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Illinois this week earned the honor of becoming the first state in 2011 to sock it to taxpayers, passing a tax hike the size of Lake Michigan. Citizens cried out, legislators deflected, but the most interesting response came from neighboring Wisconsin, where newly elected GOP Gov. Scott Walker had three words for Illinois businesses: "Escape to Wisconsin."
Across the country, dozens of new governors are taking office, fine-tuning state-of-the-state addresses, polishing budgets. With each event we are seeing a growing national divide.
On one side are wide swathes of the country that this past midterm elected reformers intent on slashing spending and reviving growth. On the other are the holdout pockets—Illinois, California, Massachusetts, Connecticut—drifting further into the abyss of tax and spend. The chasm has huge implications, not just for local and regional politics but for Washington.
Mr. Walker is painting that gulf as big as the Grand Canyon, this week blitzing the Chicago media markets to let suffering Illinois businesses know that while their governor, Pat Quinn, levies a 50% increase in corporate income taxes, Wisconsin is working to enact the total elimination of corporate income taxes for two years for firms that migrate. The "Escape to Wisconsin" line comes from an old tourism campaign, but Mr. Walker thinks it sums up the business choice perfectly. "We're going to send out that line to every employer in the state of Illinois," he tells me.
Location: Austin, TX/Chicago, IL/Houston, TX/Washington, DC
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You know I hate to be the one to say it, but they're going for a short term goal with this. To reduce state debt by over taxing, while they think that will be beneficial but it will make the area very unattractive to new comers or possible new residents, which is the immediate concern first and foremost. Illinois is kind of putting nails into its own coffin, and this is seriously gearing Indiana and making it easier for them to step up their game, which they've already been doing all of last decade.
Indianapolis, is probably going to become a new "Boom" face for the Midwest's big cities. And it's got a very promising start up. Indianapolis already has the bones to become the next big logistical hub, surpassing everything due to the location. For trucking (land), air cargo (airport), & rail it's already got the infrastructure to make it happen. Much more like a Chicago Lite in many regards, if it makes use of that, its kind of lights out to any regional competition trying to go against Indianapolis.
You know I hate to be the one to say it, but they're going for a short term goal with this. To reduce state debt by over taxing, while they think that will be beneficial but it will make the area very unattractive to new comers or possible new residents, which is the immediate concern first and foremost. Illinois is kind of putting nails into its own coffin, and this is seriously gearing Indiana and making it easier for them to step up their game, which they've already been doing all of last decade.
Indianapolis, is probably going to become a new "Boom" face for the Midwest's big cities. And it's got a very promising start up. Indianapolis already has the bones to become the next big logistical hub, surpassing everything due to the location. For trucking (land), air cargo (airport), & rail it's already got the infrastructure to make it happen. Much more like a Chicago Lite in many regards, if it makes use of that, its kind of lights out to any regional competition trying to go against Indianapolis.
I'm agree, Indiana will be the gainer in this story : it's a reformed state, it's competitive, with a good budget, Dems and Reps work together and the potential is excellent, this state will have a very good decade, it's great to see the comeback of Midwest (except illinois/michigan).
Excerpt from the article :
Quote:
Indiana GOP Gov. Mitch Daniels, who has spent six years taking competitive advantage of dysfunctional neighbors, jokes that living next to Illinois is like "living next to the Simpsons." He attests to the benefits, noting that Illinois-based Caterpillar recently chose to direct a major investment to build locomotives to Muncie, Ind. And while he recognizes he's now got some competition, he sees the combined force of reformers in Wisconsin, Michigan and Ohio creating a "divide that could operate long-term in the Midwest's favor."
In Danville, though, owner Bob Watson of Watson Tire and Automotive Service says he might scratch his plan to hire another worker and may even consider a move 5 miles away to Indiana.
"I have to live on what I make," he says, "and so should the government.""
John Tillman, CEO of the Illinois Policy Institute, a non-partisan research group dedicated to free-market principles, says the tax increases could cost 268,000 jobs over the next three to five years.
It's just the beginning of a tough decade for illinois and Chicago.Illinois pop growth was low and the state lost jobs in the last decade, Chicago lost population..Imagine now !!!!!
Last edited by Wonderful Jellal; 01-14-2011 at 05:46 AM..
Indiana will be the gainer in this story : it's a reformed state, it's competitive, with a good budget, Dems and Reps work together and the potential is excellent, this state will have a very good decade, it's great to see the comeback of Midwest (except illinois/michigan).
Hey... don't lump Michigan in with Illinois! We just had a sweeping change in the last election and are set up very well for a reform and a rebound as well.
Hey... don't lump Michigan in with Illinois! We just had a sweeping change in the last election and are set up very well for a reform and a rebound as well.
I said for the moment because I thought about Rick Snyder, you're right
I hope he can reform Michigan
You know I hate to be the one to say it, but they're going for a short term goal with this. To reduce state debt by over taxing, while they think that will be beneficial but it will make the area very unattractive to new comers or possible new residents, which is the immediate concern first and foremost. Illinois is kind of putting nails into its own coffin, and this is seriously gearing Indiana and making it easier for them to step up their game, which they've already been doing all of last decade.
