Illinois’ state of the state for business
At the end of 2023, Gov. J.B. Pritzker said in a formal interview that Illinois’ economic climate and business-friendliness “is the best it’s been in a long time,” declaring the state is “back” in terms of attracting new jobs and companies.
That sounds nice. But it doesn’t paint the truest picture of the state of our state’s businesses.
While there’s surely been recent improvement to Illinois’ coffers and bond ratings, there’s more to the state’s economic health than simple talking points.
The reality is that Pritzker and state government could bring back businesses by emphasizing the right policy changes, not wooing and giving tax breaks to one-off companies.
As we enter 2024, Illinois, Chicago and the suburbs need to strengthen the environment for businesses. This is what we’re dealing with and facing.
Acknowledge population stagnation
No matter which source you use, the data confirms Illinois is losing population. In 2023, the U.S. Census Bureau reported an estimated population loss of 32,826 residents, driven by a net 84,000 Illinoisans moving out of state. IRS data shows consistent net losses across income and age groups.
Even recently, Pritzker touted the Census Bureau revising Illinois’ 2020 official Census population to count an additional 46,400 residents. That doesn’t change the fact the population has declined by nearly 264,000 residents since then.
Ignoring the reality of Illinois’ out-migration struggles is no way to stop it.
Pritzker should address the root causes of people leaving, which is lack of good job opportunities and affordable housing.
Stabilize bad fiscal footing
In 2023, Illinois had the highest combined state and local taxes in the nation. The state’s own estimates find government pension debt sits at $142 billion, with each retirement fund less than 46% funded.
This taxing environment, coupled with unfavorable rankings for business friendliness and retirement costs, paints a grim picture of stability for both existing and potential businesses. How can a business plant roots in Illinois if its fixed costs, such as taxes, could rise to fill government shortfalls at any point?
The first step to promising fiscal stability is for state leaders to address the pension crisis through constitutional pension reform. So far, Pritzker has been opposed to this, but it is the single-best way to turn around the state’s financial picture.
Curb crime rates
The state’s violent crime rates are not only above the national average but also are on an upward trajectory, particularly in Chicago. No one wants to see their business robbed or their employees fall victim to violence. State leaders have taken little action. Worse, Pritzker has asserted the opposite: making false claims violent crime is trending down.
State and local leaders could help tackle rising crime by fully staffing police departments — filling vacant positions and ending staff cuts in the Chicago Police Department, for example. Cities with home-rule authorities — which includes Arlington Heights, Elk Grove, Palatine, Buffalo Grove, Northbrook, and more than 200 others — could also pass their city public safety act to curb crime. Such an ordinance could provide for jail time, fines or probation for individuals who threaten police, intimidate witnesses, engage in hate crimes, commit weapons violations, are in possession of a stolen vehicle, etc.
Illinois’ situation is far from the optimistic picture painted by state leadership. The business community faces an uncertain path forward in this complex landscape. But with the right policies, state leaders can make improvements to truly bring Illinois “back.”
• Matt Paprocki is president and CEO of the Illinois Policy Institute.