Illinoisans see 2nd-worst income growth in the nation since recession

While Illinoisans’ incomes have flatlined since the recession, state tax revenue has grown by more than that in almost every state in the nation.

Total personal income in Illinois has grown at a snail’s pace since the start of the Great Recession, according to research released Feb. 3 by The Pew Charitable Trusts. With personal incomes in the Land of Lincoln growing by a mere 0.5 percent since the end of 2007, only Nevada residents have seen personal incomes grow less over the same time period.

But as Illinoisans’ incomes stagnate, Illinois state government has seen its pockets bulge.

Pew research also shows Illinois state government has grown tax revenues at a rate higher than all but three states when compared with revenues at each state’s pre-recession peak. State tax collections in Illinois have shot up by over 18 percent since before the Great Recession, after adjusting for inflation.

This imbalance underscores the moral bankruptcy of another massive state income-tax hike without serious reform, and highlights the budgetary implications of people leaving Illinois for other states at a record-setting pace.

Losing border wars means budgets become harder to balance. If Illinois had simply broken even on domestic migration between 1995 and 2014, there likely wouldn’t be much of a budget problem in a state making national headlines for lacking one.

In other words, Illinois’ biggest budget problem is taxpayers fleeing the state.

What’s driving the exodus? Data from the U.S. Census Bureau point to jobs and housing.

Among Americans who made moves of 500 miles or more from 2014 to 2015, nearly half cited employment-related reasons as the primary motivation for moving, according to census survey data. Another 21 percent of long-distance movers said housing-related reasons spurred them to pack up and ship out.

In terms of both jobs and housing, Illinois is one of the worst places in the nation to put down roots. The Land of Lincoln finds itself in a 17-year jobs depression while residents shoulder the nation’s second-highest property-tax bills – often more expensive than a homeowner’s mortgage.

The census data combined with sluggish income growth demonstrate Illinois lawmakers must pursue bold, pro-growth solutions to right their state’s economic ship.

Saddling a diminishing tax base with more tax hikes, without long-term reform, is a recipe for disaster.