Illinoisans saw jobs growth plummet after 2017 tax hike

Illinois' jobs growth trailed that of the nation during the first half of 2017, then slowed to a halt in the wake of the General Assembly's record-breaking tax hike.

Illinois’ 2017 jobs picture was defined by mild growth in the first half of the year followed by dismal growth in the latter half of the year, according to monthly jobs data released Jan. 19 by the Illinois Department of Employment Security.

Notably, the Illinois General Assembly passed the largest permanent income tax hike in Illinois history in July 2017.

The year started out relatively strong for most industries in Illinois, leading to robust jobs growth over the year in the construction, mining, financial activities and manufacturing sectors. But total jobs growth over the year clocked in at a meager 0.5 percent.

From January 2017 to June 2017, Illinois gained 25,500 jobs – a growth rate of 0.43 percent. Those gains in the first six months of 2017 represented 86 percent of the jobs growth for the entire year.

However, during the second half of the year, from July to December, the state added only 4,000 jobs – a growth rate of 0.07 percent.

Meanwhile, the rest of the United States experienced strong employment gains that outpaced Illinois, and saw even stronger gains during the second half of 2017.

Despite a relatively solid start to the year in terms of private-sector job creation, Illinois’ labor market weakened in the second half of the year. Uncertainty in Springfield and lawmakers’ record of raising taxes has made Illinois a less attractive place to invest.

December saw jobs growth driven by government sector

Illinoisans saw 1,500 new jobs on net in December 2017. Government payrolls led the way, accounting for 39 percent of the net new jobs in December.

But the following sectors were all losers to close out the year: mining; trade, transportation and utilities; information; financial activities; professional and business services; education and health; and leisure and hospitality.

Déjà vu: Illinois shackles state economy with tax hikes

The slowdown of Illinois’ economy in the second half of 2017 is not surprising to experts. It’s only a glimpse of what’s to come. With a declining population, the employment picture and the state’s economy are likely to continue down this sluggish path barring reform, just as they did after the 2011 tax hike.

The Illinois Policy Institute recently estimated that the income tax hike lawmakers passed in 2011 cost the Illinois economy 9,300 jobs and $56 billion in real gross domestic product from 2012 to 2016. This is a conservative estimate given historical data.

Measuring the effects of tax changes on the economy is a challenging task. But fortunately, there’s a large body of expert literature that addresses difficult empirical challenges and proposes economic theories that are consistent with the evidence. Romer and Romer (2010) find that tax increases have a negative impact on real gross domestic product, due to the negative effect of taxation on investment. These results are consistent with the findings of Blanchard and Perotti (2002) and Mountford and Uhlig (2009).

Lawmakers should begin working to provide tax relief for all Illinoisans by constraining the growth of government in order to avert future tax hikes and begin to roll back the 2017 tax hike. A fiscally solvent state government will restore a sense of security about the future, making Illinois a more attractive place in which to plant roots and invest.

Illinoisans need to hold their lawmakers accountable by urging them to begin rolling back the 2017 tax hike before the situation worsens.

The following is a list of state lawmakers who voted at least once for the 2017 tax hike:

Illinois House of Representatives

Carol Ammons, D-Champaign
Steven Andersson, R-Geneva
Jaime Andrade, D-Chicago
Luis Arroyo, D-Chicago
Daniel Beiser, D-Alton
Terri Bryant, R-Mt. Vernon
Daniel Burke, D-Chicago
Kelly Burke, D-Oak Lawn
Kelly Cassidy, D-Chicago
John Cavaletto, R-Salem
Linda Chapa LaVia, D-Aurora
Deb Conroy, D-Villa Park
Melissa Conyears-Ervin, D-Chicago
Fred Crespo, D-Streamwood
Barbara Flynn Currie, D-Chicago
John D’Amico, D-Chicago Heights
C.D. Davidsmeyer, R-Jacksonville
William Davis, D-East Hazel Crest
Anthony DeLuca, D-Chicago Heights
Scott Drury, D-Highwood
Marcus Evans, D-Chicago
Sara Feigenholtz, D-Chicago
Laura Fine, D-Glenview
Mary Flowers, D-Chicago
LaShawn Ford, D-Chicago
Mike Fortner, R-West Chicago
Robyn Gabel, D-Evanston
Jehan Gordon-Booth, D-Peoria
LaToya Greenwood, D-East St. Louis
Will Guzzardi, D-Chicago
Michael Halpin, D-Rock Island
Norine Hammond, R-Macomb
Sonya Harper, D-Chicago
David Harris, R-Mount Prospect
Greg Harris, D-Chicago
Chad Hays, R-Danville
Elizabeth Hernandez, D-Cicero
Jay Hoffman, D-Belleville
Frances Ann Hurley, D-Chicago
Sara Wojcicki Jimenez, R-Springfield
Thaddeus Jones, D-South Holland
Stephanie Kifowit, D-Aurora
Lou Lang, D-Skokie
Camille Lilly, D-Oak Park
Mike Madigan, D-Chicago
Theresa Mah, D-Chicago
Natalie Manley, D-Joliet
Robert Martwick, D-Chicago
Rita Mayfield, D-Waukegan
Charles Meier, R-Highland
Bill Mitchell, R-Decatur
Christian Mitchell, D-Chicago
Anna Moeller, D-Elgin
Elaine Nekritz, D-Buffalo Grove
Brandon Phelps, D-Harrisburg
Reginald Phillips, R-Charleston
Robert Pritchard, R-Sycamore
David Reis, R-Olney
Al Riley, D-Hazel Crest
Robert Rita, D-Blue Island
Sue Scherer, D-Decatur
Carol Sente, D-Buffalo Grove
Elgie Sims, D-Chicago
Justin Slaughter, D-Chicago
Cynthia Soto, D-Chicago
Juliana Stratton, D-Chicago
Silvana Tabares, D-Chicago
André Thapedi, D-Chicago
Arthur Turner, D-Chicago
Michael Unes, R-Pekin
Litesa Wallace, D-Rockford
Lawrence Walsh, D-Joliet
Emmanuel Chris Welch, D-Westchester
Ann Williams, D-Chicago
Kathleen Willis, D-Northlake
Michael Zalewski, D-Riverside

Illinois Senate

Omar Aquino, D-Chicago
Scott Bennett, D-Champaign
Jennifer Bertino-Tarrant, D-Plainfield
Daniel Biss, D-Skokie
Melinda Bush, D-Grayslake
Cristina Castro, D-Elgin
James Clayborne, D-East St. Louis
Jacqueline Collins, D-Chicago
John Cullerton, D-Chicago
Bill Cunningham, D-Chicago
William Haine, D-Alton
Don Harmon, D-Oak Park
Napoleon Harris, D-Harvey
Michael Hastings, D-Frankfort
Linda Holmes, D-Aurora
Mattie Hunter, D-Chicago
Toi Hutchinson, D-Chicago Heights
Emil Jones, III, D-Chicago
David Koehler, D-Peoria
Steven Landek, D-Burbank
Kimberly Lightford, D-Westchester
Terry Link, D-Gurnee
Andy Manar, D-Bunker Hill
Iris Martinez, D-Chicago
Pat McGuire, D-Crest Hill
John Mulroe, D-Chicago
Antonio Muñoz, D-Chicago
Laura Murphy, D-Elk Grove Village
Kwame Raoul, D-Chicago
Dale Righter, R-Mattoon
Martin Sandoval, D-Cicero
Ira Silverstein, D-Chicago
Steve Stadelman, D-Rockford
Heather Steans, D-Chicago
Donne Trotter, D-Chicago
Patricia Van Pelt, D-Chicago