The numbers don’t lie: Illinois is slowly shrinking.
Recent data from the U.S. Census Bureau shows that on net, Illinois lost more than 45,000 residents last year and a whopping 157,000 people in the last five years. The biggest driver of population loss is domestic outmigration, as the Land of Lincoln lost more than 115,000 people to other U.S. states last year.
Illinois has long been a population exporter, but the trend has picked up in recent years.
And though those numbers are relatively small in a state of more than 12 million people, increasing population loss is cause for some concern. A healthy Illinois is a growing Illinois, and right now we just aren’t growing.
Now-outgoing Gov. Bruce Rauner told Illinoisans he could fix the outmigration problem by cutting taxes. His 2014 campaign was centered around allowing the then-temporary 5 percent income tax to roll back to 3.75 percent in the hopes that lower taxes would attract new residents to Illinois.
Rauner’s theory was put into practice after his electoral victory in 2014. The income tax rate fell, but not only did Illinois continue to lose residents, the outmigration pace increased. According to U.S. Census data, in the four years before Rauner took office, Illinois lost just shy of 300,000 residents to domestic outmigration. During his four years in office, that number increased to 450,000 people.
After a two-year budget impasse and a soaring bill backlog, the income tax rate was restored to just shy of where it was before Rauner, but the state is just starting to recover from Rauner-nomics.
The tax-cuts-for-population-growth theory was tested in Illinois, and it failed spectacularly.
So what can Illinois do to stem the loss of residents and begin to turn the tide on population decline?
Here’s a thought: Let’s try to learn something from the Midwestern state with the largest population growth and the strongest domestic migration — Minnesota.
Despite being the seventh most populous state in the Midwest, Minnesota has led the region in total population growth every single year since 2011. Not only is Minnesota adding population through natural growth (i.e. births minus deaths) and international immigration, but Minnesota added nearly 7,000 residents on net from other states in 2018, more than Indiana (+3,555 residents from other states), Wisconsin (-1,011), or Michigan (-16,766).
In other words, while Illinois loses population and other Midwest states flounder, Minnesota has been growing strongly for years.
How does the North Star State do it?
Having the strongest job growth record in the Midwest certainly doesn’t hurt. In November, Minnesota announced its unemployment rate dropped to 2.8 percent, the lowest since May 1999 and the fifth lowest in the nation.
And its state budget? $1.5 billion — in the black. Last month, Minnesota officials announced yet another massive budget surplus, leaving state lawmakers the job of deciding just how to spend all that extra cash.
Sounds like a nice problem to have.
So how does Minnesota grow its population, its job rolls, and maintain massive budget surpluses? By doing the exact opposite of Bruce Rauner.
When Gov. Mark Dayton took office in 2011, Minnesota had a 7 percent unemployment rate and a $6.2 billion deficit. In 2013, Dayton signed a bill to increase the income tax rate on the very wealthy by an additional 2 percent and raised corporate taxes. The next year, Minnesota increased its minimum wage and indexed the minimum wage to inflation, leading to additional increases every year.
The result is a prosperous, growing state that keeps its residents and attracts new ones from both overseas and other states.
Now that Bruce Rauner is exiting Springfield, our incoming governor has an opportunity to learn from Minnesota’s Gov. Dayton while forging a new path for Illinois. Let’s start by making the wealthiest pay their fair share and giving working people a raise.
That’s the way to make Illinois a healthy, growing state.