Not only is Illinois' overall population in deep decline, the number of people in prime working age also is going down in the state, a Chicago-based Conservative think tank said in a recent report.
"Illinois' current and future workforce is declining while that segment of the population is growing in the rest of the country," the Illinois Policy Institute said in an analysis piece issued June 21. "This is because Illinois is losing far more families than it is attracting, which has dire implications for the state’s economy."
Saying it isn't a problem isn't helping, the Illinois Policy Institute said in its report. Claims like those by Better Government Association that the sky isn't falling are harmful not only because they are inaccurate but also because they "stand in the way of reforms Illinois desperately needs to begin attracting and retaining families," the report said.
The report was published weeks after a Federal Reserve Bank of Chicago recommendation that the state pays down its enormous pension debt with a 1 percent statewide tax on residential property. The recommended tax would be in addition to property taxes - among the highest in the nation - that Illinoisans already pay.
High taxes are only one reason why Illinois' population is going down, the Illinois Policy Institute report said, pointing to last year's huge income tax hike.
"The state of Illinois’ economy is one reason the 2017 tax hikes were such a poor policy choice," the Illinois Policy Institute report said.
"By costing the state thousands of jobs and billions of dollars in economic activity, the recent tax hike will exacerbate the state’s outmigration crisis. State lawmakers cannot continue to rely on tax hikes if they want families to bet on Illinois."
The population drop is bad news for Illinois and the state's long-term economic growth, the report said.
"The reason societies invest is in significant part to provide capital for new workers and to provide housing for new families," the report said.
"If the growth rate of new workers and new families slows or even declines – as is the case in Illinois – one should expect the share of (gross domestic product) dedicated to investment to decline. A decline in investment makes capital scarce. And capital is an essential ingredient to improvements in living standards. When productive capital becomes scarce, output per worker (labor productivity) declines, hiring slows and so do wages for new hires. Historically, productivity growth has led to gains in compensation for workers and greater profits for firms."
Reversing those trends and fostering population growth in Illinois will require addressing the state's unfriendly business environment, according to the report.
"Improving Illinois' labor market will require sound fiscal and labor policies that assure businesses and employees that market activity will not continue to be penalized with higher taxes each year," the report said.
"Instead of continuously hiking taxes, state lawmakers need to free Illinoisans from their enormous tax burden. A lower tax burden would stimulate investment and job creation, making the state a more attractive place for families and businesses to plant roots."
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