02/06/2012 10:18 am ET | Updated Feb 06, 2012

Illinois Economy Better Than Indiana, Wisconsin? New Index Says Yes

Just last week, anti-tax crusader and Americans For Tax Reform President Grover Norquist made sure to slam Illinois while praising the economic policies of Indiana Governor Mitch Daniels.

"While Pat Quinn's Illinois continues to tax and spend itself into oblivion at the behest of union bosses, Mitch Daniels' Indiana stands as an example for the entire Midwest," Norquist said.

Gov. Quinn is likely used to the criticism by now. Both Gov. Daniels and Wisconsin Gov. Scott Walker have tried luring businesses from Illinois to their states, saying a tax hike passed by Quinn last year has made the Land of Lincoln unfriendly to businesses. But, as Rich Miller of the Capitol Fax blog pointed out Monday, things might not be so bad in Illinois after all.

Miller pointed to the Federal Reserve Bank of Philadelphia's latest six-month forecast of state economic conditions. The map (embedded below) shows that Illinois economy will grow in the next six months, decrease in Wisconsin and grow only slightly in Indiana.

The bank explains how it came to these conclusions:

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Map from the Federal Reserve Bank of Philadelphia

Miller pointed to the index as a sign that things in Illinois aren't as bad as everyone thinks. After Gov. Quinn's State of the State address last week, he was mostly blasted by Republicans and Democrats alike for not addressing the state's budget problems enough. But, as Miller wrote in his newspaper column, that is not the point of the address.

"Yes, it was heavily criticized for being way too light on budget specifics, but, hey, this was not a budget speech. Comptroller Judy Baar Topinka said Quinn was "putting dessert on the table before the vegetables." Well, yeah. But the broccoli address will be delivered in just a couple of weeks. Next year’s budget will be the toughest one Quinn has ever crafted. I can wait a couple of more weeks to see what he’s going to do.


We have serious problems in Illinois. But it’s time to stop wallowing in all our failures and divisions.

Admit mistakes, face up to the problems like grown-ups and move forward together. Is it really too much to ask?"

Check out the full state index report here [PDF].