Illinois Is A Drag On US Economy, Continues To Be A 'Taker' From Federal Govt; New Report Shows

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by Tyler Durden
Tuesday, Jul 09, 2024 - 09:40 PM

Authored by Mark Glennon via,

If you think Illinois’ problems only amount to Illinois voters getting what they deserve, you are mistaken.

A new report says Illinois, with the fifth largest state economy in the nation, is helping pull the country down.

It should come as no surprise, therefore, that other new reports continue to show that Illinois is a “net taker” in terms of its balance of payments with the federal government. Five years ago, Illinois gave up its long-held claim that it sends the federal government more than it gets in return, and that “net taker” status continues today.

Succinct evidence of Illinois’ underperformance is in the June report by COGFA, Illinois’ bipartisan Commission on Government Forecasting and Accountability. In that report, COGFA set out to compare Illinois’ economic performance to the rest of the nation since the start of the COVID pandemic. They chose four metrics to do so: 1) Real Gross Domestic Product (GDP), 2) Total Nonfarm Payroll Employment, 3) Unemployment Rate, and 4) Total Personal Income.

The results are damning for Illinois by all four measures, with the state ranking from 45th to 47th on each among the states:

  • Real GDP: Since the fourth quarter of 2019, the United States has grown 8.6% post-COVID-19, but Illinois’ economy has grown only 2.8%, ranking 46th among the states.

  • Total nonfarm payroll: The U.S. and Illinois both lost jobs during the first two months of the pandemic. But since then, U.S. payrolls grew by 4.1%. Illinois, however, has barely surpassed its pre-COVID-19 level, with only 0.2% growth. That ranks Illinois 45th in the nation.

  • Unemployment rate: From March 2020 through May 2024, the U.S average unemployment rate was 5.1% but Illinois was 6.0%, ranking Illinois 45th in the nation. Illinois has consistently been about 0.8% to 0.9% above the U.S. average for the last decade. Currently, Illinois’ unemployment rate was 4.9% in May, which is 0.9% higher than the U.S. average of 4.0

  •  Personal Income: Illinois was one of the slowest-growing states regarding total income growth since the outbreak of COVID-19. Since the fourth quarter of 2019, Illinois’ total income grew by 22.0%, significantly below the U.S. increase of 27.2%, ranking 46th over this period.

Notably, Illinois did much worse than all of its neighboring states by each of those measures for those periods.

The only exception is that Wisconsin was 47th worst on GDP growth while Illinois was 46th. Full state-by-state comparisons are in the charts in the COGFA report.

The conclusion is clear: Illinois is underperforming and is pulling down national averages about economic health.

Two other recently released, national reports show Illinois as a drag on the nation down from a different angle.

Each year, the balance of payments between the federal government and each state is calculated in separate studies by the Rockefeller Institute and the New York Comptroller. They tally up all taxes and other payments made by residents of each state and compare that to the total that comes back to the state through grants, contract payments, military spending, social programs and everything else. 

Once again, both studies show Illinois with a positive balance of payments, meaning the federal government sends more to Illinois than Illinois sends in.

Historically, Illinois complained routinely that they sent Washington more than they got in return. Some Illinois politicians continue to make that claim. It hasn’t been true, however, since 2019 to 2020.

Schadenfreude feels nice when you think about Illinois voters who elected the people responsible for this, but know that Illinois’ problems are also America’s problems.