THE BLOG
12/18/2014 06:35 pm ET Updated Feb 17, 2015

State Steps on Entrepreneurs, Gives Others a Leg Up

When Sara Travis, 28, decided to build her own business, she got started in Chicago, her hometown.

She founded The Brew Hub, a mobile coffee-vending business that sells iced coffees and teas, in 2013. For more than a year, Sara petitioned the city of Chicago to give her a permit so she could legally operate her popular business throughout Chicago neighborhoods.

But city bureaucrats just took her in circles, and eventually Sara had to make a tough decision: continue operating illegally without hopes of legitimately growing The Brew Hub, or move.

In 2014, she and her business left for Austin, Texas.

Sara is one of many who have struggled in vain with a bureaucracy set up to make it as difficult as possible to compete with existing businesses. But when Chicago and Illinois as a whole make it hard to start a business, would-be entrepreneurs aren't the only ones hurt. Illinois' moribund jobs climate has left too many wanting for work for too long.

While politicians have touted drops in the state's unemployment rate in recent months, one of the main drivers behind Illinois' 6.6 percent rate is people dropping out of the workforce. Illinois' real unemployment rate, which reached 20 percent during the depths of the recession, is still in the high teens.

Illinois' workforce is still down by more than 37,000 since February 2014, though the working-age population grew by 35,000.

At this pace, the state still has seven more years left until it fully recovers from the Great Recession.

In short, Illinois' economy is lagging behind the rest of the U.S. The state needs all the Saras it can get.

Still, all the government has done for Sara and many like her is get in the way.

But for others, the government is happy to subsidize opportunities for growth.

In fact, the state of Illinois has a whole program dedicated to this cause. The Illinois State Trade and Export Promotion, or ISTEP, program gives businesses financial assistance to grow their exports.

The ISTEP program hands out money to businesses in three ways:

  • Group trade missions -- the state will reimburse companies for 25-75 percent of travel costs (up to5,000) associated with trade show booth fees, group ground transportation, interpreters and more for companies attending events such as the Global Petroleum Show 2015 in Calgary, Canada. Also includes partial travel reimbursement for two Illinois company representatives, including economy class airfare and standard hotel room.
  • Individual foreign market sales missions -- if none of the scheduled group trade missions apply to your business, the state will reimburse your company for 25-75 percent of travel costs (up to7,500) associated with trade-show participation. Includes partial travel reimbursement for one Illinois company representative, including economy-class airfare and standard hotel room.
  • Product compliance certification -- face it -- it costs a lot of money to comply with government regulations, and the government knows it. But a few lucky businesses can apply for financial assistance with costs associated with foreign government regulation for things such as agricultural products, registration with the International Organization for Standardization, and packing and recycling laws. The state offers assistance for 50 percent of costs, not to exceed5,000.

To qualify for any of this money, you have to meet certain standards. You can't have more than 500 employees and you must have at least $250,000 in annual revenue.

One company that benefitted from ISTEP's favor-granting was Safari Coffee Cup, a Chicago-based coffee roaster that received $443.28 in travel expenses related to the 2014 Foodservices Association Show in Toronto.

That might not seem like a lot of money, which might make it seem like not such a big deal. But 273 Illinois companies have received assistance through the ISTEP program since it began on Oct. 1, 2011. And the faulty morality of throwing a bone to one coffee company while smothering another with overbearing regulations shouldn't be overlooked.

The state doesn't just dole out money for exports. It has also given out nearly $1 million to Illinois' wine industry in recent years for marketing, tourism development, agricultural research, and even bottle washing and tasting room construction.

From 2011-2013, the state gave Cooper's Hawk Holding LLC $131,766 to purchase bottle-washing equipment. In 2013, Alto Vineyards LTD got $72,902 to build a new tasting room and events facility.

To recap: Sara Travis got the cold shoulder, but other beverage businesses got money from the state.

As Illinoisans struggle amidst one of the worst economic recoveries in the nation, the last thing state government should be doing is supporting some private businesses in the face of those it has stifled.