Illinois's incompetent, insolvent government
Chicago Tribune Editorial:
Laugh all you want about Texas Gov. Rick Perry's campaign to recruit businesses from Illinois to the Lone Star State. We don't know whether Perry will succeed in prompting a commercial exodus from the Land of Lincoln to the land of droughts, fire ants and deadly fertilizer-plant explosions. Yet Perry's stunt is another serious wake-up call for Illinois politicians and the inhospitable business climate they've created.Note how none of the arguments against Texas are about the economic conditions. Perry has picked a good target to illustrate the failures and the evils of liberalism. Businesses would be wise to get out before their taxes go up again.
Perry can boast to Illinois business leaders of a Texas unemployment rate that has fallen to 6.4 percent. That's an excellent barometer of his state's economic health. By contrast, the unemployment rate in Illinois is at 9.5 percent and, as the latest report from the federal Bureau of Labor Statistics indicates, it has been rising over the past year. In March, this state lost 17,800 jobs from the previous month.
That is no laughing matter.
The economic recovery in Illinois remains terribly weak. Our state has failed to make a strong comeback from the Great Recession that ended four years ago, in June 2009. We are falling further behind not just Texas, but practically every other state — including states such as Indiana that can make stronger arguments for luring Illinois businesses relatively short distances.
Only Nevada has a higher unemployment rate than Illinois. But even that Nevada rate, 9.7 percent, has fallenalmost 2 percentage points in the last year. Nationwide, the jobless rate is 7.6 percent.
The Illinois jobs crisis reflects a widespread lack of confidence in the ability of this state's leaders to manage public finances. The failure to address out-of-control public pension costs is the biggest single factor. But the reasons for business to be skeptical about the future of Illinois go beyond that elephant in the room:
State government is insolvent, unable to pay bills as they come due. It has no viable plan for fixing its biggest financial problems. A 2011 income tax increase, including a 67-percent rise in the rate individuals pay, betrayed that lawmakers would rather raise revenue than slash spending. And some legislators are plotting to make that supposedly temporary tax increase permanent. Disintegrating credit ratings mean that Illinoisans pay high interest rates — a waste of hundreds of millions of dollars every year — to buyers of state bonds.
Any employer who stays in Illinois can reasonably expect to be soaked through excessive future taxes for whatever fixes belatedly arrive. Any employer who considers moving here has to include the potential for more tax hikes in his or her calculation. And no one can be confident that public services will continue in their current form as public-pension obligations at every level of government continue to consume ever-more tax dollars.