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Move over California and New York, a new state is in contention for the ‘most dysfunctional’ in America. Illinois is grappling with a string of issues which have triggered a rise in residents departing the state. The state has struggled to add jobs and its public pension debt has ballooned to nearly $150 billion. Meanwhile, its population has declined, hurting tax income.
Conservative think tanks have now grouped Illinois with other blue states like New York and California, which have also faced an exodus amid issues ranging from immigration to crime. ‘Unemployment rates are very high; wage growth is lagging compared to most other states,’ said Bryce Hill, the director of fiscal and economic research at the Illinois Policy Institute. Hill told the Daily Caller: ‘The Census Bureau has reported that residents are leaving the state en masse to the tune of hundreds of thousands every single year, so much so that the state’s population has actually been declining for the past 10 years.
‘So on any metric, quantitatively on outcomes, Illinois’ economy is lagging.’ Census Bureau data reveals the population fell by around 32,826 people in the year to July 2023. The population of 12,549,689 was also more than a quarter of a million less than in April 2020. Illinois’ pension debt also grew by $2.6 billion last year to reach $142.3 billion in unfunded liabilities, state data shows.
A September 2022 report by Equable said it has the second worst funded state pension in the country after Kentucky. State accountants also project it will have a budget deficit of $891 million in the next fiscal year. Governor J.B. Pritzker has defended his record in office and told a state of the state and budget address in February that his administration has ‘grown Illinois’ economy to over $1 trillion’.
But Hill said the budget deficit coupled with migration out of the state will deepen the problems. ‘So the state is projecting budget shortfalls for the next several years, absent any changes in spending or revenues, which is certainly affected by out migration,’ he added. ‘Migrants take over $10 billion worth of income with them out of state when we lose people due to domestic migration, so it certainly has an impact on not only the state’s pocketbooks but local tax revenues as well.
‘But they’re not the root cause of the state’s budgetary stress, because the state also has another very large issue to contend with, which is unfunded pension liabilities that are eating into state and local government budgets and crowding out funding and taking up large sources of revenue.’ The situation in Illinois follows similar trends in New York and California, which have both lost hundreds of thousands of residents in recent years – with many of those relocating to low tax, red states like Florida and Texas. US Census Bureau data published last October revealed California and New York combined lost nearly 1.4 million residents in 2022.
Florida gained some 249,064 people in the same period, while Texas had 174,261 more newcomers than those leaving. Overall, California recorded a net loss of 341,866 people, compared to 244,137 for New York. Population experts have long studied America’s people flows. Some explanations for interstate migration patterns are widely accepted. Americans mostly relocate for better jobs, affordable housing, cheaper living costs, and to lower their tax bills.
Some move away from high crimes areas, homelessness, and the sight of drug addicts stumbling on the sidewalk – a growing issue in parts of California and Oregon. Social problems have been a headache for officials in such cities as San Francisco and Portland. William Frey, a demographer at The Brookings Institution, a think tank, said Americans mostly hit the road for money.
‘Interstate movers are motivated by employment, housing, and family reasons,’ Frey told DailyMail.com. The top relocation trends of recent years have seen New Yorkers flock to Florida and Californians choose Texas, he noted.
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