Vallas: ‘Illinois is back,’ but only in Pritzker’s active imagination

Gov. J.B. Pritzker told Crain’s Chicago Business, “Illinois is back.” But with a long list of state and local fiscal and economic problems, that is more spin than reality.

At a recent Crain’s Chicago Business interview, Gov. J.B. Pritzker proudly declared Illinois is resurging, drawing in new employers and jobs. He said it is positioning itself for economic growth not seen in years.

He highlighted successes in attracting electric vehicle manufacturers and suppliers to the state and hinted at more to come. He emphasized a significant, positive shift since former Gov. Bruce Rauner’s departure.

While there’s surely been improvement to Illinois’ coffers and bond rating, there’s more to the state’s economic health than simple talking points.

Yes, there’s observable progress marked by reduced political gridlock and Illinois’ increased influence with the federal government. However, that may be connected to the super-majority Democrat-controlled General Assembly aligning with the governor’s decisions, Pritzker’s collaboration with the Biden administration and his prominent role in political fundraising.

It is also linked to the substantial federal aid Illinois has received since the pandemic began midway through Pritzker’s first term. Federal COVID-19 funds and the projected post-pandemic economic resurgence have temporarily stabilized the state’s finances. With fewer political obstacles, the governor can actively court companies, offering incentives and performing duties expected from a state leader to attract business to Illinois.

But Illinois still faces challenges affecting Chicago’s immediate and long-term prospects.

Here’s why you can’t simply say Illinois is “back again.” This is what Illinois is up against:

• Employment growth in Illinois significantly lags the nation. Despite the governor’s efforts to court companies and create jobs, there were 125,000 fewer employed Illinoisans in October 2023 than when Pritzker assumed office, marking a 2% decline.  The state’s employment growth ranks second-worst in the country.

• Illinois is still experiencing a population decline and increasing dependence on government programs. The state witnessed a substantial population loss – over 100,000 people in 2022 – seeing all income and age groups choose to relocate to other states. This trend indicates a growing dependency on government support among those who remain.

• Illinois maintains an unfavorable business environment, ranking third-worst state for business, according to Chief Executive magazine’s recent survey. High taxes and an uninviting tax structure place Illinois behind in fostering a business-friendly climate, with Texas, Florida and Arizona deemed the most conducive for business.

• The state imposes substantial tax burdens, particularly harming middle-class families and retirees. Illinois families pay the most in the nation when it comes to state and local taxes, the second-highest property taxes in the nation; and among the highest sales taxes in the nation.

• The K-12 public school system, largely funded by high property taxes, underperforms compared to other states. Despite significant investment through property taxes, student performance in Illinois remains subpar, with two–thirds reading below grade level, and average SAT scores dropping over 24 points in both reading and math since 2017.

• Chicago, the state’s economic hub, faces a crisis exacerbated by the pandemic’s impact, rising crime rates and high taxes. Commercial property taxes in Chicago are the second highest nationally, hindering businesses. Office occupancy struggles to recover to pre-pandemic levels, signaling prolonged economic distress. Meanwhile, a business tax hike is on the March ballot in Chicago.

Also, violent crime rates in Chicago persist and have not declined. Data reveals an increase in violent crimes such as murder, assault and carjacking since 2019.

• Illinois faces monumental pension obligations, ranking highest in the nation. Illinois ended the 2023 fiscal year with an estimated $211 billion in unfunded state and local pension liabilities. The pension systems’ collective funding ratio of 50.8% was the lowest in the nation.

• Despite emphasizing equity in policies, Illinois ranks last in racial equality. Studies indicate stark disparities between Black and white communities in prosperity indicators, challenging the state’s commitment to fostering equity and driving an exodus of Black workers and their families.

These challenges underscore the multiple crises the state is facing. If “Illinois is back,” being back to pre-COVID or pre-Rauner conditions is not nearly the progress Illinois needs to address the immense challenges the state and its most important city are facing.

State and city leaders must do more to make the state welcoming to all.