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 Nestled in central Illinois, Decatur
is the largest city in Macon County and accounts for more than two-thirds of its
population.
And being right in the middle of the state, Decatur is an intersection of the
various parts of Illinois’ economy. Residents work in manufacturing, health
care, energy, agricultural processing, education and a variety of other fields.
But residents are leaving. And the city is shrinking as a result.
Numbers from the U.S. Census Bureau show Decatur’s population declined by 3,400
residents from 2010 to 2016, or 4.5 percent. Among Illinois cities with
populations over 50,000, Decatur’s losses were the worst in the state on a
percentage basis.
So why is Decatur’s population declining?
 One possible cause is the city’s sluggish job market. The Decatur metro area
gained only 100 jobs from August 2016 to August 2017, according to data from the
Illinois Department of Employment Security. But the metro’s unemployment rate
actually fell over the same period. This suggests people are dropping out of
Decatur’s labor force altogether.
Furthermore, its manufacturing base is being hollowed out. Since the turn of the
century, Decatur, like the rest of Illinois, has seen a massive reduction in the
number of people manufacturers employ. In 2000, Decatur had 14,000 manufacturing
jobs, but by 2016 manufacturing jobs had dropped 28 percent to a little more
than 10,000, according to figures from Illinois Manufacturers’ Association CEO
Greg Baise reported in the Herald & Review.
Companies continue to reduce operations and some have even pulled out
completely. Meda Pharmaceuticals, for example, announced in March 2017 its plans
to close its Decatur plant. Though there is an occasional transfer or influx of
manufacturing jobs into the city, in general, residents of Decatur have seen
manufacturing jobs grow scarcer and scarcer. Meanwhile, workers in neighboring
states are seeing much stronger manufacturing recoveries.
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Illinois’ economic
policies make it harder to compete with other states for coveted
manufacturing jobs. The Prairie State has the highest workers’
compensation costs in the Midwest and some of the highest property
taxes in the nation, at double the national median. Not only do high
property taxes hurt homeowners, but they also take a toll on
businesses of all sizes, including manufacturers.
This points to another possible reason for Decatur’s population
decline: the area’s relatively high tax burden. Research from the
nonpartisan Tax Foundation shows the median property tax bill for a
Macon County homeowner is $2,004 annually. Macon County’s median
property tax bills are above the state median – in a state that
itself has some of the highest property taxes in the nation.
And the General Assembly
has done little to help reduce the overall tax burden.
In 2011, lawmakers hiked the state income tax 67 percent, raising
the state individual income tax rate to 5 percent, up from 3
percent. Though billed as temporary, the individual income tax rate
never returned to its previous rate of 3 percent, but dropped to
3.75 percent in 2015 from 5 percent.
Middle-class Decaturites, however, never really felt the full
effects of the drop in the income tax. Though there was a partial
sunset of the 2011 income tax hike in 2015, that same year the
Decatur City Council voted to raise the property tax levy by nearly
15 percent.
These tax hikes at both the state and local levels didn’t happen in
a vacuum. Lawmakers raised these taxes during a time when
Illinoisans experienced almost no income growth. During the Great
Recession era, Illinois tied with Nevada for the worst personal
income tax growth in the nation, as incomes only grew 0.8 percent
each year.
Despite these hardships, there’s no sign help is going to come from
the Statehouse. On the contrary, lawmakers passed the largest
permanent income tax hike in Illinois history in summer 2017,
raising the state individual income tax by 32 percent, to 4.95
percent from the previous rate of 3.75 percent.
Increasing state and local tax burdens, combined with stagnant
income growth, are going to hurt residents wherever they reside –
and give many a reason to leave. Decatur has seen that firsthand.
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