I’ve seen this play out for years in our area. In just a three years period, I know of four business owners that simply left the state. We needed a factory with approximately 200 workers earning $40,000/year to replace the lost income tax. We’ve not had a new factory with 200 jobs move in here in 4 decades.
I believe I was ridiculed on this board when I talked about this previously. And many who were aware of the problem responded with “Good riddance”.
Retiring boomers or not, they are still taking their tax dollars somewhere else.
- Children First - Wednesday, Aug 26, 15 @ 2:25 pm:
I moved out of Illinois. It was too stressful to have my job threatened on a regular basis and, at times living in limbo due to the state budget but strangely, I still love Illinois, home is home. Please fix this budget #$@%!
Wait a minute. you’re telling me that people making $73,000 a year would move out of Illinois to avoid paying an additional $1,460 in income taxes?
According to the American Moving & Storage Association, the average move between states costs $5,630. So right there, it’s going to take them about three years to break even.
And I bet the 18,000 people who moved to Wisconsin to avoid the tax increase felt pretty darned stupid when they found out that the marginal rate for people in their bracket was 6.27 percent — which means they’ll be forking over more than $600 more in state taxes than they were paying back in the Land of Lincoln.
Based on these numbers, and assuming population remained stagnant for the years following, it means Illinois has lost $hundreds of millions of tax revenue every year since from out-migration. And the higher earners are leaving and being replaced in lesser numbers by lower earners? Not good.
This is where a progressive tax plan shows kinks in its armor. Assuming this trend continues, the legislature would have to continually raise tax rates on the same income brackets leaving the state. Eventually, when the numbers of that bracket are too small to have any significant budget impact, we’ll see the inevitable “trickle down” of high progressive rates to the lower/middle class, the same classes the progressive plan purports to protect.
1) If you hike income taxes and something about the economy deteriorates, blame the tax hikes.
2) If you cut income taxes and something about the economy improves, credit the tax cut.
3) If you hike income taxes and the economy improves, get all sophisticated and point out how “it wasn’t really the tax increase,” something else was going on at the same time that softened the economic blow - basically find anything (under Bill Clinton, for a time, it was Al Greenspan’s brilliant Fed Reserve leadership).
4) If you cut taxes and the economy worsens, then claim the economy -will- turn around, you just need to give it more time and the seeds have been planted (see, today: Kansas).
Rinse, wash, repeat. Basically a tax increase on the wealthy can never be good, and a tax cut for them can never be bad. They have the “facts” to prove it, always.
I get the need to (at times) “overpay” for talent.
But the way universities are run remind me of NBA GMs: negotiate against yourself and then pay the consequences for years to come. Is a $300,000 guaranteed salary for 3-4 years not enough?! Apparently, we also need to throw in housing allowances, a massive buyout clause and then ensure a soft landing spot if you screw up. Why? Why did Glenn Poshard need a housing allowance? Why did Phyllis Wise need a guarantee to return to her old post? Why did Tim Flanagan - who was on the job for only a matter of months - need a massive buyout clause and receive nearly a half million bucks after resigning for being a knucklehead and eventually pleading guilty to disorderly conduct? I really, truly hope the Senate Dems actually go somewhere with their comprehensive report on public university waste, fraud and overall malfeasance.
- PublicServant - Wednesday, Aug 26, 15 @ 2:35 pm:
Typical IPI Propaganda. They take data, then imply causation, which, in this case, as in most others are due to taxes. Pure BS. Consider the source.
Good points above about cause and effect, but it doesn’t change the fact that IL is a net loser here. Less taxpayers to pay the rising costs of the same services. That is not an equation anyone wants to be part of.
Reason #652 why the state should’ve paid their pension obligations every year to ensure that those who consumed the services were around to pay the bill.
I get the focus on those leaving. But a lot of people also came to Illinois. Maybe the IPI can ask those people why they came to Illinois since the talking point seems to be that everyone is leaving.
- Almost the Weekend - Wednesday, Aug 26, 15 @ 2:44 pm:
The bias on this blog is startling. If you don’t believe this a problem, then there’s no point in arguing.
Several commenters argue it’s retirees, but use no proof to justify this claim, and others think it is propaganda. I have no ideas how to solve this situation, Illinois relied primarily on manufacturing and besides Chicago, the rest of the state is having problems adapting and attracting other businesses.
