As Illinois’ budget impasse continues eight weeks into the 2016 fiscal year, the latest unemployment figures and economic assessment supports the Rauner Administration’s push for a better business climate as part of a budget deal with the legislative majority.
The budget impasse between the administration and Democrat majorities in the Senate and House of Representatives leaves Illinois government running mostly by court-imposed orders and agreements. Only state education spending and federal funding for programs have received legislative approval and were signed into law by Governor Bruce Rauner. The root of the budget impasse is years of fiscal mismanagement that left Illinois with few resources.
Illinois job growth lags nation
The latest report from the Illinois Department of Employment Security (IDES) shows the state ended July with an unemployment rate of 5.8 percent, down from 5.9 percent in June. Illinois also gained about 1,900 nonfarm payroll jobs, but job growth continues to trail behind other states. IDES Director Jeff Mays said if Illinois employment growth had matched the rest of the nation this year, “Illinois would have added 40,000 more jobs by now.”
That trend was confirmed by a corresponding report from the U.S. Department of Labor, which shows Illinois’s rate of job growth in the past year was both slower than surrounding states and last among neighboring states in per-capita job growth. So, while the report shows that Illinois gained 50,000 jobs over the past year, our neighboring state Indiana gained 64,000 – almost 30% more – despite having only half the population.
“F” doesn’t mean “friendly” for small businesses
According to an annual survey released this month, Illinois gets an “F” on its small-businesses report card. The fourth annual Small Business Friendliness Survey by Thumbtack.com, which polls nearly 18,000 small business owners across the country, gave Illinois its worst possible grade, tied with three other states: California, Connecticut, and Rhode Island. Each of our neighboring states made out much better, ranging from a “C+” (Iowa and Kentucky) to a high of “B+” (Indiana).
Another report on Illinois’ economy indicates that thousands of Illinoisans found job opportunities, in other states. The Illinois Policy Institute (IPI), a public policy think tank, cites figures from the Internal Revenue Service. IPI reports, “…in 2012, Illinois lost more taxpayers and taxpayer wealth to a greater number of states than ever before.” The Institute’s analysis indicates that nearly 67,000 taxpayers and their dependents left Illinois taking with them $3.7 billion in annual income. Furthermore, those moving into Illinois have considerably lower average incomes than those leaving. According to IPI, “Those who left Illinois in 2012 had an average adjusted gross income of $73,400, an all-time high, compared to an average adjusted gross income of $59,100 for those who moved into Illinois. So not only did Illinois lose more taxpayers than it gained, but those who left Illinois earned 24% more than those who entered the state. Never before has the difference in average income between people leaving and people moving into Illinois been so wide.”
The reports are among many revealed in recent years and months that bolster the claim that Illinois must do more to improve its business/jobs climate. Numerous reforms to ease state regulations and lower the cost of hiring were proposed by Republican lawmakers in recent years and in 2015. The year began with hope that a new governor, elected on an argument that change was needed, would usher in a revitalized Illinois economy; however, most of the proposed changes ran into partisan opposition.
Regulation reform = economic growth
Governor Rauner signed legislation during the week that supporters said is an example of what can be accomplished when political parties and opposing interests work together for the benefit of the entire state.
Senate Bill 1672 creates a state process for Illinois companies seeking an air permit for a new or expanded facility. Currently, companies must go through the federal government to obtain the permits. It’s a process that can take years to complete, which can lead to delays in construction and hiring or decisions not to build. Under the new state permit process, companies will receive their regulatory decision within one year.
Senate Bill 1672 is the result of an agreement between the Attorney General’s Office, the Illinois Environmental Protection Agency, Sierra Club/Illinois Environmental Council, and the Illinois Chamber of Commerce. Illinois joins 41 other states with a similar process.
Other legislative action
Governor Rauner took action on a number of bills during the week. A complete list is available on the Senate Action page of the Senate Republican Caucus Web site.
Red-light camera scandal
Chicago’s red-light camera scandal that cost Illinoisans millions of dollars recently scored its second major conviction. On August 20, 2015, a former executive for Redflex Traffic System Inc., Karen Finley, plead guilty to helping orchestrate a $2 million plan to bribe one of Chicago’s top transportation officials. The bribe involved a scheme to award the Arizona-based company the city’s red-light camera contracts. John Bills oversaw the awarding of contracts for the installation and operation of the red-light camera system. Bills’ trial is scheduled for Jan. 2016.
According to the Chicago Tribune, Bills was coerced by Martin O’Malley, Finley’s hired accomplice who was convicted last December for his involvement. The latest conviction underscores the ethical and effectiveness issues surrounding Illinois’ controversial red-light camera program raised by many Senate Republicans for years. Improving driver and pedestrian safety was the reason city officials justified the installation of red-light cameras in 2003. However, there is little evidence or research to prove that red-light cameras reduce the number of traffic light-related accidents.
After years of failed efforts to shut down the red-light program in Chicago and surrounding suburbs, bipartisan legislation was introduced this spring prohibiting non-home rule units in the counties of Cook, DuPage, Kane, Lake, Madison, McHenry and St. Clair from enacting or enforcing existing automated red light camera systems. House Bill 173 passed the House, but failed to advance in the Senate.