Maybe now Illinois will shed its bad policies?
According to the U.S. Census Bureau, Illinois lost 37,000 residents aged 25 to 54 from July 2016 to July 2017. A total of 115,000 people left during that time period.
Eight other states experienced population loss, but Illinois lost the most. How could this happen in a state that has bustling Chicago? Gee, maybe the bad economic policies?
I grew up around Chicago but now reside in Oklahoma. I would love nothing more than to move back home. Chicago will always be home, but I will not go back until the state figures out its debt problems and eliminates the corruption.
Seems like I’m not the only who has seen the light. America’s working-age population grew by .4% between July 2016-July 2017, but Illinois dropped in that age group by .8%. From Illinois Policy Institute:
Since the end of the Great Recession, Illinois’ prime working-age population has declined 5 percent while the U.S. prime working-age population has grown 1.4 percent. Over this timeframe, Illinois again saw weaker growth in every prime working-age population cohort. The most severe divergence was in ages 25 to 29, which grew 1.5 percent nationally but shrunk in Illinois. (While the Great Recession ended in 2009, the most recent base year for the Census data is 2010, meaning measuring post-recession population change begins in 2011.)
Not only is Illinois hemorrhaging its current workforce, but population losses are also compromising its future workforce. Decline in Illinois’ youngest population cohorts are more severe than in the rest of the nation. From July 2016 to July 2017, Illinois’ population ages 0-24 declined by 1.2 percent while it declined by 0.2 percent in the rest of the U.S.
Illinois’ population ages 0-14 shrunk by 1 percent over the year, but that population nationally saw a small increase over the same time.
The Illinois Policy Institute found income growth is stale in the Land of Lincoln:
In the rest of the U.S., personal income grew 28 percent faster than Illinois from 2015 to 2016, according to the Bureau of Economic Analysis. In addition, Illinois job seekers stay unemployed 33 percent longer than unemployed workers in the rest of the nation, according to government data. This helps to explain why other states offer more opportunity.
The state of Illinois’ economy is one reason the 2017 tax hikes were such a poor policy choice. By costing the state thousands of jobs and billions of dollars in economic activity, the recent tax hike will exacerbate the state’s outmigration crisis. State lawmakers cannot continue to rely on tax hikes if they want families to bet on Illinois.
Chicago and Cook County
The Chicago Tribune spoke to Marzena Maka, 25, and Nick Gitchell, 24. Both work downtown and live in Chicago and have seen friends move to places like Texas due to lower living costs. Maka lives in Garfield Ridge, located on the southwest side, and would like to move closer to the Loop, but the cost of living has hampered those plans.
Gitchell grew up in the suburbs, but would eventually like to leave due to “the cost of living.”
University of Illinois at Chicago professor Janet Smith and other researchers discovered that Chicago lost a large chunk of the middle class, leaving Chicago with a population “on opposite ends of the income spectrum.”
PNC chief economist Gus Faucher said the industry growth in the suburbs may attract a lot of millennials to the metropolitan area. Losing such a large population could cause major problems for Chicago:
“If the population is not growing, that could lead to economic stagnation,” Faucher said.
Job growth in the Chicago area has lagged behind other parts of the country, and that along with a high cost of living and crime could all entice millennials to move elsewhere, Faucher said.
In some cases, the beneficiaries could be other Cook County communities that have access to urban amenities — at a lower price.
Illinois as a Whole
While Chicago plays a major part in Illinois, we shouldn’t discount the rest of the state. After all, the laws passed affect those areas, too. The Illinois Policy Institute stressed that the state must change its “unfriendly business environment that discourages investment and job creation, and punishes residents with high taxes.”
Illinois finally passed a budget last July after a two-year stalemate, but it didn’t do much to help and the Democratic legislature pushed through a $5 billion income tax-hike. The bill also included a corporate tax hike, making the state even less business friendly:
The budget plan would spend more than $36 billion on primary and secondary education, colleges and universities, social services, medical care for the poor and other government functions, with nearly $5 billion in new taxes to help pay for it. The personal income tax rate would rise from 3.75 percent to 4.95 percent. The corporate tax rate would go from 5.25 percent to 7 percent. The plan also would have the state pay down about half of the nearly $15 billion pile of unpaid bills through a combination of borrowing and using cash from other state accounts.
The state’s budget deficit grew to $14.6 billion (52%) in 2017. The state had at the time $16.67 billion in unpaid bills:
The comprehensive annual financial report for the fiscal year that ended June 30 showed the deficit more than doubling on a budgetary basis, to nearly $8 billion from $3.54 billion in fiscal 2016. Fiscal 2017 also marked the 16th straight year of deficits for the nation’s sixth-largest state.
“This report makes clear that Illinoisans continue to pay the price for the state’s disastrous budget impasse, in the form of late payment interest penalties and a state government that is weakened at almost every level by the inability to pay its bills on time,” said Jamey Dunn, spokeswoman for Democratic Illinois Comptroller Susana Mendoza.
Illinois has to stop spending. The state legislature passed a budget this month and I think it only happened because none of the lawmakers want to have a stalemate on their shoulders for elections in November. Yes, even Republican Governor Bruce Rauner approved and signed the bill:
They also reflected the changed dynamics at the Capitol, where Rauner for the first time focused on achieving a stand-alone budget rather than a broader deal that included his legislative agenda aimed at reducing regulations on businesses, freezing property taxes and reining in politicians’ power.
Instead, the governor asked only for a budget that spends no more than the state takes in and requires no new taxes. That’s what lawmakers say they are sending him — a task made easier by several billion dollars from a tax hike that was passed last summer over Rauner’s objections.
Left for another day were some of the state’s most pressing financial problems: A backlog of unpaid bills that stands at $6.6 billion and a massive pension debt that’s on track to consume a growing portion of Illinois’ annual revenue.
Also set aside was Rauner’s call for retirement system changes that he said could allow for a modest quarter-percent rollback of the state income tax. The plan projects $445 million in pension cost savings through voluntary buyouts, but it spends those savings rather than returning them to taxpayers via lower taxes.
Rauner noted to the media that the budget does not have enough to lower Illinois’s debt “and reforms that would reduce taxes, grow our economy, create jobs and raise family incomes.”
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