K-12 Tax & Spending Climate: Illinois’ growing burden

Andrew Ferguson:

Among the 50 states, Illinois’s income tax rate is only middling, ranking from 25th to 36th depending on who’s doing the counting, but overall its total average tax burden, according to the economic research firm WalletHub, is the worst in the country. A home-owning family in Illinois earning the U.S. median income of $55,000 can expect to pay 14.89 percent of that to the state. For comparison’s sake, they would pay 11.86 percent if they moved next door to Indiana and just 5.67 percent for number one Alaska. Only New Jersey—New Jersey!—has higher property taxes. In many Illinois municipalities it’s not unusual for owners of a house assessed in the $150,000-$200,000 range to be paying more in property taxes than in principal and interest on their mortgage.

After he laid out all these unhappy facts with tables and charts at his office at Bradley University’s Foster College of Business in Peoria, I asked Joshua Lewer, chairman of the economics department, how his fellow Illinoisans were reacting to the mess. (Lewer, by the way, has seen his property tax rise by 60 percent over the last decade while the value of his home stayed flat.) “A lot of them just leave,” he shrugged, with that familiar Illinois air of resignation. Out-migration has been a problem in the deindustrialized states of the Midwest for two generations, but Illinois has managed to outdo its rivals. From 2015 to 2016, the U.S. Census Bureau tells us, 114,000 residents left Illinois, an out-migration rate of 9 per 1,000 citizens. The next highest neighboring state was Michigan, with a rate lower than 3 for every 1,000. Jobs are returning with the Trump boom—indeed, nearly every business owner you talk to is hoping to hire—but at a slower pace than elsewhere. Wage growth is second to last in the country since the 2008 recession.