Think Washington's Bad? Try Illinois
The Land of Lincoln and home state of President Barack Obama has become nothing short of a fiscal and economic disaster. The Illinois labor market continues to weaken and the State government loses money by the truckload every day. If you think the nation's economic and fiscal conditions are bad, and they are, then pull up a chair and consider it could be worse...you could live in Illinois.
Illinois has a population of about 12.8 million, making it the fifth largest state in the Union. It has oustanding debt of more than $153 billion or nearly $12,000 per citizen of the State. Worse is the fact that Illinois is spending some $6 billion more than it is raking into its coffers.
The massive red ink that characterizes the State government has caused Illinois to owe its public schools some $768 million. That equates to about $1,100 per student attending public schools in Illinois.
These are indeed atrocious fiscal numbers, but the woeful economic conditions in the State are equally unimpressive. Consider that about 1 in 6 citizens are on food stamps in Illinois...1 in 6! Add to that, Illinois is currently sporting a whopping 9.5% unemployment rate. That is nearly three times the unemployment rate of North Dakota (3.3%), which is the state with the lowest unemployment rate in the nation and some 2% ahead of the national unemployment rate.
Economic conditions in Illinois are so poor that Texas Governor Rick Perry recently went on a two-day recruiting visit to Chicago, making the pitch for Illinois businesses to relocate operations South several hundred miles to the Lone Star State. As Governor Perry put it, "Get out while there's still time."
With good reason, as Illinois has a 9.5% corporate tax rate -- one of the largest in the nation, while the Texas rate is essentially zero for many businesses that operate within its borders.
The high corporate tax rate along with a notoriously negative business climate has already pulled a number of companies outside of Illinois and there could soon be more.
Earlier this year, Wisconsin lured two companies from Illinois, Fire Safety Sales and Noark Electric, adding to the growing list of companies exiting the state.
It's so bad in Illinois that State Senator Mike Frerichs' own cousin moved his trucking business from Illinois to Indiana. His cousin stated that he saved some $90,000-$100,000 per year by moving out of the state. Mr. Frerichs cited taxes, along with the extremely high Illinois workers compensation costs as contributors to the move across the border to Indiana and to the corresponding savings.
Illinois has the third highest workers compensation costs in the nation. The average worker compensation claim in Illinois is better than $26,000, while the closest Midwestern state was nearly $5,000 less. So, a large company with, for example, 1,000 employees, has potential workers compensation costs of $5,000,000 more if it is located in Illinois versus the next closest Midwestern state.
Corporations aren't the only ones moving. According to an interview conducted earlier this year with an executive at national moving company, United Van Lines, Illinois tied with New Jersey as the states seeing the most outbound movement.
Contributing to the mass exodus from Illinois by its citizens has been the recent increase in the State income tax rate of more than 66% -- from 3% to 5%.
Illinois also has an unparalleled history of corruption in the governorship. Four of the past seven governors have spent time in prison. Former Governor Rod Blagojevich was the most recent. He is serving a 14-year prison sentence in Colorado after being convicted in a "Pay to Play" scheme for the U.S. Senate seat. Adding to the State's storied political corruption history is the most recent escapade of former U.S. Representative Jesse Jackson Jr. who was convicted of wire and mail fraud, after using some $750,000 of campaign money for living expenses and lavish purchases.
A poll conducted last year among Illinoisans found that nearly six in ten believe that Illinois government is more corrupt than any other state. Perhaps worse, only about 50% of Illinois citizens trust the honesty of State elections. That number is on par with the percentage of Iranians who trust the outcomes of elections in Iran, according to a 2008 Gallup poll.
So, fellow Americans outside of Illinois, take comfort in knowing that while we all are suffering through a sluggish economy and an inept federal government, it could be worse. You could live in Illinois, where the taxes are high, the government is hemmoraghing money, and the people are leaving in droves.
Chad Stafko is a writer and political consultant living in the Midwest. He can be reached at firstname.lastname@example.org