ILLINOIS -- In our Facebook Story of the Day for December 27, we're talking about how Illinois' reputation for political corruption and government mismanagement could have cost the state billions of dollars and an income tax increase.
Andrew Thomason with Illinois Statehouse News reports that Illinois netted a loss of 366,616 tax-paying households between 1995 and 2009, according to a study of Internal Revenue Service figures from 1995 through 2009 released Tuesday by the Illinois Policy Institute, a free-market think tank with offices in Springfield and Chicago.
Those households took with them $26 billion in taxable revenue, according to the study. In 2009 alone, Illinois lost 20,725 households and their $1.5 billion in taxable income.
Ted Dabrowksi, vice president of policy for the institute, said the recent tax hike might have been avoided, if those taxpayers had remained in Illinois.
"If we had more people here generating income, generating sales tax, hiring people, paying income taxes, we'd have a much better fiscal outlook," he said.
Illinois lost taxpayers to 42 states during the 14-year period of the study, including to the border states of Missouri, Iowa, Wisconsin, Indiana and Kentucky.
The higher the net loss of taxpayers for Illinois translates into a heavier financial burden for those who remain.
"This is not a study to say what exactly led to people leaving, but we do note that taxes matter to people, a good, friendly environment to business matters, bad deficits and a bad governance matters to people, and people vote with their feet," Dabrowski said.
Moline is one of the two Illinois cities that make up the Illinois-Iowa Quad Cities community. Moline is in Rock Island County, which lost 1,013 taxpayers to Iowa for fiscal 2009, according to the IRS.
"It's understandable. We haven't been able to get our act together in the state of Illinois … for a number of years," Moline Mayor Don Welvaert said.
Illinois has watched two of its past three governors go to jail on charges stemming from corruption. During the past decade, the state has made a habit of either skipping payments or borrowing to make payments to its five pension funds and spending more than it was taking in.
Welvaert said people leave the state mainly because of the state's reputation.
In fact, Moline had the lowest cost of living of the four Quad Cities before the state hiked its individual income tax by 67 percent in January, said Welvaert.
"It's perception more than anything. People look at the state of Illinois - our governors, our state Legislature - and they want nothing to do with it," Welvaert said.
Florida, Indiana, Wisconsin, Texas and Arizona had the largest gains of former Illinois taxpayers, according to the study.
In general, people migrate because of big life changes, such as a new job, retirement or family emergency, said Lisa Neidert, a senior research associate at the University of Michigan's Population Studies Center.
(Story courtesy of the Illinois Statehouse News.)
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