TBL: The Death of Illinois
Friday, February 10, 2012 8:57 AM

 It seems like the state of Illinois can't catch a break these days. Even hard times have fallen on former governors, such as Blago going to prison. The latest of the bad news to befall the land of Lincoln is that the company Caterpillar Inc., who builds big boy toys, will not be building a plant in Illinois, but  be focusing on a location closer to their headquarters in North Carolina.

Why would that be? Could it be that the state of Illinois is so anti-business that they are afraid of making a commitment there?

At its core, Caterpillar's decision reflects some concerns its officials had previously expressed about the economic condition of the Land of Lincoln.

"Please understand that even if your community had the right logistics for this project, Caterpillar's previously documented concerns about the business climate and overall fiscal health of the state of Illinois still would have made it unpractical for us to select your community for this project," the letter reads in part. "Caterpillar intends to continue calling for long-term changes in Illinois and to offer help to the state as it works toward real and fundamental reforms that will position communities like yours to compete for future projects."


What do they mean about "the economic condition of the Land of Lincoln"? Could it be that they have an unpaid bill of over $4.25 billion dollars? Actually, Illinois State Comptroller Judy Baar Topinka says that the figure is closer to $8.5 billion. Where does this money come from? Tax refunds, employee health insurance, and other such bills have created the outstanding backlog. This is all despite a sharp tax increase around a year ago.

Topinka says this is extremely disappointing, since a year ago, the state sharply increased income taxes (by 67 percent) and corporate taxes.

“After the largest tax hike in our history, the state continues to be in this precarious fiscal position with persistent payment delays, and frankly, the situation is unlikely to significantly improve in the near term,” she said.

 Maybe it's the mindset of the people who live and work there. Maybe it's the state government believing that paying government employees more than they deserve, instead of focusing on the private sector employees is the way to go. I mean, look at  how much they pay their teachers:

  • A Phys. Ed teacher $203,154 for a 9 month work year.
  •  14,866 teachers made more than $100,000 in 2011.
  • 21 who made more over $1,000/day ($170,000/yr.)
  • A Drivers Ed teacher who salary is $18,222/month to teach teenagers how to parallel park.
  • 13 teachers make more than the Governor’s $177,500.
  • Top 100 Teachers average $18,169 per month salary ($163,579/yr).

What type of impact is this having on the people though? According to the Illinois Policy Institute, people are leaving the state in droves, and they are taking their hard earned money with them.

Recent data from the Internal Revenue Service shows that, in 2009, Illinois netted a loss of people to 43 states, including each of its neighbors – Wisconsin, Indiana, Missouri, Kentucky and Iowa. Over the course of the entire year, the state saw a net of 40,000 people leave Illinois for another state.

The data reflects a continuation of a trend of out-migration from Illinois that has lasted more than a decade. Between 1995 and 2009, the state lost on a net basis more than 806,000 people to out-migration. 

When people leave, they take their income and their talent with them. In 2009 alone, Illinois lost residents who took with them a net of $1.5 billion in taxable income. From 1995 to 2009, Illinois lost out on a net of $26 billion in taxable income to out-migration. 

The Bottom Line is this: This is the way our federal government is being run. Sure, people aren't leaving the United States in droves, but businesses are. Illinois style politics are being played in the White House, and look at the good it's doing the state from whence they came.


Twitter: @afrbottomline