State report: Illinois economy lags nation, neighbors
The October briefing from the Commission on Government Forecasting and Accountability outlines Illinois’ weak growth, and projects more of the same.
Following one of the most dismal jobs reports in recent memory, another report from an Illinois state agency echoes the poor economic news. And unfortunately for state residents, it predicts more of the same going forward.
“Illinois’ economy continues to lag the nation as well as surrounding states even as the current economic recovery … remains the weakest in the post WWII period,” states the October briefing from the Commission on Government Forecasting and Accountability, or COGFA.
According to the report, the nation’s growth in Gross Domestic Product has averaged 2 percent per year from 2010 through 2016, after adjusting for inflation.
But Illinois’ growth has been about half of that, with growth in Gross State Product hovering around 1 percent for the last three years, after adjusting for inflation.
While the report projects Illinois’ growth will tick slightly upward in coming years, it does not project that the state will break the 2 percent mark.
The report also projects Illinois’ population growth and unemployment rate through 2020.
According to those projections, Illinois’ population will dip slightly in 2018, and at best will hold steady in 2019 and 2020. This in turn will have an effect on the unemployment rate, which is projected to increase in 2018, 2019 and 2020 from its current rate of 5 percent.
Further evidence of Illinois’ staggering economy can be seen in the University of Illinois Flash Economic Index, which is at its lowest level in five years. The index takes into account growth rates in corporate earnings, consumer spending and personal income.
While it may grab headlines every month, a laggard economy isn’t news to many Illinois families. They have continued to struggle in a state that has responded to poor economic indicators – such as the nation’s worst personal income growth – with record tax hikes and refusal of pro-growth reforms.
Even before the $5 billion income tax hike passed by the General Assembly this summer, Illinoisans already saw less income after taxes than residents of every neighboring state. From March 2015 to March 2016, Illinoisans saw nearly a third of their income flow toward income and property taxes.
So how does the state forge a new path toward a healthy economy?
“What Illinois needs to break out from the recent pattern of shrinking population and slow job growth is an influx of new and higher paying jobs,” the COGFA report reads.
One such opportunity for an influx of well-paying jobs – and a case study in Illinois lawmakers’ attitudes toward jobs growth – was Toyota and Mazda’s planned North American auto assembly plant, for which Illinois was in the running.
But that coveted 4,000-job factory will go elsewhere, likely to a southeastern state.
One major reason Illinois lost out? Lack of a statewide Right-to-Work law, according to an interview with an official from Intersect Illinois, the state’s privately run, nonprofit economic development corporation.
One might think this would be reason for the General Assembly to consider implementing Right to Work in Illinois. It’s already the law of land in a majority of states, including nearly all of Illinois’ neighbors.
But soon after this news, Illinois lawmakers moved to ban local officials from enacting Right to Work in their communities under criminal penalty. The Illinois House failed to override Gov. Bruce Rauner’s veto of the measure by a single vote, but it’s likely the bill’s sponsor, state Rep. Marty Moylan, D-Des Plaines, will bring it up for another vote before the veto session ends in early November.
As long as this sort of anti-competitive mentality continues in Springfield, there’s little reason to doubt grim predictions for the state’s economy.