Governor Bruce Rauner has called a November 18 budget meeting with legislative leaders to try and forge a compromise to end a budget gridlock about to enter its fifth month.
Leaders need to work toward passing a balanced budget and pro-jobs reforms to turn around the state’s fiscal mess and unfriendly business climate. New data on Illinois’ economy provides further evidence of how important it is to pass pro-jobs, pro-growth legislation.
The Governor said an agenda for the November 18 meeting will be circulated prior to the meeting.
Struggling economy causing jobs loss, population drain
A new report during the week found that total nonfarm employment in Illinois is currently about 5.91 million – the same as it was in July 1998.
By comparison, our neighbors have fared much better, even with smaller populations. Over the same time period, according to the federal Bureau of Labor Statistics, Wisconsin gained more than 188,000 jobs, Indiana gained 150,000 jobs and Iowa gained 128,000 jobs – all while Illinois remained flat.
In the past few months, Illinois’ economy has shown troubling signs of heading in the wrong direction. In the last month alone, Illinois lost nearly 7,000 jobs, including 1,800 manufacturing jobs. The state has lost manufacturing jobs in eight of nine months so far this year.
According to the latest data from the Internal Revenue Service (IRS), on average, Illinois is losing one person and $50,000 of taxable income every seven minutes.
A struggling economy leads to the loss of residents and businesses and, therefore, loss in tax revenue – and only structural reform of the broken system is going to turn it around and help solve the state’s budget woes.
More workers’ comp reforms needed
While a Crain’s report shows the 2011 workers’ compensation reform package is helping to reduce costs for businesses, more needs to be done to make Illinois competitive again.
The Workers’ Compensation Research Institute recently released a study that shows medical payments for workers’ compensation claims have fallen by nearly 15 percent, to an average of $14,513 per claim, down from $17,140 per claim in 2010-2011. Illinois’ average medical payment per claim, however, is still 19 percent higher than the 17 states that handle 60 percent of the nation’s workers’ compensation cases. The Illinois Policy Institute says that “medical costs have gone down, but other non-hospital costs remain higher than other states included in the study.”
We need to address causation in the workers’ compensation system. Reform proposals include changes that require an injury claim to be directly related to employment, and one that corrects the current definition of work-related travel.
Illinois still has the seventh-highest workers’ compensation costs in the country, and Governor Rauner and Republicans continue to push for a reform package that will bring back manufacturing jobs and restore Illinois’ economy.
Chicago approves record property tax hike
On October 28, the Chicago City Council passed Mayor Rahm Emanuel’s 2016 city budget, which includes a record $588 million property tax hike.
The property tax hike represents the biggest such tax hike in modern Chicago history, adding a further burden to residents already paying the second-highest property taxes of any state in the country, according to the national Tax Foundation.
The budget contained a total package of $755 million in higher taxes, including property tax hikes; a new garbage collection fee; a new tax on online streaming services like Netflix; and fee hikes on taxis and ride-sharing services.
Chicago has raised taxes 12 times over the past three years, according to the Illinois Policy Institute.