STUMP » Articles » Illinois: Be Seein Ya! » 4 October 2017, 18:18

Where Stu & MP spout off about everything.

Illinois: Be Seein Ya!  

by

4 October 2017, 18:18

Today’s Illinois theme is escape.

Running away, walking away, whatever it takes.

Here’s Eric Allie’s take

POLITICIANS LEAVING

ILLINOIS LAWMAKERS STAMPEDE FOR THE EXIT

The most likely driver is pretty obvious to most Illinoisans: the rage of constituents.

Thirty state lawmakers in the 100th General Assembly will not be holding their seats in the 101st General Assembly. And that’s not even counting those who might be ousted at the ballot box next year.

The exodus is unlike anything Springfield insiders have ever seen.

…..
Let’s take a look at the breakdown of who’s leaving, and why.

In the House, 23 lawmakers will not return to their seats in the 101st General Assembly. That’s nearly a whopping 20 percent of the chamber. The situation is less severe in the Senate, where seven members are certain not to return.

Of the 30 total members of the General Assembly who will not hold on to their seats, three have resigned. Twenty are not running for re-election. Two are House members running for Senate seats. And the remaining five are running for office outside the General Assembly: one for governor, two for lieutenant governor, one for attorney general, and one for a seat on Chicago’s Metropolitan Water Reclamation District (yes, really.)

…..
But the most likely driver is pretty obvious to most Illinoisans: the rage of constituents.

I am not digging into this right now, but I remember in older years, where some politicians would be eligible to get government pensions if they “retired” from their seats as opposed to getting voted out. I don’t really care if that’s involved here – lots of people have been sitting on their asses in the Illinois Assembly for long enough to get vested (and they have eligibility in the non-legislative pensions).

Anyway, that piece from Illinois Policy Institute was from September 28.

Other Illinois politicians bowing out:

There are questions as to whether Rauner will re-run for governor.

That’s not really all that important, as Rauner has shown how ineffective he is against the Assembly. And Quinn before him. And whats-his-face-the-felon before him. At least neither Rauner nor Quinn will end up in federal prison. Probably.

There may be others, but when career politicians just “coincidentally” decide to retire en masse… yeah, there may be something going on.

I believe the real canary in the coal mine when Richard Daley decided it was time to pack it up as mayor of Chicago. It was his sinecure, and he walked away in 2011. Rahm Emanuel is learning what ugliness was left for him to deal with. What a sucker.

It’s not just a matter of constituents being pissed off. It’s the fun money being gone. Not much to play with now.

RESIDENTS LEAVING

Bill Berman asks: Fleeing or flocking?

United Van Lines has published an annual interstate migration study for decades. Looking at that study, along with state government financial conditions and related factors, you typically see that states in bad financial shape also tend to have lower trust in state government, and in turn, higher out-migration in recent years.

In addition to states’ migration trends, United Van Lines recently began publishing an analysis of cities. Using a slightly different method, the moving company reported the 10 cities with the highest net in-migration as well as out-migration.

We took a look at those cities to see how they fare in Truth in Accounting’s latest analysis of financial conditions of the nation’s 50 largest cities. Of the 50 largest municipalities, the average Taxpayer Burden calculated for the nine cities with the highest in-migration is one-fourth as high as the average for cities with the highest out-migration. Four of the cities with the highest out-migration rates were New York, Chicago, Boston and San Diego, according to United Van Lines.

Here’s another way to look at it — the average Taxpayer Burden for the six states that have the 10 cities with the highest net out-migration runs five times as high as the average of the Taxpayer Burden for the nine states that are home to the top 10 cities for in-migration.

Illinois, New York and New Jersey account for five of the 10 cities with high net out-migration rates in the United Van Lines study. You can see the lists of the cities United Van Lines ranked here.

We will be releasing an updated report on the finances of the 50 largest cities in the US in January 2018.

United Van Lines’ lists:

Based on United’s summer moving volume data, the most popular metro areas for U.S. families to move to this peak season were:

1. Seattle, Washington
2. Dallas, Texas
3. Portland, Oregon
4. Denver, Colorado
5. San Francisco, California
6. Atlanta, Georgia
7. Austin, Texas
8. Las Vegas, Nevada
9. Charlotte, North Carolina
10. Orlando, Florida

The data also revealed the top metro areas families moved from this peak moving season:

1. Chicago, Illinois
2. New York, New York
3. Nassau-Suffolk, New York
4. Boston, Massachusetts
5. Norfolk, Virginia
6. San Bernardino, California
7. Bergen-Passaic, New Jersey
8. Newark, New Jersey
9. Washington, D.C.
10. San Diego, California

All of these are very large places. I’m not sure how they made their ranking lists. If they did some sort of rate (# of moves divided by # of households in the area), then sure, this makes sense.