Rich you should have changed the article and switched Illinois to Indiana and see what the comments would have been. I’m sure the people stating this isn’t a problem would have a much different opinion.
I don’t think that’s the issue. Numbers are numbers. What is the issue is the “why.” The IPI and other Illinois haters take this kind of data and then draw the conclusion that it’s obviously because of taxes in Illinois, Workers Comp and whatever else they can think of. Simply telling me people are leaving doesn’t say a whole lot. Why are they leaving? And why are people coming to Illinois (cause there were a lot of those too).
It’s a real problem. It has been. People aren’t just saying they’re leaving. They are leaving. The economy of a state has everything to do with people staying. More jobs attract more people. Better jobs attract higher qualified people. We need to be more attractive to hirers. That will turn the tide and bring back more hirees.
Anecdotally, as an Illinois ex-pat, I moved, at least in part, because taxes were too low and were set to fall lower (I moved last year). Illinois needs to get its fiscal house in order. I can’t imagine still being in Chicago with everything going to heck because Rahm and Bruce just refuse to see reality and understand that the only way out of this fiscal mess is to what most of the predecessors have been avoiding 20 plus years - raising taxes to an adequate level to fund the operations of government.
Eventually, the day of reckoning will arrive, and the more the can gets kicked down the road, the more it will hurt when it arrives.
Until then, there will just be a different kind of pain. Illinois is stagnant and not going anywhere until the political class grows up and realizes that they need to fix the problem.
I’m in Colorado now, and we have a fiscal problem that’s going to become intractable in 5 to 10 years if soemthing isn’t done about it (TABOR - I won’t go into details), but the political class here (republicans, democrats, business folk, other civic leaders, etc) are gearing a campaign to make changes to fix this problem before it blows up. It’s really refreshing to be in a state with a functioning political system.
Why would Illinoisans supposedly fleeing the temporary 5% income tax move to states with much higher top rates such as California and Wisconsin? When Illinoisans are asked why they are moving, state taxes do not appear among the main reasons. In short, the IPI is selectively using data to support their politics. First time for everything!
==The bias on this blog is startling. If you don’t believe this a problem, then there’s no point in arguing.==
Something is “startling” only if it’s surprising or unexpected.
There is no clear solution other than to observe the fact that there are less taxpayers in the state than before and that those taxpayers are now earning less. Those of us who remain are therefore forced to shoulder the increasingly larger tax burden.
Rinse, wash, repeat.
- Original Rambler - Wednesday, Aug 26, 15 @ 3:03 pm:
Nixit 71 posts are spot on. I have come to accept that my taxes are going up to pay for several decades of foolhardy decisions by elected officials of both parties I don’t like it, but there is no other alternative. After all, it wasn’t just the taxes of those who have since left the State that were artificially low; it was mine too.
If I had a steady job (and I do) I wouldn’t consider moving unless I had another steady job lined up. If I didn’t have a steady job, I might move to a place where I’d be more likely to find one. The common denominator? Certainly not the income tax. While I’m a sample size of 1, I can’t help but believe there are many that feel the same way.
For those people who ask why are we moving, the answer goes beyond income taxes. There is a culture of sleaze, red light cameras, tollways, ridiculous downtown tax rates, parking meter excesses, etc… Nickel-and-diming working-class people to death. For those of you still there, tell your pols that business as usual is a losing proposition. I hope Rauner can somehow turn things around.
- is it just me? - Wednesday, Aug 26, 15 @ 3:08 pm:
Does Illinois make you fill out a survey when you move out of the state? Sort of like an “exit interview”.
The CBPP makes an excellent point. When people move, they usually don’t take their incomes with them. If I leave my job, I won’t get to take the salary — they’ll give it to the next poor unsuspecting schmo. So people may be leaving, but their incomes are staying here. Good news for us, I say.
- Ron Oglesby - Now In Texas - Wednesday, Aug 26, 15 @ 3:51 pm:
Well I was one to leave, but just last year.
Lots of folks here like to say “the numbers dont mean squat” Or its “boomers’ retiring…
I think there is an decent point to digging into the numbers a bit more. But several years of data, lack of population growth, etc all point are bad indicators. Those who dismiss any bad news unless they get the exact data they want (which they never will” or try to say its “boomers’ without any backup data ignore that there are other (even blue states) that have better growth in pop and GDP than illinois.
Its almost like “Something is broke, but I dont like the R’s but until you show me a policy I agree with I wont budge… Illinois is FINE!”
