Much has been made about the economic woes and population declines of states like California and New York, but recent economic data shows that Illinois is struggling with its own major problems.
Illinois was fifth.the best The unemployment rate in March was 4.8%, higher than any other state and tied for one in the nation. the best The tax burden is high, and net employment increased by only 26,100 people last year, even though the number of government jobs increased by 30,100. according to Data from the Illinois Department of Employment Security. At the same time, residents are evacuating Illinois in droves as the state takes action. Several Japan’s largest pension liability. (Related: Gavin Newsom promises to build 3.5 million homes by 2025; he’s not even close)
Experts told the Daily Caller News Foundation that Illinois’ economic downturn, fueled by oppressive taxes and a high crime rate, especially in Chicago, is driving businesses and residents out of the state. , the tax base is eroding and budget problems are worsening.
“The unemployment rate is very high. Wage growth has lagged behind most other states,” Bryce Hill, director of fiscal and economic research at the Illinois Policy Institute, told DCNF. “The Census Bureau reports that hundreds of thousands of residents leave the state en masse each year, and the state’s population has actually been declining for the past decade. Illinois’ economy lags behind in economic performance.
The state’s population in July 2023 was 12,549,689, a decrease of 32,826 from the previous year and more than 260,000 from April 2020. according to Data from the Census Bureau. In California, the state’s tax revenue has declined due to a similar population decline, resulting in a huge budget deficit of $73 billion expected in fiscal 2024.
“Illinois is in terrible shape in many ways, and the economy is in terrible shape,” ST Karnick, a senior fellow at the Heartland Institute, told DCNF. “Polls show that people cite high taxes as the number one reason they want to leave Illinois, followed by crime and safety. Illinois has the fourth most regulation of the 50 states. Prices are rising and jobs are being lost.”
The state’s pension liability increased by $2.6 billion in fiscal year 2023, totaling $142.3 billion. according to In a report from the State Commission on Government Forecasting and Accountability. Expanding costs due to the national pension crisis are regulations The law, enshrined in the Illinois Constitution in 1970, stipulates that pension benefits may not be “diminished or reduced,” which the state Supreme Court later ruled included cost-of-living adjustments. .
In his February State of the State address, Illinois Gov. J.B. Pritzker announced plans to raise revenue by increasing taxes on sportsbooks and expanding the cap on operating losses that businesses can deduct from taxes to help close the budget gap. I made it. an increase of $726 million; according to To Illinois Capitol News. The state is projected to have a budget shortfall of $891 million next fiscal year.
“Thus, the state anticipates a budget shortfall for the next several years without changes in spending or revenue,” Hill told DCNF. “This is certainly influenced by overseas migration. When we lose people internally, immigrants bring more than $10 billion in income out of the state, which not only hurts the state’s pockets, but also local tax revenue. However, they are not the root cause of the state’s fiscal stress, because the state has significant financial resources that eat into state and local government budgets and crowd out resources. They also have another very big problem to deal with: unfunded pension obligations, which account for a large portion of their income.
Pritzker touted Illinois’ economy in a February speech, highlighting its high rankings compared to other states in infrastructure, education and power reliability. according to To NPR Illinois. Pritzker highlighted the toll that illegal immigration has taken on the state and called on President Joe Biden to coordinate a stronger federal response to the massive influx at the southern border, which Illinois is unable to handle.
“We have grown Illinois’ economy by more than $1 trillion,” Pritzker said in his speech, according to NPR Illinois. “That’s more than most countries. In 2023 alone, we attracted billions of dollars in new business investment and created tens of thousands of new jobs.”
Illinois’ gross domestic product (GDP) growth rate in the fourth quarter of 2023 was just 2.3% year over year, much lower than the 3.4% gross national product in the same quarter and lower than California, which grew 3.1%. Ta. according to to the Bureau of Economic Analysis. Nevada had the highest growth rate in the quarter at 6.7%, followed by Idaho at 6.6% and Utah at 5.4%.
A heavy tax burden weighs heavily on many large companies in Illinois, with Boeing Co., construction equipment maker Caterpillar Inc. and hedge fund Citadel Inc. all announcing plans to downsize their operations in the state in recent years. Violent crime in Chicago is also weighing heavily on business, with an 18% increase in 2023 compared to 10 years ago, with the biggest jumps in theft and carjackings, and a 33% drop in arrests. according to Surveyed by Illinois Policy Institute.
“All of this is completely under the control of the state government,” Karnick said. “For decades, Illinois government has paid far more attention to the well-being of its employees than to its taxpayers. The state has one of the worst pension funding crises in the nation, and that says a lot. However, unfunded debt exceeds $140 billion.
Illinois, this is where your tax dollars go.
Preschool and childcare
K-12 education
higher education
infrastructure
health care
Improving public safety
homelessness prevention
workforce opportunities
Economic developmentAnd eventually it will come back to you.
— Governor JB Pritzker (@GovPritzker) April 26, 2024
The Illinois state government has also moved to strengthen organized labor in the state in recent years, with voters set to vote in November 2022 on collective bargaining rights on wages, working hours, working conditions, and even “economic welfare and workplace safety.” Approved an amendment to the state constitution that would provide guarantees. ,” according to To the Chicago Tribune. The amendment would also ban all right-to-work laws that are common in red states.
“Illinois is stuck in a destructive governance spiral,” Karnick told DCNF. “Bad government lowers living conditions for residents and reduces returns on business investments. People move out or have fewer jobs, and businesses leave the state or downsize their operations. These measures reduce the tax base. To do so, states raise tax rates and use accounting tricks to meet spending targets, which makes things even worse and further damages the state’s economy. Businesses are leaving, and this process is steadily driving the nation toward bankruptcy, the exodus of its most hard-working citizens, and their replacement by immigrants from other countries.”
The Illinois Governor’s Office did not respond to requests for comment from DCNF.
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