinois is falling behind states that are competing more aggressively to attract businesses through tax reductions and incentives.

“It’s really the absence of the offense that a lot of states other than Illinois are using to attract businesses,” he said.

He said other states are creating more favorable conditions for manufacturers, particularly as domestic production grows.

“Companies gravitate towards the states that are friendly to them,” Balkema said.

Balkema also cited labor costs as a challenge for Illinois businesses, pointing specifically to workers’ compensation expenses.

“Workers’ compensation costs in Illinois are about twice what they are in Indiana,” he said. “So why would somebody have a labor-intensive workforce here versus in Indiana if the costs are much lower?”

The senator said Illinois needs to focus on reducing regulations and lowering costs to remain competitive.

“We have no problem growing state government. That grows, grows, grows,” Balkema said. “But we have a very large problem growing independent businesses because the current regulations and the future regulations that are queued up would have made the environment for businesses even worse.”

Balkema said he does not blame state workers for government growth but believes the state should look for efficiencies through technology, consolidation and attrition.

“What I find inside the state agency is a bunch of people that just want to do a good job,” he said. “The problem is we have too many of them.”

Balkema said he plans to introduce legislation focused on property tax relief, including proposals for property tax caps.

“One of the most exciting pieces is property tax caps,” he said. “Indiana and California, interestingly enough, both are able to work with property tax caps in place and have much better property taxes than we do.”

Balkema’s comments come amid a broader debate in Illinois over how to balance business growth, regulation, taxes and energy policy.

He said the True Value relocation should serve as a warning that Illinois needs to make changes to its business climate.

“Right now, Illinois has very little reason for folks to feel welcome here that are responsible for a profit and loss statement,” Balkema said. “We’ve got to switch and allow Illinois to be a business-friendly state for large and small businesses alike.”