Bleeding Illinois

by Dave Schuler on May 18, 2014

Illinois remains, arguably, in a recession. The growth in the gross state product remains slow, its employment rate continues to slide, and its unemployment rate remains among the highest in the country. Only Nevada and Rhode Island are worse off and Illinois is enormously more populous and more productive than either of those states. Jeff Carter muses over why unemployment is so high in Illinois:

Illinois has the worst business climate of almost all 50 states.  Sometimes Illinois even goes out of its way to shoot itself in the foot.  This is what they did last year.

Illinois came a giant step closer to approving the nation’s strictest regulations for high-volume oil and gas drilling on Friday, as lawmakers approved a measure they hoped would create thousands of jobs in economically depressed areas of southern Illinois.

The Senate passed the legislation 52-3, one day after it was overwhelmingly approved in the other chamber. Gov. Pat Quinn promised to sign it, calling the legislation a “shot in the arm for many communities.”


It’s not like Illinois has a thriving energy ecosystem. What they did last year was make sure no one even thought about fracking.  The politicians had all but killed the coal industry already.  

Mr. Carter barely scratches the surfaces of Illinois’s problems. Illinois’s minimum wage is higher than the federal minimum wage and it’s higher than the minimum wage of any adjoining state. The housing bubble was much less frothy here than in other states with high unemployment—we’ve got a bust without a preceding boom. It has the lowest state contribution to public education, the worst public pension problem, and the worst credit rating of any state in the Union.

Illinois is less populist than any of the adjoining states, particularly the highly populist Missouri. We have no provision for binding referenda and the initiative afforded to Illinois’s citizens is all but impotent. State officials cannot be recalled. In a classic case of shutting the barn door after the horses had already bolted the state constitution was recently amended to allow the governor to be recalled.

Illinois certainly has no provision like Missouri’s which requires that any raising of state revenue be approved by a majority of Missouri voters.

Only Louisiana has more civil corruption than Illinois—four of Illinois’s last nine governors have been imprisoned for corruption in office.

The power of incumbents in Illinois is prodigious. It’s quite difficult for third party candidates to get on the ballot.

On many grounds Illinois has the worst Congressional delegation of any state. They simply don’t “bring home the bacon”. I think it’s because so many of them are regular Democrats or regular Republicans by which I mean they vote the party line regardless of what the party line might be.

A higher proportion of Illinois’s gross state product goes to Washington than any other major state and Illinois receives a lower proportion of federal taxes back in the form of federal spending than any other major state. It’s far worse off from both of those perspectives than any of its adjoining states. This despite Illinois’s senior senator being Dick Durbin, as Senate Majority Whip arguably the second most powerful individual in the Senate.

I honestly don’t know how to solve Illinois’s problems. To do so in short order would require the equivalent of bankruptcy protection, a state constitutional convention, and a major reordering of Illinois politics.

Barring a cataclysm of that magnitude Illinois’s problems will take years, decades to resolve and I don’t think we have the luxury of that kind of time.

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Guarneri May 19, 2014 at 8:08 pm

At a recent gathering this topic arose. You had some who won’t move because of family issues. Some who just don’t want to leave the Chicago area. But a shocking proportion said they “were just marking time” until junior was out of high school or an area college.

This of course is in DuPage Cty. But I can’t imagine similar conversations and considerations aren’t going on in Cook Cty (the city proper and places like Dave’s stomping grounds), and Lake Cty.
And that’s where the tax reservoir is. Our new property tax bill just came out and it went from $21K to $25K. That’s just not a sustainable government financial model.

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