By: Ted Dabrowski and John Klingner
When Paul Serwatka, the reform-oriented mayor of the small Village of Lakewood called it quits on Illinois more than a year ago, he and his family picked out the area of Huntsville, Alabama, for their new home.
“Alabama?” a couple of his Illinois neighbors asked. But Sertwatka isn’t alone in heading for Alabama. It’s attracting many Illinoisans because parts of the state are booming in jobs, investment and population. And it costs a lot less to live there. Serwatka says “we’re not looking back.”
More than 29,000 Illinoisans have moved to Alabama since 2010, according to U.S. Census data. In contrast, just 15,000 Alabamians moved to Illinois over that same time period.
Illinois was the 2nd-highest net supplier of residents to Alabama over the period.
Like most states in the country, Alabama is beating Illinois in the competition for people and their incomes. It’s going to take a lot of structural changes in Illinois to reverse those numbers.
Unfortunately, the only ideas politicians have for Illinois are higher taxes, including property taxes and progressive income tax hikes. Not only will they make it more expensive to live in Illinois, but they’ll drive more people out and depress home values even more. Wirepoints has covered both trends in detail in our out-migration series and property tax research.
Serwatka’s flight from Illinois is all the more interesting because he did what few other local politicians in Illinois could manage: He passed major fiscal reforms in his community.
During his time in office, Serwatka lowered Lakewood’s city property taxes by 10 percent without service cuts. He also scrapped a previously approved $66 million TIF before it could break ground, resulting in a tax refund for some residents.
But his successes as mayor were overrun by the failures coming from state politicians. Higher property taxes and income tax hikes were their only answers to the pension mess. And top-down controls were creating more economic havoc for small cities.
Serwatka worried about his young family and their future. So he did what so many families have done in the last two decades. They did the math and decided to flee.
In all, Illinois has lost people, on net, to 39 other states over the past decade according to state-to-state migration data from the U.S. Census Bureau. Loses to its neighbors have been particularly large, with Indiana and Wisconsin netting more than 100,000 Illinoisans each. The number of people Illinois gained from the remaining 10 states is small in comparison.
Serwatka originally focused his search in Tennessee, but he quickly found that property values and taxes had already crept up as a result of the flight to the Nashville area. He felt he’d already missed the boat.
But Alabama, especially northern Alabama, still looked good.
“Never mind the stigma,” Serwatka told Wirepoints. He did his homework and was confident about the move. He now has a bigger house on several acres and pays a fraction of the property taxes he used to – just $2,200 a year now vs. the $15,400 he paid on his home in Illinois.
“We have no doubts we made the right decision for our family, and our bank account is already up more than $20K just in tax savings,” Serwatka said.
On top of all that, the area where he lives is flourishing.
Huntsville, Alabama, nicknamed the Rocket City and home to the ASA/Marshall Space Flight Center, is experiencing rapid growth. It’s booming in investment, jobs and population to the point where the city is facing growth-related problems.
Mazda Toyota Manufacturing USA is moving forward with 4,000 new jobs and a $1.6 billion investment for a new plant. Facebook is building a $750 million data center in Huntsville.
And the FBI is adding 1,350 positions at the Redstone Arsenal.
“Who knows,” said Serwatka, “my property value could double in the next five years.” With AAA-rated Huntsville on track to become the largest city in Alabama within six years, that just might be possible.
Funny enough, while some Illinoisans made fun of Serwatka for moving to Alabama, the stigma of being an Illinoisan followed him down south. His new neighbors were worried Serwatka would bring “Illinois politics and policies” to Alabama.
Luckily, Serwatka could point to his reforms as an Illinois mayor to overcome their concerns. But Alabamians are right to be worried about Illinois’ politics and policies.
Politicians’ poor decisions are why Illinois has lost more population than any other state in the nation. Illinois is one of just three states to lose population since 2010.
Read more about Illinois’ out-migration problems: