Yesterday I remarked on how the ongoing flight from Illinois reduces our ability to pay our bills while our bills don’t decline. I didn’t realize the extent of the problem. In their editorial on Illinois population decline, the editors of the Wall Street Journal note:
The numbers are especially worrisome for the state’s tax base because the average person moving out of the state earns some $20,000 more than the average person moving in. According to IRS data for tax year 2014 (filed in 2015), the average income of the taxpayer leaving Illinois was $76,824 while the average income of the new arrival was $56,689.
That gap is widening and the differential can be traced to policy decisions as the state staggers under pension debt and an entrenched Democratic-public union machine in Springfield. In an effort to cover growing debt, in January 2011 state lawmakers raised the personal income tax rate to 5% from 3% and the corporate income tax to 9.5% from 7.3%.
According to an analysis of Census data by the Illinois Policy Institute, for the 16 years before the tax hike Illinois lost an average of some 66,800 people in net migration. The exodus accelerated to 73,500 from July 2011 to July 2012, 67,300 in 2012-2013, 95,000 in 2013-2014, 105,000 in 2014-2015 and 114,000 this year.
Let that sink in. Illinois’s population isn’t just decreasing. Since the numbers of those fleeing are increasing and the remaining population is lower, the rate of population decline per 100,000 population is accelerating. And the aggregate state income is declining.
Let’s not mince words. Illinois’s problems are the fault of the corrupt Democratic leadership. Mike Madigan has been Speaker of the Illinois House for more than 40 years. During that period he has become a multi-millionaire—a prima facie case on its own for corruption.
The solution to Illinois’s problems notionally supported by Democrats is a tax increase. How that will function when increasing taxes are obviously one of the motivations for people with higher incomes leaving the state is beyond me but that’s their plan. Democrats had the ability to raise taxes without needing a single Republican vote. Why didn’t they? Clearly, because they knew it wouldn’t work and their failure would lead to their being voted out of office. Bruce Rauner’s election as governor, largely on the basis of the temporary income tax increase Democrats hoped would become permanent, is evidence of the correctness of that theory. They haven’t even been able to enact a budget let alone a tax increase.
Now they have neither the courage nor the ability to enact their tax increase into law.
Being thrown out of office is not nearly enough. They’ve been looting the state for decades, largely to their own benefit.
How that will happen is beyond me, too. In Illinois 85% of offices run uncontested.
At the risk of being accused of “anecdotal evidence”…….
After several delays due to the buyers mortgage company incompetence the wires have cleared. We are out of IL, and will pay taxes in FL in 2017, not IL. The buyer is an in state transfer. No net tax increase for IL there, unless their local property tax went up, entirely possible in DuPage County.
Let us just say that between our income and property taxes, fees of myriad sort, sales taxes and just plain and simple spending that the state of IL is relatively materially down fiscally compared to a generic IL incomer. And despite the fact that it is sunny and 75 here on the Gulf Coast – admittedly pleasant – it really didn’t have to be this way. IL chased us out.
Even just a decade ago I wouldn’t have dreamed it.