I wanted to Illinois to make it. I gave Illinois 20 years of my adulthood. from 21-41. I gave up. Dysfunctional government. Ran by people who care more about their election and specific programs than even the good of the state.
I left to try to find a better place to do business. I took hundreds of thousands of dollars with me. Some went into a new home some will be going into the next business.
Think about that. My property taxes, sales taxes, employee pay, their share of taxes, my savings, my purchases of goods from local business. All gone.
i know there are a number here that comment and bash ANY numbers that show dysfunction in Illinois. I am sure there are some in places like Cleveland and Detroit that still say they have great prosperous cities. But in reality shouldn’t Illinois be trying to retain folks like me and even trying to bring us in… I got no special “tax break” I am not motorolla. The engine of growth is small entrepreneurs and those that work for them. Illinois is not friendly to either.
“I think there is an decent point to digging into the numbers a bit more. But several years of data, lack of population growth, etc. are bad indicators”
I have to agree. It isn’t ONLY taxes or any other single factor that prompts people to move out, but the fact remains that they ARE moving out.
Add to that the results of the 2013 Gallup Poll which showed that Illinois was the state most despised by its own residents (25% of respondents saying it was the worst state to live in — a full 8 points ahead of runner-up Rhode Island) and which more poll respondents wanted to leave (50%) than ANY other state. Granted, that was “just” an opinion poll and a lot of factors could have influenced response. Still, when states with far worse reputations as poverty or crime-ridden hellholes (e.g. Mississippi, New Jersey) and far harsher climates (the Dakotas, Alaska, etc.) are more “loved” by their own residents than the Land of Lincoln is, I’d say that something is definitely not right.
Soccermom, with respect, you usually have a lot of bright comments here, but I’m not grasping the theory that this is good news. It is entirely possible those incomes, and the jobs they are attached to, have disappeared. As many here state, while you can’t use this article to prove or disprove causation, I don’t know how anyone can look at the data and think it is good news in any way. Oglesby is on the money - stop focusing only on income taxes in this state - there are GOBS of taxes that are paid on everything. Anyone who has lived in another state completely understands the way Illinois hammers you coming and going. The problem now is the deficit is too big to nickel and dime, the usual method, and will result in a need to raise the biggies - income, property and sales taxes. If you don’t think those, along with the taxes on pretty much everything, aren’t making people leave, I’m not sure what to tell you. It’s not just the $1,460 increase in your income taxes, its the $1,460 more on top of what you are already paying in multiple taxes that keeps pushing people more and more to the tipping point of leaving.
Many on this board believe we can simply raise taxes on the wealthiest and all our problems will go away. A few will admit, “we need a fundamental change”, but offer no ideas on what change that might be.
I’ve suggested allowing some downstate counties to adopt a right-to-work zone, but have been shot down as that being something that is “non-negotiable!”.
Of course, I’ve posed the question, multiple times as to what is the harm to allowing individual counties to make their own locally-based decision on this, and no one has offered a cognitive answer.
“More taxes” seems to be the tried and true response.
There has been an answer. You just choose to ignore it. There’s a lot of things I would like, but reality lets me know that they won’t happen. There are things that can be accomplished. Right to Work isn’t one of them. Whining about it won’t help. Focus on what can be done, not what you want to be done. Why in the heck do you think we are in this situation now? It’s because you’ve got people who want what they can’t have. Don’t be in that group.
==“More taxes” seems to be the tried and true response.==
I think a better response is increased taxes and cuts. But then again math is hard for some people.
It’s not about bashing numbers. It’s about bashing people who use these numbers to further their political narrative. Telling me that people have left (I’m sorry you don’t like this verbiage) doesn’t tell me squat. I want to know why. I’m sure some of it covers your situation. But I’m also sure some of the reasons don’t.
Also, why are people still coming to Illinois. The data also shows that. If Illinois is such a cesspool then why come? Obviously those people have reasons as well.
I refuse to just say “Well, people are leaving, we need Right to Work.” Cause some goofballs are saying things like that.
Put the “why” & money aspects of the migration aside & realize that this migration has serious implications for redistricting at the end of the decade & the number of EC votes Illinois will have. Less pull during Presidential election years is never a good thing for any state in my opinion.
