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 There are fewer Illinoisans working today than there were 10 years ago. Millions
of Illinoisans are feeling the brunt of the state’s economic pain and financial
meltdown in the form of joblessness and hopelessness. Too many families are
dealing with unemployment and underemployment, and too few are able to find
their dream jobs in the Land of Lincoln. That’s because Illinois has the Great
Depression economy of the Midwest.
In fact, Illinois’ economic growth is worse than during the worst years of
America’s Great Depression. Illinois’ gross state product, which measures total
economic activity, has increased by barely more than 4 percent over the past
decade. In comparison, the U.S. gross domestic product during America’s Great
Depression increased by nearly 10 percent during the worst decade of the Great
Depression, from 1930-1939.
America’s Great Depression started off worse from 1930-1932, but the recovery
came on stronger. By contrast, Illinois did not have as steep of a fall during
the first years of the Great Recession, but Illinois’ recovery from the Great
Recession has been abysmal.
Illinois suffers from depressed economic growth, and state policymakers have
repeatedly chosen the path that prevents prosperity. Illinois lawmakers hiked
state personal income taxes by 67 percent in 2011. While those income tax rate
increases partially sunsetted in 2015, local property and sales taxes have also
risen. In the face of economic calamity, Illinois has tried to tax its way back
to prosperity.
Taxes keep going up because the state has failed to address its deepest problems
–gargantuan pension and retiree health care debts and uncontrolled spending on
government payrolls. Illinois’ debts are spiraling out of control, its bonds are
headed for junk status, and politicians have responded by repeatedly raising
taxes.
The debts need to be brought under control because good job opportunities,
economic growth and income-earning power are fleeing the state. That’s why
Illinois has the worst personal income growth in the entire country – tied only
with Nevada – over the Great Recession era. Personal income has grown by only
0.8 percent per year in Illinois from the end of 2007 through 2016.
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Illinois’ governing class has failed to make the state sustainable for future
generations. Illinoisans are fleeing the state, and millennials – made up of
college students and young working adults – are getting out fastest.
Illinois now loses, on net, one person every 4.6 minutes to other states. As a
result, Illinois has been shrinking since July 2013, according to the U.S.
Census Bureau. Illinois’ population is down by 78,000 over the last three years
due to massive out-migration. In contrast, all states around Illinois are
growing.
Illinois’ problems have been caused by political failure to embrace reforms that
would bolster economic growth and bring debts under control. The state’s
political leadership has racked up hundreds of billions of dollars in debts that
likely can never be repaid, yet the General Assembly refuses to change course.
Taxes have consistently gone up, debts are spiraling out of control, and yet the
Illinois legislature hasn’t changed anything of substance.
More taxation is not the answer, and Illinoisans have had enough. Sixty-four
percent of Illinoisans oppose another income tax increase as part of a budget
deal, according to a May poll commissioned by the Illinois Policy Institute.
More taxes would simply sink into a black hole of debt that politicians have
shown no interest in fixing.
Illinois needs to choose a course of reform or accept the inevitability of state
and municipal bankruptcy. The state is bleeding red ink, and will continue to do
so until lawmakers bring debts under control. The state’s economy is struggling
under the current burden of debt, taxation and regulation; more of the same will
inevitably fail.
It’s time to change course, or Illinoisans will continue to change their
residence to other states. Until the state adopts meaningful reform, Great
Depression economic growth will be the norm in the Land of Lincoln.
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