Tax rollbacks push Illinois ahead in Rich State, Poor State report

 

[April 09, 2015]  By Benjamin Yount
 
 SPRINGFIELD, Ill. — It’s amazing what happens when you let people keep their own money.

Illinois, a perennial bottom dweller in the American Legislative Exchange Council’s annual “Rich States, Poor States” report, has found itself out of the basement.

“It’s a small step being number 40,” ALEC Vice President for State Fiscal Reform Jonathan Williams told Watchdog.org for the podcast Behind the Headlines. “But it’s an important movement, directionally, in the right place.”

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LESS WRONG: Illinois gets higher marks from the American Legislative Exchange Council for getting it less wrong.
Williams said Illinois’ decision to let the 2011 temporary income tax increase expire deserves credit for the state’s highest-ever ranking in the annual report on state economic futures.

Illinois’ raking at No. 40 is the best the state has garnered in the eight years ALEC has been grading states for economic outlook and performance.

But Illinois, Williams said, is simply getting it “less wrong” this year. A lot needs to change before the state “gets it right,” he said.

“Sometimes you have to celebrate those small victories,” Williams said. “But that’s not something you want to write home about as, say, a state marketing official.”

Williams said Illinois still has the worst public-pension crisis in the nation and is an outlier in the Midwest because it is not right-to-work state. And, Illinois still clings to its death tax.

Kim Maisch, the field director for Illinois’ chapter of the National Federation of Independent Business, told Illinois Watchdog in an email that job creators are well-versed in the challenges still plaguing Illinois.

‘When you look at all of the big, bold reforms going on in our neighboring states it isn’t hard to know why we still lag behind,” Maisch wrote. “But certainly among my members they feel like there is hope now that (Illinois) will once again thrive with Rauner as (g)overnor.”

Rauner, a Republican who was elected in November on a promise to lower the income tax and make the state more competitive, has been pushing a plan that includes local right-to-work zones and business reforms, like workers’ compensation reform.

“Goveror Rauner’s Turnaround Agenda will make Illinois more competitive and bring more businesses and jobs to Illinois while empowering voters and communities so they can control costs and property tax rates at the local level, making Illinois a more attractive place to live and raise a family,” Rauner spokeswoman Catherine Kelly told Illinois Watchdog in an email.

But Rauner has run into opposition in the Democrat-controlled Legislature. And cities across the state have lined up against Rauner’s local right-to-work proposals.

Still, Republican lawmakers in Illinois see the ALEC report as a hint the state can crawl back into the competition.

“Everything about what this governor is trying to do excites me because it is decidedly different than what’s gone on for the past 12 years,” state Rep. Ron Sandack, R-Downers Grove, emailed. “Spending less is the starting point, but I love the consolidation of units of government efforts, too. That has an effect on businesses’ confidence in Illinois.”

Williams said when you look at the top 10 states and the bottom 10 states, there are ties that bind.

“(The top states) all value economic freedom and economic competitiveness,” Williams said. “(The bottom states) are states that have a history of being high tax … they’re not that concerned with being competitive.”

Illinois, Williams said, is moving ever so slightly away from the bottom.

[This article courtesy of Watchdog.org.]