If they’re just using absolute # of moves… well, look. The largest cities are likely to have the largest number of people leaving, in an absolute sense. So I withhold judgment right now.

HEARING FROM THE FED-UP

But hey, have some anecdata.

Fed-up Illinois homeowners consider moving: ‘It’s not just the property taxes on my home; it’s all of them’

Even after watching Hurricane Irma wreak havoc on Florida, Rik Mallin is sticking to his plan.

Mallin is fixing up his Villa Park home so that he can sell it, move to the Florida Panhandle and escape Illinois’ rising taxes.

“I’m getting out,” said Mallin, 67. “It’s not just the property taxes on my home; it’s all of them.” He figures his taxes in Florida, where there is no personal income tax, will be about a quarter of what he’s paying now.

Mallin’s not the only one leaving the state. In 2016, Illinois lost 37,508 people, putting the state’s population at its lowest level in nearly a decade, according to U.S. census data. It was the third consecutive year the state lost more residents than any other state. The state’s population count for 2017 won’t be released until December.

Some of those who are leaving Illinois say they’re frustrated with their tax burden and the state’s financial situation. After going more than two years without a budget, Illinois lawmakers passed a spending plan over the summer, one that involved a 32 percent income tax hike for residents. The state is still digging itself out of the financial disarray that accumulated during the budget impasse. A Forbes listing of the best and worst states for taxes in 2016, before the tax hike, ranked Illinois 46th, signifying a heavier tax burden.

…..
Ramella contrasted most of the Chicago metro area with Lake County, Ind., which has experienced heavy housing growth that Ramella attributes to a flight from Illinois taxes. Housing construction in northwest Indiana increased 18 percent this year over last, and in 2016 the number was up 19 percent over 2015. Meanwhile, Cook County is down 6 percent this year over last, and home construction in many other Illinois counties is flat, he said. DuPage County experienced an upturn of 5.9 percent this year.

Sheila Tracy, a Chicago optician, said the recent income tax hike as well as the sweetened beverage tax implemented by Cook County in August both seem like desperate governmental attempts to deal with unresolved financial problems.

“It was the last straw,” said Tracy, who plans to relocate away from the state once she retires in three years. “They say the soda tax is about my health, but they aren’t fooling people.”

Oh ho! The soda tax creeping in! Don’t worry, I’ll have a soda tax post tomorrow.

UNDERWATER MORTGAGES IN CHICAGO

Here is something troubling:

According to CoreLogic, a global property information firm, the Chicago area is one of the U.S. metropolitan areas with the highest percentage of homeowners underwater with their mortgages, meaning they owe more than their homes are worth. During the second quarter of this year, 10.8 percent of residences in the Chicago metro area were underwater, compared with 13.5 percent during the second quarter of 2016, according to CoreLogic.

Okay, that’s both good and bad.

Good, because the underwater rate is improving.

Bad, because it’s twice the national average. According to CoreLogic’s report, only 5.4% of homeowners were underwater on their mortgage.

Being underwater like that is not a good thing.

Here’s a good graph of what this looks like:

Chicago is all the way over to the right with Las Vegas and Miami. Those are not good places to be. That they’re underwater by $100K on average doesn’t really help. That’s a hefty hunk of change for most people, and being underwater on a mortgage means it’s difficult for somebody to leave without declaring bankruptcy.

SIX MONTHS AND ONE DAY

Okay, here is something that many people in high tax places like New York know: it pays to be declared a resident of Florida (legally, mind you).

I have relatives and acquaintances who spend at least 6 months + 1 day in Florida to maintain their residency for income tax purposes. If I remember correctly, Rush Limbaugh (Florida resident) makes sure he does no business in New York except charity stuff.

Back to the Tribune article:

The day after the Illinois legislature voted to raise the individual income tax rate from 3.75 to 4.95 percent, Northfield-based financial planner Ellen Rogin said she started getting phone calls from clients who are residents of Chicago with second homes in Florida.

The clients, according to Rogin, were saying “I’m worried about Illinois. Should I be moving to Florida?”

Rogin said anyone considering a move has to look at lifestyle, not just taxes.

Chicago certified public accountant Debbie Lessin said that when people consider a move for tax reasons in retirement, they may be missing a crucial element of Illinois’ tax system.

Illinois doesn’t tax retirement income from Social Security, pensions and IRAs, an advantageous provision for retirees living in the state, she said.

Yeah, and you get the nasty Illinois climate. Seriously?

Florida also doesn’t tax those. And I hear tell lots of old folks love its climate. And it has yet to pass a soda tax.


So something to keep in mind. Illinois is coming up on worse public finance times soon.

So whaddya gonna do?

via GIPHY


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