Study supports claim that high tax rates are driving people out of Illinois
An analysis published recently by the Illinois Policy Institute shows the state's high tax rates are helping drive residents from the area.
In “Border War: In Quad Cities, Illinois Shrinks as Iowa Grows,” the IPI’s study from Feb. 23, the author notes the cities of Rock Island, Moline and East Moline “are struggling to keep up with the Iowa side” and its cities of Davenport and Bettendorf, all clustered around the Mississippi River.
Between 2010 and 2016, Rock Island, Henry and Mercer counties saw population declines of 1.9 percent, 2.4 percent and 4.3 percent, respectively, according to a chart in the story.
In contrast, Scott County in neighboring Iowa saw a 4.4 percent jump over the same period. Austin Berg, the study’s author, wrote that the increase of 7,250 was largely (5,000) caused by “birth minus deaths,” or natural increases. Only 1,200 or so of the influx was due to migration.
Still, an increase of 1,200 residents is noteworthy, compared to the decline due to the migration of several thousand people from Rock Island County alone, and less than 2,000 from Henry and Mercer counties.
As the IPI study points out, a big factor in the out-migration from Illinois to Iowa is related to property taxes. Rock Island County and Mercer County have an effective property tax rate of 2.23 percent each, and Henry County reports a rate of 2.11 percent.
On the other hand, Scott County, Iowa, has a 1.61 percent rate. All figures are from a five-year estimate from the U.S. Census Bureau’s American Community Survey.
“While the median home value in Scott County is 31 percent higher than the median home value in Rock Island County, the median property tax bill is 6 percent lower,” IPI's Berg writes of the disparity. “Measured as a share of residents’ income, Rock Island County’s property tax burden is 39 percent higher than Scott County’s.”
Glen Evans, the Republican candidate for the 72nd District House seat, puts the blame squarely on Springfield's shoulders.
"Illinois is a great state," he said in a recent Facebook post. "The problem is the broken system in Springfield. We can REFORM Illinois, We can SAVE Illinois."
Those who are staying in the state are already showing signs that they may have had enough of the state's high taxes.
"Rock Island County Clerk (Dem) Karen Kinney says they've seen about 30 percent more early voters than in 2014 in the county," Evans said on his Facebook page in response to excerpts from the IPI study, which he also shared.
"She says about 4,300 people voted early (in the primary election)," he wrote. "The others are expected to turnout in high numbers for Primary Day as well."
The out-migration has the attention of some reform-minded legislators, but so far the efforts have been fruitless. In “6 ways Illinois lawmakers can ease the property tax plan” published by IPI in January, writer Vincent Caruso suggests freezing property taxes or various reforms to wages and pension as ways to make the state more attractive to residents contemplating a move.
One proposal is to tweak a 1941 law requiring government oversight of wages paid to construction workers on public works assignments. Caruso writes that these wages are “inflated” and outpace those on nongovernmental projects.
Caruso also advocates addressing a “power asymmetry” that allegedly puts the government, i.e., taxpayers, at a disadvantage to unions on public works wage bargaining.
“In Illinois, there’s virtually no limit as to what government worker unions are allowed to heap onto the negotiating table,” he writes.
In contrast, other states are allowed such limits when they negotiate wages on public projects.
In another IPI piece, this one from 2014, “Illinois ranks first in number of local taxing bodies,” author Brian Costin points out the state has almost 7,000 different entities that are allowed to levy taxes upon citizens. Costin suggests it may be time to reform this structure by streamlining the number of individual school districts, which are mostly the recipients of the property taxes gathered in each locality.
One target of cost-cutting efforts may be front-office attrition, rather than affecting the classroom. For example, Caruso’s article mentions that Metropolitan Planning Council gauges the cost per student for administration as $518 – the nation’s highest.
“Until Springfield takes smart steps toward making the Land of Lincoln more attractive for families and businesses, Illinoisans shouldn’t expect to win out against neighboring states,” concludes IPI's Berg.