MOVING COMPANIES REPORT ILLINOIS EXODUS HITS 10TH YEAR
More people again in 2020 became former Illinoisans than new Illinoisans. The new General Assembly has the power to stop the moving vans.
Tim Carroll gave up on Illinois last year, and he was not alone.
Illinois is one of the top states people are leaving, according to annual studies released by United Van Lines and Atlas Van Lines, two of the largest moving companies in the country. Their studies corroborate recent Census data which highlights the alarming rate people are fleeing the state.
Both moving companies reported over 60% of the interstate moves they handled for Illinoisans were outbound. Both companies saw slight drops in service because of COVID-19. However, Atlas still saw over 2,500 outbound moves, and United found Illinois to be one of the top three outbound states for a ninth consecutive year.
Carroll grew up in Illinois, but in July property taxes drove him to sell his house in Tinley Park and move to Indiana.
“I didn’t have any kids when I bought the home, but there were good schools, and a good community, so I supported paying more in taxes at first,” he said. “After several years in the home, the taxes continued to increase, anywhere from $500 to $1,500 annually. I was getting extremely frustrated.”
United Van Lines research found the majority of respondents leaving Illinois – roughly 34% – cited job opportunities as the reason for their move. The next largest motivators were retirement at 28% and family at 23%.
High taxes were the No. 1 reason nearly half of Illinoisans thought about leaving when the Paul Simon Public Policy Institute asked the question in 2016. Carroll said taxes motivated him.
“I was paying about $11,000 for property taxes in Illinois. In Indiana, I pay about a third of that for a larger house on a larger lot with the same commute to work,” he said.
Atlas Van Lines’ annual data shows Illinois has seen net outbound moves since 2011.
Even accounting for COVID-19 deaths, U.S. Census data showed 2020 outmigration was the largest the state has seen since World War II.
And not just anyone is leaving. Those making $100,000 or more were 70% of the respondents in the United Van Lines’ survey. That means Illinois loses two high-income earners for each one it attracts, along with their taxes, consumer spending and labor.
Also, too few people are coming to Illinois. U-Haul’s study of nationwide moves found Illinois in second-to-last place for in-bound moves.
State fiscal strain from the ongoing pension crisis, COVID-19 associated closures and a shrinking tax base mean more of the tax burden shifts to Illinoisans who chose to stay or cannot afford to leave. Not only does population loss cost remaining taxpayers more, but the state’s budget deficit grows.
“My personal fear was if I stayed too long in the state of Illinois, I wouldn’t be able to leave. I wouldn’t get the home value that I paid years earlier because the taxes were too high, and I’d be stuck essentially holding the bag for state government spending.,” Carroll said.
“If you run your business to the point where you don’t have any money and you’re borrowing and borrowing, eventually somebody’s going have to be accountable.,” he said. “I couldn’t understand that, especially with the state. They would go over budget and fail to balance the budget year after year. How can you do that? There’s no accountability.”
Illinois has outstanding debt of $224 billion dollars. It lost $32 billion in income to other states from 2011 to 2018, according to a study by the Illinois Policy Institute. Had those people stayed in Illinois, the budget deficit would be about 15% smaller, holding budget choices constant.
Pensions alone will eat almost $11 billion, which will be more than 25% of the budget in fiscal year 2022. However, continuing to fork over money to politicians in Springfield does nothing to quell the real causes behind fiscal mismanagement in Illinois.
First, the 102nd Illinois General Assembly must rein in unnecessary spending with a constitutional amendment that protects already-earned pension benefits while allowing changes to unearned, future benefits. This would prevent growing pension obligations from driving further tax increases. Constitutional pension reform also has the potential to put overburdened Illinois taxpayers on a path to declining debt, lower taxes and a more sustainable recovery.
Second, lawmakers should consider a spending cap forcing them to be held accountable to meet Illinois’ constitutional balanced budget requirement, which they have failed to do for 20 years.
The new General Assembly began with a historic move to break with former Illinois House Speaker Mike Madigan. Reforms that control spending will control taxes and give native Illinoisans like Carroll fewer reasons to give up on their home state.