I'm afraid they can't see the forest for the trees... the 2000's was mostly a good decade for Chicago and I'm afraid they are about to throw it all away.
As a transplant who can "choose" to live pretty much anywhere, it is certainly not a good thing.
I know a lot of locals in many cities don't like transplants, but, that is the name of the game these days if a city wants to stay relevant.
If a city can't hold on to talent by enacting stupid policies, it leaves much less incentive for somebody to stay and make a place home. This is one of the reasons I've been wishy washy about Chicago as far as a long term place to settle down, and now 30, I have to start thinking about that.
If I am about to be taxed harder, and lose benefits like free concerts and what not, less fun money in my pocket to be here, I will start to consider other metros.
I know a bunch of my friends when I was in Chicago before (particularly those who want to settle down) already left. They didn't just go to the burbs, they left the state entirely.
The price point for Chicago is quickly diminishing in competition with other stellar cities, it was a much better deal just 5-6 years ago. Chicago was kicking and had 3% unemployment, just completed Millenium park, was soon to open another rail line, had many new building projects South Loop, Trump, River West, New East Side, etc etc. Fast forward 5 years and it has the 2nd highest state deficit, and unemployment worse than DC/Boston/NYC, all prime targets for people who might pick Chicago. I can tell the general mood of the city and action is a bit less now than 5-6 years ago too. It was honestly noticeable when I came back at the end of this summer.
I have no doubt Chicago will still attract a lot of regional transplants but it needs to stay relevant for national and international transplants or it is going to get left in the dust comparatively, the top talent and transplants will be the first to leave.
Won't the increase in income tax still make the income tax in IL lower than many other states? For WI and IN, I wouldn't count my chickens before the eggs are hatched, as those states also have budget deficits with which to deal.
In the long run, I think IN, WI, MO, etc. would be better off to think of innovative ways to grow jobs in their own states instead of looking to capitalize on other states' misery. As well, these states still have a long way to go as IL is still easily the most populous midwestern state, has the highest GDP in the midwest and has the city with the highest GDP in the midwest.
Won't the increase in income tax still make the income tax in IL lower than many other states? For WI and IN, I wouldn't count my chickens before the eggs are hatched, as those states also have budget deficits with which to deal.
In the long run, I think IN, WI, MO, etc. would be better off to think of innovative ways to grow jobs in their own states instead of looking to capitalize on other states' misery. As well, these states still have a long way to go as IL is still easily the most populous midwestern state, has the highest GDP in the midwest and has the city with the highest GDP in the midwest.
They're right you know.Nevada and Arizona was very small and pretty poor some decades ago.But they use the failed economic policies of California to aim residents and businesses to their state.These states are become rich, developed with a very good population growth.But you're right about innovative ideas, they must create their own businesses / success too, the businesses and people from the other states can help them.
Texas did that very well, now they're on their own.And you know it's not just Wisconsin or Indiana which will attract businesses/people from Illinois..Texas/Florida wants to do that, and they're much more interesting fiscally.Texas seems far, but they attract californians, new yorkers and people from Michigan so..
They're right you know.Nevada and Arizona was very small and pretty poor some decades ago.But they use the failed economic policies of California to aim residents and businesses to their state.These states are become rich, developed with a very good population growth.But you're right about innovative ideas, they must create their own businesses / success too, the businesses and people from the other states can help them.
Texas did that very well, now they're on their own.And you know it's not just Wisconsin or Indiana which will attract businesses/people from Illinois..Texas/Florida wants to do that, and they're much more interesting fiscally.Texas seems far, but they attract californians, new yorkers and people from Michigan so..
But isn't TX slated to have a large deficit as well? I mean, what will TX do to reduce its own deficit? This may sound very "kumbaya" but shouldn't the states work together to pull the country out of this mess instead of scrambling to get the leftovers?
Also, while I agree that AZ and NV have developed well, they certainly haven't trumped CA in terms of economic importance. Likewise, aren't all three of those states suffering extremely due to the current economic conditions, especially NV??
But isn't TX slated to have a large deficit as well? I mean, what will TX do to reduce its own deficit? This may sound very "kumbaya" but shouldn't the states work together to pull the country out of this mess instead of scrambling to get the leftovers?
Also, while I agree that AZ and NV have developed well, they certainly haven't trumped CA in terms of economic importance. Likewise, aren't all three of those states suffering extremely due to the current economic conditions, especially NV??
States working together? ha ha ... Yeah that isn't happening. It's hard enough getting one state to agree on something much less two.
Chicago companies moving to TX is nothing new.
I'm sure WI and IN have never been too happy with Chicago siphoning off their UW-Madison, UI-Bloomington and Notre Dame grads, especially the two former as those are funded with tax dollars hoping they might at some point pay back into the system and stay in state. I'm sure they would be glad to keep them.
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