=== Wordslinger - Wednesday, Aug 26, 15 @ 4:24 pm:
Guy, you’re the poster child of the vacuousness and ignorance that turned suburban Chicago from bedrock GOP into a region in play.===
Sling, and what are you the poster child for? You can make anything match up or rationalize with your superior than thou view of the world, can’t you.
If suburban Chicago is not the bedrock GOP that it once was, it is truly because of the outward immigration of Chicagoans to the suburbs that generally take a full generation to sort out exactly what they were leaving and why they were leaving. It’s still pretty solidly GOP where I am, but the GOP has shifted somewhat. When our Governors go to jail, it paralyzes us (rightly or wrongly). When your’s go to jail, you double down. And you do so snidely.
You’re such a bright guy with such a glaring blind spot. Brilliance tainted with a complete lack of couth a times. You can be better. You should be.
No, everything’s just fine. If we could all just look away, talk things up a bit and by all means continue to bash the Governor, we’ll get through another election cycle just fine … that is what it’s all about. Right?
If you want to see the unedited version, which talks about the pension costs, I’d be glad to post it.
- The Whole Truth - Wednesday, Aug 26, 15 @ 5:19 pm:
Since 2012, the labor force has decreased by 200K and the rate of decrease has been pretty steady since 2008. Since 2012, employment has increased by 150K, for a net decrease of 50K. We are losing ground, not gaining. As noted above, decreasing jobs and workforce numbers mean a heavier onus on those left to foot the state’s bills. That suggests a compounding problem that merely increasing taxes is not going to address. http://data.bls.gov/timeseries/LASST170000000000006?data_tool=XGtable
Guy, bite me. You’re an idiot. That’s your choice, not my fault.
I try, often, to engage you on a higher level, but you’re just not up to it.
You begin with superficial conclusions and then make up back door nonsense to rationalize them.
Did you think no one would notice?
- The Whole Truth - Wednesday, Aug 26, 15 @ 5:53 pm:
There is a need for increased revenue in the short term to get out of the hole we’re in….but any additional taxes need to sunset as spending cuts are made. We are already one of the most heavily taxed States in the country. Increasing taxes even more with no other solution merely keeps us in that compounding cycle that only gets harder and harder to break.
For anyone interested in a shorthand illustration of the changes in the share of the American population among the states, 270towin.com can clue you in very quickly, based on reapportionment maps.
No shocks there. Over the last 60 years, the greatest movement, by far, has been to three states: California, Texas and Florida.
Fifty years ago, Florida had fewer people than Alabama.
Does anyone seriously think marginal state government decisions have anything to do any of it?
We’ve got issues in Illinois. But they ain’t going to be solved by repealing sunshine, air conditioning, jet planes, the interstate highway system, the TVA, or Hoover Dam.
How’s about we get going on that massive FY16 budget deficit?
- The Whole Truth - Wednesday, Aug 26, 15 @ 6:17 pm:
Speaking of that deficit, why not start looking for solutions by examining what other states are doing differently than Illinois. We’re pretty much on the bottom of the fiscal heap despite one of the county’s highest overall tax burdens.
- The Dude Abides - Wednesday, Aug 26, 15 @ 7:05 pm:
@The Whole Truth, yes we do need to make some changes besides raising taxes but raising taxes needs to be part of the equation, don’t you agree? We are running out of time to fix this state so we’d better make sure that these other changes that are made will actually help more than they will hurt. Will right to work improve our economy and will ending collective bargaining and prevailing wage grow the economy? Wisconsin’s economy is ranked #35 in the country. Their economy hasn’t seen anything resembling impressive growth since Scott Walker became Governor and brought about those changes. Again we need to make sure these changes we make will really work and there are a lot of thoughtful people that don’t believe that killing off collective bargaining and instituting right to work will put us on the road to prosperity. I think one thing most everyone agrees on is that it will take a combination of increased revenue and spending cuts.
- The Whole Truth - Wednesday, Aug 26, 15 @ 7:07 pm:
Start with State employees…and not just salaries. While some will say we have fewer state employees per capita, the reality is we farm out much of what other states do themselves at a higher budget cost. Other states may have more employees, but they do more at less overall cost.
Given the recent publicity of some of the issues at the College/University level (College of Dupage, U of I) some trimming and reining in of administrators and bureaucracy seems called for.
How much do we pay for a mile of roadway rehabilitation as compared to other states? How long do our road repairs last as compared to other states?
The number of governmental units in Illinois has been noted to be much higher by any measure than other states. Is that really necessary and at what cost?
