Corruption costs Illinois at least $550 million per year

August 5, 2019

The corrupt acts of public officials have cost the state more than $9.9 billion in foregone economic activity since 2000

CHICAGO (Aug. 5, 2019) – Illinois’ and Chicago’s economies are waning after decades of federal investigations, indictments and convictions of elected officials – most recently a state senator and multiple city aldermen.

According to a new analysis by the nonpartisan Illinois Policy Institute, instances of corrupt activity have contributed to the state’s economic slowdown and prevented the private sector from adding at least $550 million to the economy each year. Compared to the other five biggest states in the nation, Illinois has the slowest economic growth and the highest levels of corruption.

The economic consequences of corruption:

  • Overall, the Institute found taxpayers lost out on more than $9.9 billion in economic activity from 2000 to 2017 due to corruption, or a cost of $779 to each Illinoisan.
  • Illinois workers spend a longer time unemployed, see fewer raises and innovate less compared to other states. The state’s high level of corruption contributes to this effect.
  • As companies weigh the risk of doing business in Illinois, they must consider corruption in the form of potential roadblocks, burdensome regulations or “pay to play.”  That causes them to stop or pause expanding their business or hiring more employees, hurting the whole economy.
  • In addition, corruption benefits the politically connected and wealthy at the expense of small businesses and the poor, who do not have the same advantages.
  • Other states such as New York, Florida, California and Texas all have lower levels of corruption than Illinois and faster-growing economies.

A worsening trend:

  • Experts at the Institute estimate the true cost of corruption is likely billions of dollars more when factoring in legal methods of fraud and abuse as well as costs from officials who were never caught or prosecuted.
Politicians can crack down on corruption and eliminate practices that hurt taxpayers and businesses. The Institute recommends the following solutions:
  • Enact a constitutional amendment for redistricting reform, introducing a fair map-making process and ending gerrymandered maps.
  • Abolish the revolving door relationship between lobbyists and lawmakers by establishing a 10-year minimum before being able to take on either role.
  • Lessen the power of the Illinois House Speaker to manipulate and control the legislative process. Rescind the position’s sole power to dole out committee positions and stipends, substitute lawmakers in and out of committees at will, choose which bills come to a vote and dictate when bills are called to a vote.

Quote from Orphe Divounguy, chief economist for the Illinois Policy Institute:
“If the state is serious about tackling income inequality, it needs to root out corruption first. Unfortunately, taxpayers haven’t heard enough from Gov. Pritzker’s administration this year on how he plans to deal with a trend that is not only an ethical concern, but also an economic one.

“Residents can’t afford to see their job prospects lessened because elected officials are allowed to use their positions to benefit the few at the expense of the many. Curbing corruption is the first step in ensuring families and businesses feel secure in Illinois’ future.”

To review the full analysis, “Corruption costs Illinois taxpayers $550M per year,” please visit illin.is/corruption.

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