Nearly one in four Illinois small business owners named taxes as their single biggest problem in a new state-level report released Thursday, July 9, a finding with particular relevance in Lake County, where effective property tax rates run between 2.1% and 2.3% of market value.

The National Federation of Independent Business's first Illinois-specific Small Business Economic Trends report placed the state's optimism index at 97.3 for the October 2025 through March 2026 survey period. That trails the national average by 1.2 points.

"This data confirms what I hear from small business owners across the state," said Noah Finley, NFIB Illinois state director. "While they love their communities, many small business owners are discouraged by Illinois's tax-and-spend policies and growing regulatory burdens, making them less likely to hire or create jobs here in Illinois."

Where Illinois lags

Of the ten index components, four scored worse in Illinois than nationally, with job openings and earnings showing the steepest deficits. One bright spot: current inventory levels ran four points above the national mark, suggesting recent sales have been solid even as confidence lags.

The 23.2% of Illinois owners citing taxes as their top concern compares with 17.3% nationally, according to the NFIB report. Illinois ranks 38th on the Tax Foundation's 2026 State Tax Competitiveness Index, and property taxes account for 32.3% of all state and local tax revenue.

Even in Lake Forest, which claims the county's lowest property tax rate according to the city's tax rate comparison, property owners see 78% of their bill flow to schools, the county, and other taxing bodies beyond city control.

The NFIB's separate monthly national index fell to 95.3 in May 2026, below its 52-year average of 98.0. Capital spending plans dropped to 16%, the lowest since March 2009, as national small business bankruptcies rose 50% year-over-year in the first half of 2026, according to the American Bankruptcy Institute.

Holly Wade, executive director of the NFIB Research Center, said the new state-level report allows the organization to "better understand business conditions and the unique challenges owners face in Illinois." The Illinois edition is the first such seasonal release; no follow-up publication date has been announced.

Local revenue picture

Lake Bluff's Finance Committee discussed diversifying the village's revenue base at its Monday, June 22 meeting, with Finance Director Bettina O'Connell noting heavy reliance on auto-related sales tax. A potential sales tax sharing agreement with Zeigler Auto Group, which committed to roughly $6.9 million in facility improvements, is under consideration. A reinstated local food and beverage tax could generate $250,000 to $300,000 annually, according to the committee discussion.