How many entitlement programs do we have as compared to other states and what are they really accomplishing? What entitlement programs in other states are the most cost effective?
And yes, right to work, public unions, and state employee/University Employee collective bargaining are worth further review in the context of what is working in other states.
The list goes on …. No one thing will solve our problems, but collectively, we would see an improvement in our condition by emulating the best practices from other States.
Other than raising taxes, what do you suggest?
Hey, I’m a retiree that left 14 year ago. I moved to a state where I would NEVER live while making a living — wages are too low. (Although I did work for a few years for an out-of-state firm.) I left because I HATE THE WEATHER IN ILLINOIS. Lots of us do that. We’re sick of winter, staring at corn fields and ugly prairie. I know, some like it, but a lot do not. Outlaw air conditioning, and they’ll be coming back in droves! ( oh, BTW, my states taxes retirement income.)
- The Whole Truth - Wednesday, Aug 26, 15 @ 7:15 pm:
I have always maintained a combination of cuts and temporary revenue enhancement is necessary, and now rather than later.
While I don’t know where your #35 ranking comes from, I note the links above indicate Wisconsin is doing marginally better than Illinois in terms of jobs, and the other surrounding states are doing much better. Why not try what works for other States? Ruling out measures as a matter of course just limits options. I don’t see why Illinois should limit itself to fewer options than other States, especially when what we’ve been doing hasn’t worked.
Illinois was a net loser of taxpayers and income across every age group and every income bracket for the 2011 and 2012 tax years, according to recently released Internal Revenue Service data.
- The Dude Abides - Wednesday, Aug 26, 15 @ 8:58 pm:
When comparing Illinois and Wisconsin and to get an idea if Scott Walker’s policies helped their economy, look at where both Illinois and Wisconsin were at the time Walker became Governor. At the time Walker became Governor their economy was better than Illinois. After being Governor since 2011 has Wisconsin widened the gap between them and Illinois? Actually no, the gap has narrowed somewhat. How can that be if right to work and ending collective bargaining are economy boosters?
- The Whole Truth - Wednesday, Aug 26, 15 @ 9:18 pm:
If those two items were the only factors at play in Wisconsin, your premise would have more validity. Regardless, most remedies take time to be effective…don’t expect immediate results, good or bad.
What is your take on Iowa, Indiana, and Missouri? What have they done differently that they have out performed Illinois on the job front? They certainly don’t have a higher overall tax burden.
TWT, when I asked you for suggestions, I didn’t mean a lot of questions.
Want to get real, cousin?
A governor AWOL on the budget, and automatic pilot for $38 billion in spending with $32 billion in revenue. That doesn’t include billions in social services, MAP and group insurance.
Once we figure that out, I’ll pick up Zumas and we can play Dungeons and Dragoms in the dorm and debate your questions.
- The Whole Truth - Wednesday, Aug 26, 15 @ 10:24 pm:
The questions are suggestions of where to start looking, and moreover part of what I think needs to be discussed to arrive at workable solutions. Hard choices, but like it or not, they have to be made. I think most can figure that out…surprised you didn’t.
And I drank all the Zumas. The Zumas were cold.
They were good (Hemingway).
- The Whole Truth - Wednesday, Aug 26, 15 @ 10:44 pm:
Good to hear. I asked you before above, but I’ll ask again….what do you propose besides raising taxes?
On a separate note, I’ve noticed over the years that once one resorts to name calling and insults, it’s usually indicative one has lost the point if not the debate.
TWT, I hope you find the answers to your deep questions.
But from the looks of them, and since I wasn’t born yesterday, I suspect you’re not going to find $6 billion of best practices.
Kid, get real. Rauner yammered like you during the campaign about “waste, fraud and corruption,” yet when he presented his budget he came up with $200′million in “operational efficiencies.”
- The Whole Truth - Wednesday, Aug 26, 15 @ 11:09 pm:
I’ll keep thinking deep thoughts on deep questions.
You’re evading the question though…what do you propose besides raising taxes? You asked what my thoughts were and I responded….surely courtesy would dictate similar consideration on your part?
- The Whole Truth - Wednesday, Aug 26, 15 @ 11:16 pm:
On the other hand, if you are of the mind that virtually every other State can do a better job of managing their financial health with lower taxes, lower deficits, better bond ratings, et al than Illinois, I suppose raising taxes even higher is the only answer for us.