Illinois Bleeds Population for Fifth Year in a Row
Skyrocketing debt and pension obligations make for a tough labor environment.
Around 45,000 former Illinois residents voted with their feet (and moving trucks) over the past year and set out for greener pastures. For the fifth year in a row now, the state has lost population.
Those numbers are from the U.S. Census Bureau, which show that for each of the past five years, the number of Illinois emigres has been consistently growing in size. Illinois has lost more than 155,000 people total the last five years, the equivalent of an entire small city.
This overall population decrease is not the result of an increase in deaths or a drop in births. While we are seeing a national trend of fewer births and more deaths that has reduced our current population growth to less than one percent, the Illinois residents departing the state are doing so while they are very much alive. Only a handful of other states lost population during this same time frame (July 2017 to July 2018), and none were neighbors of Illinois. New York was the only state that lost more people to interstate migration.
It's not just about the Windy City's various troubles (violent crime in Chicago is actually dropping). The Chicago area has seen a decline in population for three straight years, but so have other cities in the state.
Illinois' various financial problems—and lawmakers' tendency to look for new sources of taxes and revenue rather than cut spending—is pushing residents away. The Chicago Tribune spoke to Mary Miller, who lived in Illinois for 44 years, but finally left the state and moved down to Florida, where she found the tax burdens lighter and in-state college tuition cheaper. It wasn't all about the warmer temperatures.
The Illinois Policy Institute looked over IRS data and determined that a good chunk of outmigration from Illinois is due to the labor market. They classify labor market issues as tax policy, unemployment, and wages. In recent years, there have been thousands more people leaving Illinois due to these issues rather than considerations like weather or culture. Nor can we chalk this loss up to retirees looking for sunny climes—it's working class people between the ages of 25 and 54 who are bidding adieu to the Prairie State. Illinois is losing wealthier, more-educated people as well, because they can make more money elsewhere.
Illinois is infamous for its oppressive tax levels, and lawmakers and city leaders seem to constantly be on the lookout for more ways to earn revenue. They arguably need that money because the entire state is in the midst of an unspooling pension disaster. Illinois lacks the money to pay for the benefits it promised government employees, but its constitution bans scaling back those same benefits. This rule is so strict that the state's top court recently ruled unanimously the state can't even curb union representatives from padding their pensions while on leave from their actual government jobs to do union work.
The state has more than $130 billion in unfunded pension obligations across five different state pension plans, and the hole is growing.
And of course, losing population means that they're going to lose even more revenue, making it harder and harder to catch up. Which is why we're seeing proposals for even more taxes, new fees, and additional ways to separate citizens from their money, which then encourages even more people to leave the state. Democratic lawmakers now want to replace the state's flat income tax with progressive taxes, which would undoubtedly mean a hike on what the state's middle class pays.
The Illinois Policy Institute looked over this intractable problem and made some recommendations, the biggest of which is to cut spending, here.
