Director of Government Reform
The Illinois Policy Institute has long warned that Illinois’ high-tax environment hurts the state’s economy. Prior to the 2011 income tax hike, we sounded the alarm that higher taxes would cause people and businesses to leave the state.
While we are still waiting for government agencies to release post-2011 income tax hike state-to-state migration data, United Van Lines, or UVL – America’s largest moving company – released its 35th and 36th annual migration studies covering the 2011 and 2012 years. According to the company, this study is based on the more than 146,000 interstate household moves handled by UVL among the 48 contiguous states and Washington, D.C.
Illinois out migration ranking was #1 in the year of the massive 2011 income tax hike, and #2 in 2012. New Jersey was the only state with a worse outbound traffic rate in 2012, and they were suffering from the aftermath of Hurricane Sandy.
Of Illinois’ 11,211 shipments by UVL, 60.8 percent of the traffic was outbound and only 39.2 percent inbound. This was the worst outbound rate UVL ever recorded for the state of Illinois.
New Jersey replaced Illinois as the outbound traffic leader in 2012, with a 62 percent outbound traffic rate, besting Illinois’ rate of 60 percent.
Illinois out migration ranking was #1 in the year of the massive 2011 income tax hike, and #2 in 2012.
Chicago's out-migration rate is the sixth worst among the 200 largest metros.
Out-migration has long been a problem for Illinois. Our December report, “Still leaving Illinois: An exodus of people and money,” used IRS data to show that between 1995 and 2009, the state lost, on a net basis, more than 806,000 people to out-migration.
According to the report:
“When people leave, they take their income and their talent with them. In 2009 alone, Illinois lost residents who took with them a net of $1.5 billion in taxable income. From 1995 to 2009, Illinois lost out on a net of $26 billion in taxable income to out-migration.”
State-to-state migration data is one of the most important indicators of good or bad economic policy decisions being made by elected officials.
UVL’s most recent study sends policymakers in Springfield a very strong signal that the 2011 income tax hike is punishing our state’s economy. So much so that people are voting with their feet and moving to greener pastures elsewhere.
A new state Legislature is being seated in a few days for the 2013-14 session. Its number one priority should be making the reforms necessary so that it can fully repeal the 2011 income tax hike.
We’ve laid out the policy groundwork to make this happen in our fourth annual alternative budget, Budget Solutions 2013: Innovation for Illinois. Our fifth annual report will be released early this spring.