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].

Comments

[dbrett480]

02:49 PM on 02/09/2012

I'm not sure what someone is trying to prove. States with Republican governors still have higher growth rates.

[MrPragmatic]

09:49 PM on 02/07/2012

Illinois has a much higher GDP than either Indiana or Wisconsin. Illinois is number 5. Indiana is number 16 and Wisconsin is at 20. The Chicago metro area has the 4th highest GDP of ALL metro areas in the world. It's time that Illinoisans and Chicagoans look for the positive and make positive changes to build up our economy rather than constantly wallowing in the negativity.

[mcartri]

05:43 PM on 02/07/2012

I live in Illinois and thank God everyday we don't have the extremist, 1%-owned sock puppet , Greed Over People(GOP) in control of our state government.

[robert horwitz]

09:49 AM on 02/07/2012

First we shipped most of our manufacturing jobs out of the country. I guess our politicians thought this would be a great export policy. Now the states are fighting for the few manufacturing jobs that are left and trying to compete against two bit wages with no benefits from developing countries by working us like slaves for next to nothing to bring the business back here. I guess that our politicians think that this is a great import policy. Well now I'm getting on in years and retired. In about twenty years come and knock on my box and tell me how it all worked out.

[Chicago1771]

08:30 AM on 02/07/2012

This is a forecast for the next 6 months not how the state is currently. Illinois can not pay it's bills on a regular basis and our so called Governor keeps spending and spending. Vote Quinn 2014

[themodernleader]

12:32 AM on 02/07/2012

There must be coordination between Washington and the states in reinvestment and re-industrialization. Federal monies must be givento the states on the condition that it directly hires the unemployed on maintenance programs such as new sewers, waterlines, repaved alleys, cleaned our streams, rebuilt levies and so on.

[bobste]

06:28 PM on 02/06/2012

Politics goes the way the wind blows, and these days the wind is generated by propaganda. I returned to my home state of Illinois from Wisconsin last week and there was a billboard at the state lines that has Abe Lincoln with his pockets turned out: It says, "Welcome to Illinois...we're still broke." I hate this propaganda garbage.

[corwin]

09:54 PM on 02/06/2012

Diffidently, I must ask you to comment on the bond rating of Illinois,yearly budget defict, unemployment rate,emigration of the educated class, loss of electoral votes and attempts to increase revenue by (chuckle) fining people for not keeping vacant lots trimmed .And,of course the movement to make the official state coin aluminum.
Propaganda/ Po Tah toe

[Steve Davis 1]

01:51 PM on 02/06/2012

This is another reason VA Gov. Bob McDonell's statements on CNN yesterday about the improving economy were such nonsense. There is no correlation between the new extreme GOP/Tea'er governors and a state's economic performance. The appeal to act like adults was also my theme of an editorial back in 2009. It is a difficult approach to achieve in Illinois, every state at least should try being sane.

[ejhickey]

01:18 PM on 02/06/2012

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

So if we are going to have this grown up conversation, will that include a discussion of what must be done to pay our past due bills and eliminate our unfunded pension debt? Will that include an admission that in order to pay these bills taxes are going to have to be raised again ? will that include a promise of no more special tax breaks for corporations like sears, CME and Groupon?

[OldSchool4942]

01:28 PM on 02/06/2012

If they would collect the taxes that are owed them it wouldn't be such a problem. If they went back and resinded the real estate taxes on business, education would be in better shape. If the unions and legislature could sit down and extend the length of time to pay back pensions, that would ease budget problems. But we have people like the party of NO that just want to point a finger a spew.

[ejhickey]

02:01 PM on 02/06/2012

what are you talking about? first , local governments pass and collect real estate taxes, not the state government. second , if real estate taxes are “rescinded”, that means they would be rolled back, reduced or eliminated. Education in this State would be in WORSE shape because there would be LESS money , not more. As for pensions,they are paid over peoples’ lifetime from the time they retire to the time they die. there is nothing the legislature and unions can do about that. Besides Extending the time pensions are paid would mean that Illinois would pay out MORE money, not less. What OLDSCHOOL did you go to ? the College of Reverse Thinking?

[corwin]

10:02 PM on 02/06/2012

Diffidently, I mus point out a couple (or more) things.
1) You can't impose taxes on prior years.Even in Illinois.
2)The pension deficit is growing larger each year.
3) Pensions are paid on retirement
4) rescinded is spelled with a 'c'.
5)The new taxes on alcohol, unmown lots and redlight cameras should solve everything
Corwin. Cruel.But only to be Kind.
6)94 wasn't blocked in time. The Smart People have fled .And Atlas is Shrugging

[Aldyth]

12:55 PM on 02/06/2012

Given how messed up Illinois government is, it is pretty astonishing.

[corwin]

10:02 PM on 02/06/2012

Not really

[lvogt]

12:48 PM on 02/06/2012

Illinois has something that Indiana and Wisconsin don't have... Chicago, a great economic engine.

[thorolyfedup]

12:47 PM on 02/06/2012

In 2011, for the first time in (I think) 5 years, Illinois state employees received a 2% 'cost of living' pay increase. Prior to that, all wages were frozen.

[MWA1111]

01:20 PM on 02/06/2012

Your point? How about comparing that to the private sector and include all the people that have lost their jobs over that same time frame.

[OldSchool4942]

01:29 PM on 02/06/2012

Many state county and local jobs have been lost too.

[thorolyfedup]

08:09 PM on 02/06/2012

Tell you what, you do it for me and save us both a lot of trouble.

[JAYDUBELL]

12:35 PM on 02/06/2012

I guess something about living here has for some reason really blurred my vision. I didn't realize we had it so good.

[Ablecynic]

12:33 PM on 02/06/2012

This article sounds a bit like the old joke about the State Motto of Mississippi -- "At Least We're Better than Arkansas!" The new Illinois motto should be "We're not sinking into debt as fast as other Blue States!"

[Dan Crabtree]

12:31 PM on 02/06/2012

Still wallowing in a sea of red ink this democrat haven for eons continues to ignor there plight..Waiting in desperation for one Barrack Hussien Obama and his new democrat senate and congress to float a bail out bill for all troubled democrat states.Coming next year of course..

[OldSchool4942]

01:34 PM on 02/06/2012

Rewriting history? The legislature turned Democratic in 1990s. We have had how many Republican Governors? The mess in this state started under Republican leadership. Just like the federal mess started under Bush. They (the Repub. Congress) never voted no on a single spending bill.

[podurk]

09:00 AM on 02/08/2012

http://en.wikipedia.org/wiki/Speaker_of_the_Illinois_House_of_Representatives

Sixteen of the last 20 IL General Assemblies controlled by Democrats, including 14 of the last 15 since 1983.

Who's rewriting history?