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Illinois’s mass exodus: New IRS data shows significance of outmigration

By Anna Aguillard | Oct 9, 2015

Outmigration is at a record high in Illinois, according to Illinois Policy Institute's (IPI) analysis of IRS data from 2013.

The analysis showed that every six and a half minutes, one resident and $50,000 in annual, taxable income moved out of Illinois in 2013. In fact, 81,000 total residents and $4.1 billion in taxable income was lost that year. 

The analysis also shows that the state is losing its higher-earning residents, polarizing the economy and leading to a growth in governmental dependence. 

“The big issue is opportunity,” said Michael Lucci, vice president of Policy at the IPI. “Where are you going to find opportunity for yourself, for your family, for your children? We see that Illinois has a very slow job creation rate. We have the worst recovery from the great recession in the entire country. If you’re not finding a job here, you either look somewhere else, or you become dependent on the government. Unfortunately, we’ve seen both of those things.”

IPI's analysis showed that Illinois lost residents to every Midwest and neighboring state, primarily Texas, Indiana, Wisconsin, and Iowa. The IPI says this proves that Illinoisans are headed to states with better economic climates and job opportunities, not climate.

Lucci said those hit hardest by the mass-exodus are the residents who stay in Illinois. Property values decrease as the number of home buyers decreases, and property tax rates increase as fewer tax-paying residents can supply the state’s revenue.

“It’s like a cable company that’s going out of business,” said Lucci. “They’re losing more and more customers, so they keep raising rates on their remaining customers to get the same amount of money. In Illinois, they are raising taxes on the people who are staying, which causes more people to want to leave.”

Despite the report’s findings, state officials remain divided on the issue of economic reform months into a budget stalemate. 

On one hand, Governor Bruce Rauner has advocated for economic reform.

“We have a governor in there who says, very specifically, we need to freeze the property tax, reform the lawsuit climate, and reform the workers' compensation system. These are arguably the three biggest tax and regulatory environments that are hurting opportunity creation in Illinois,” said Lucci.

However, Rauner has faced opposition from the Speaker of the House and Senate President, who have resisted the Governor's proposals as being hurtful to their base.

“At least we have someone in there saying we need real fixes,” said Lucci. “People are hitting a wall.”

The Illinois Policy Institute’s report is available online here:

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