New data from the Internal Revenue Service (IRS) shows that Illinois had a net loss of approximately 86,100 people to other states between 2015 and 2016, a record high according to an analysis from the Illinois Policy Institute.
The report, from the institute’s director of content strategy, Austin Berg, examined recently released IRS figures that indicate Illinois had a net loss of nearly 42,000 tax returns, which amounts to more than 86,000 measured via exemptions. In addition to losing residents, the relocations amounted to $4.75 billion in lost revenue for the state.
“It’s not retired snowbirds who are driving the flight from Illinois,” Berg wrote in his report. “Analysis of IRS data for previous years shows how millennials are in fact leading the Illinois exodus. Further, the most recent IRS data show Illinois lost income and people on net to every neighboring state. It’s not just the weather."
Illinois Policy Institute Director of Content Strategy Austin Berg | www.illinoispolicy.org
Illinois lost the most residents to Indiana, at just over 8,200, and Wisconsin, at just over 6,000. Michigan gained approximately 2,500 residents from Illinois, while Missouri absorbed 2,000 and Iowa 1,900. Kentucky had a gain of 1,100 Illinois residents.
Between 2015 and 2016, Illinois lost $721 billion in income to those neighboring states, a continuation of losses in residents, revenue and income over the past several years, according to Berg.
“This consistent, worsening trend is an indictment of the policy status quo in Illinois. A 2016 Paul Simon Public Policy Institute poll found Illinoisans cited taxes as the No. 1 reason for wanting to leave the state,” Berg wrote. “Illinoisans shoulder the heaviest property tax burden in the nation, according to a 2016 study from real-estate services company CoreLogic."
Berg noted that Illinois’ income tax hike had partially dropped in 2015, but that this could easily have been overlooked by taxpayers in the face of increasing property tax rates. He also slammed the General Assembly for failing to put reforms in place to block ever-rising rates.
“Yet for years, Springfield has rejected any substantial reforms to address the cost-drivers behind those property tax bills: the highest number of local governments in the nation, skyrocketing local pension costs and an unfair bargaining regime that stacks the deck against taxpayers in negotiations, to name a few,” Berg wrote. “Proposals for a hard property tax cap have been rebuffed as well.”
Berg highlighted the seriousness of the issues raised by the new IRS data, arguing that the state must act to curb the tide of relocation. While he acknowledged that the solution to the problem is more complicated than simply addressing taxes, he urged officials in the General Assembly to begin working on the issue.
“Of course, taxes aren’t the only reason people are leaving,” Berg wrote. “The state’s laggard economy, evidenced by legions of Illinoisans dropping out of the workforce altogether, is another likely culprit. Illinois’ exodus of people and money is the state’s most pressing policy problem. Until lawmakers get serious about addressing its causes, there’s little reason to think the trend will change.”