\n\t\t\t\tState residents earn more than they did in 2019 but are falling behind the rest of the country while the tax burden drives out businesses.
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Income growth in Illinois lags the U.S. under Gov. J.B. Pritzker, while his tax increases drive out businesses and thus opportunities.<\/p>\n
Since 2019, Illinois\u2019 per capital personal income has grown about 35%<\/a>, compared with over 37% nationally. Illinoisans now trail the nation in income growth after previously keeping pace.<\/p>\n This comparative slowdown points to weaker economic momentum in Illinois, consistent with reduced business investment<\/a> and job creation<\/a> compared with the national average. While growth in Illinois appears to have accelerated under Pritzker, that improvement largely reflects a strong<\/a> national post-pandemic rebound and high inflation.<\/p>\n<\/p>\n Some of the highest tax burdens<\/a> in the nation, businesses<\/a> leaving, high unemployment<\/a> and fewer opportunities<\/a> have combined to leave Illinoisans worse off.<\/p>\n Illinois\u2019 roughly 35%<\/a> personal income growth since 2019 ranks 39th in the nation \u2014 and worse than any of the state\u2019s neighbors. Meanwhile, Illinois state tax collections have surged<\/a> 46%<\/a>. The gap shows that state government is growing<\/a> faster than residents\u2019 ability to pay.<\/p>\n Sharp increases have hit drivers, with gas tax collections increasing more than 116% since 2019 and taxes on private vehicle use, including registrations<\/a>, growing nearly 82%.<\/p>\n The largest saving grace for Illinois has been its flat income tax. Individual income tax collections have grown 28% since 2019, slower than the growth in personal income, driven down partially<\/a> by state deductions, exemptions and credits.<\/p>\n Even the flat tax has been under attack, with recent pushes<\/a> for a graduated tax and a \u201cmillionaire\u2019s tax\u201d bill in the General Assembly. A graduated income tax \u2014 which would require a voter-approved amendment to the state constitution \u2014 would let lawmakers raise rates on targeted groups, making future tax hikes easier.<\/p>\n High taxes push out businesses<\/p>\n A large driver of state revenue growth has been business income taxes, which have increased nearly 140% since 2019. High taxes have been a key factor<\/a> in companies leaving Illinois, affecting residents through lower investment, fewer job opportunities and slower wage growth. The state is projected to continue experiencing<\/a> unemployment rates higher than the national average.<\/p>\n These trends erode Illinois\u2019 built-in advantages. Historically, the state has maintained higher personal income than the national average, benefiting from its central location and Chicago\u2019s role as a global economic hub.<\/p>\n If residents<\/a> and businesses<\/a> continue to leave, Illinois will face increasing difficulty sustaining its economy.<\/p>\n What should change<\/p>\n Illinois needs real reform to move toward a more stable future. That starts with transparency<\/a> in the budget process instead of approving pay increases and funding questionable programs with little scrutiny. The state risks further weakening its economic foundation if it doesn\u2019t lower its spending.<\/p>\n