SPRINGFIELD (Jan. 24, 2018) – Next week, Illinois Gov. Bruce Rauner will kick off the legislative session with his fourth annual State of the State address. 2017 was not a banner year for Illinois. Illinoisans saw a record 32 percent permanent income tax hike; 115,000 residents abandoned the state on net; and many Illinois homeowners saw their property taxes go up.

The Illinois Policy Institute says lawmakers and the governor need to address the following issues to give Illinoisans hope for a state where residents can thrive and put down roots:

1. Population loss

• In raw numbers, Illinois ranked first in population loss among the 50 states in 2017, losing the title of fifth-largest state in the process.
• Population loss has been a long-term trend in Illinois. Since 2010, Illinois has lost nearly 643,000 people on net to other states. That’s equivalent to the population of the four largest cities outside Chicago combined: Aurora, Rockford, Joliet and Naperville.
• Illinois’ people problem is also its biggest budget problem. As people leave, they take their wallets with them. That means fewer Illinoisans are left to pay the bills.
• Solution: In order to reverse Illinois’ outmigration problem, state leaders must enact policies that encourage economic growth, such as cutting taxes. To make this possible, the state must also bring spending under control. Politicians should peg state spending to what taxpayers can afford.

2. Stagnant employment growth

• Illinois trails the national average in productivity growth and employment growth. Through November 2017, nearly 100,000 Illinois job seekers gave up on finding a job altogether. Around the rest of the U.S., labor force participation rebounded to the tune of 665,000 new participants.
• Most of the state’s jobs growth occurred during the first half of 2017. Illinois added 25,500 jobs on net in the first two quarters of the year – or 86 percent of its total jobs growth. After the state income-tax hike vote, Illinois’ jobs growth slowed to a crawl, only adding 4,000 jobs on net in the final two quarters.
• The 2011 income tax hikes cost the Illinois economy $56 billion in real gross domestic product and 9,300 jobs from 2012 to 2016.
• Solution: One of the most important actions the General Assembly can take is to commit now to structural budget reforms such as implementing a spending cap, thus committing to no future tax hikes. This would signal commitment to growing Illinois and making it business-friendly. A tax climate that is friendly to small businesses will create jobs, which Illinoisans need desperately.

3. Sky-high property taxes

• Government data show average property taxes paid in Illinois grew more than six times faster than household incomes from 2008-2015. That means the real property tax burden – the percentage of household income paid in property taxes – increased by nearly 38 percent.

• More recently, those property tax bills have risen, and returns to investment in home equity have declined in Illinois, meaning property taxes are too often sucking away the savings of middle-class families.

• Solution: Illinois officials must address the major cost-drivers behind local government spending with the goal of reducing the property tax burden.

Experts are available in Chicago to weigh in on how these solutions are vital to fostering a positive future for Illinois.

For bookings or interviews, contact Melanie Krakauer at media@illinoispolicy.org or (312) 607-4977.