Executive Summary

Every day, the state of Illinois is in a competition with 49 other states and the rest of the world.  The rewards for succeeding?  More businesses, more jobs, more resources, and a better place to live for all citizens.  Unfortunately, the Illinois economy is lagging behind—and unless we turn away from the government-centered paradigm of the past and adopt common-sense, liberty-based policy solutions, we will remain at the back of the pack.

Our state has seen better days.  For years, our GDP growth has been shrinking, and we have one of the worst employment growth rates in the country.  The state lags well behind the national average in income growth.  As a consequence, the overall economic outlook for the state is abysmal, ranking behind every state except for our highly troubled neighbors, Ohio and Michigan.

But the problem isn’t limited to the economy.  Less than a third of Illinois 8th graders are proficient in reading, and even fewer make the cut in math, displaying a remarkable lack of improvement even as spending on education has increased well past the rate of inflation.  The average cost of a family health insurance plan, meanwhile, is nearly twice as expensive as it is in neighboring Wisconsin.  It’s no real wonder, then, that over 700,000 people have migrated out of Illinois in the last decade.  In terms of economic and population growth, Illinois is shrinking compared to almost every other state.

What is behind all these problems? It’s become all too typical to blame businesses and call on government for more action.  But to do so ignores the fact that it is the failed policies of government that brought on many of these woes.  It also ignores the fact that all tax revenue, all wealth, and, ultimately, all charity must ultimately come from the profits of those very businesses that are being demonized.

Luckily, there are common-sense solutions to our problems.  Illinois’ high taxes (including the highest sales tax in the nation in Cook County) need to be reduced to encourage entrepreneurship and investment.  Pay-as-you-go rules need to be implemented to stop runaway spending and reduce our billions of dollars of debt.  Government must be held accountable by making spending more transparent and open to the public.  To provide our children with the best education possible, damaging caps on charter school enrollment must be eliminated, and tuition tax credits must be increased.  Health care must be reformed by repealing burdensome mandates and allowing citizens to buy from out-of-state providers, creating a national market that can provide the care consumers need at a price they can afford.

These recommendations—and more—are outlined in the Illinois Policy Institute’s Liberty Agenda for Illinois.  These are not partisan proposals.  They are simply the only way that Illinois can bring back the jobs, prosperity, and commerce needed to sustain us in the future.  We can move forward only by rejecting the government-centered paradigm that created the problems we currently face.  By choosing liberty and opportunity over bureaucracy and corruption, Illinois can become an innovative economic leader that serves as a shining example for the rest of America—and a better place to live for all citizens.

Illinois Fast Facts

Out of the 50 states, Illinois ranks 48th in economic performance.  According to the ALEC-Laffer State Competitiveness Index, Illinois is doing better than only two states: Michigan and Ohio.

According to this report, as well as government data, Illinois also ranks:

• 44th in economic outlook.  Neighboring Indiana and Missouri rank well ahead in terms of future opportunity, at 12th and 17th respectively.
• 44th in GDP growth, averaging only 3.83% over the last decade. Illinois GDP growth has declined since 1977 at a rate from 7.6% to 5.9%.
• 46th in debt burden.  Illinois continues to spend government revenue growth on government expansion rather than funding past debt obligations, including pensions.
• 44th in personal income growth over the past decade, averaging at 3.83% while the U.S. average is 4.19%.
• 48th in employment growth from 1977 till 2007, ranking ahead of only Michigan and Ohio.
• 37th in improving its standard of living, growing at only 1.13% per year over the past decade. While Illinois ranks relatively high in standard of living (18th), the state continues to fall farther down the ranks.
• 48th in net migration, with over 735,768 people having left the state from 1997-2007.
• 7th highest in median property taxes paid.
• 14th highest overall tax burden in the nation.
• 11th highest in property tax burden.
• 4th highest gas tax burden (approximately 40 cents per gallon).
• 1st in sales tax burden (Chicago & Cook County).
• Illinois is shrinking in wealth, once ranking as high as 6th in per capita personal income and dropping to 12th in 2008.
• The growth of the Illinois economy has lagged the rest of the country for each of the last three decades.

The solution: lower taxes, restraint in spending, and working to create a business-friendly environment that empowers entrepreneurs, investors and workers instead of expanding the government’s role in our lives.