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 It’s the same grim story to which Illinoisans have grown
accustomed: We’re shrinking. And it’s getting worse.
New numbers released Dec. 19 from the U.S. Census Bureau paint a stark picture.
The chaser is that there are policy solutions on the table to bring back some
hope to Illinois. But before you can fix the problem, you need to understand it.
Here’s the rundown of what the new data tell us. And what direction they should
point state lawmakers.
The headline number comes first: 45,116.
That’s how much Illinois’ population shrank from July 2017 to July 2018.
It’s the fifth year in a row the state has lost people. And the fifth year in a
row that the loss has gotten worse. No other state finds itself adrift in five
consecutive years of worsening population decline.
 Since Illinois’ population growth dipped into the red five years ago, Illinois
has shrunk by more than 157,000 residents. It’s as if Joliet, Naperville or
Rockford were wiped off the map. Those are the state’s third-, fourth- and
fifth-largest cities.
What’s driving the population decline? Far more Americans are leaving Illinois
for other states than coming in. Illinois lost more than 114,000 people on net
to other states over the year – an exodus almost unchanged from the previous
year.
One person every 4.6 minutes. Or 313 each day.
That’s a daily passenger plane full of Illinoisans moving to greener pastures,
for two years straight. Most will never return.
But who are these people? And why are they leaving?
Government data show that those leading the march out of Illinois are between
the ages of 25 and 54. In other words, they’re in their prime working years.
This poses another problem: When Illinoisans able to bear children leave, fewer
children are born Illinoisans.
The state is having a baby bust.
Since 2011, Illinois has seen an 8.8 percent decline in births. That’s the
fourth-worst slide in the nation and more than twice as severe a decline as the
average state. Births still outpace deaths. But the margin is getting smaller
every year.
That makes Illinois’ loss of people to other states – and figuring out why those
losses are happening – all the more important. Natural growth in the population
won’t be able to mask them.
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Using a methodology developed by Federal Reserve
economist Joshua Gallin and data from the IRS, Illinois Policy
Institute research shows the primary driver of Illinois’
outmigration over the past decade is a weak labor market, which
includes factors such as tax policy, the unemployment rate and wage
growth.
Taxes appear to be a particular pain point. Half of
Illinoisans told pollsters they wanted to leave the state in 2018,
and the No. 1 reason was high taxes.
Clearly, the permanent income tax hike state lawmakers passed in
July 2017 hasn’t helped fix the state’s people problem. Families are
rejecting Illinois soil as a place to plant roots. And that poses a
major challenge in fixing the state’s fiscal problems.
With fewer young people left to pick up the tab for Illinois’
hulking pension debt, for example, the math only becomes more
impossible.
This news, year after year, is enough to make the most optimistic
Illinoisan a hardened cynic. But since we know a poor labor market
is the primary driver of this problem, lawmakers should be looking
at proven pro-growth policies to reverse the trend.
The first is a spending cap tied to economic growth, which will
prevent the need for future tax hikes and provide certainty to
residents and businesses.
But then there’s pension problem. Without reform, fewer Illinoisans
will be left to shovel an ever-larger pile of debt. Moody’s
Investors Service earlier this year pegged Illinois as having the
highest pension-debt-to-revenue ratio ever recorded for a state. But
a speech last week from Chicago Mayor Rahm Emanuel pointed a light
toward some relief: a constitutional amendment.
Specifically, the amendment would protect all pension benefits that
public employees have already earned, but allow for reasonable
changes to future benefit accruals. That means the state couldn’t
slash a penny from current retirees’ checks. But lawmakers could
finally make reforms, like ending automatic, compounding 3 percent
benefit increases throughout retirement.
Gov.-elect J.B. Pritzker and the new General Assembly will have a
lot on their plates next year as they try to paper over yet another
big budget deficit.
But Illinois’ biggest budget problem is its shrinking population.
And if lawmakers don’t take steps toward spending reform, they
shouldn’t expect their constituents to hang around.
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