By: Ted Dabrowski
At Wirepoints, we’ve covered the impact that Illinois’ punishing property taxes are having on South Cook families. Their home values are being destroyed and their disposable incomes consumed. Effective tax rates of 3 to 5 percent or higher are chasing people, many of them with limited means, out of their homes. The Chicago Tribune and others have reported on the exodus of blacks from the Chicago area as fewer jobs, more crime, a failing education and higher taxes make Illinois unlivable.
But it’s not just people with limited means that are looking elsewhere for a more fair deal. Some on the North Shore also don’t like what they see. They don’t like how they’re being disrespected by their politicians – paying ever-higher taxes for ever-fewer services. And as Illinoisans leave, the state’s tax base shrinks, making it even harder on those who remain.
One of those people leaving is a North Shore neighbor I recently met. He and his family are leaving Illinois for Colorado.
For him, the calculus was simple.
Stay and pay more and more for a government he trusts less and less, or leave and save $1 million dollars.
His North Shore property taxes are about $27,000 a year. Taxes on his new home in Colorado – he’s already purchased the home – are just $3,300.
Saving that difference year after year, and investing those proceeds at 6 percent, means he will save $1,000,000 over 20 years. For retirement. For healthcare. For his kids’ education. Or for charity and travel.
And Colorado isn’t going to swallow those property tax savings with a different set of taxes. Illinois has the highest state and local tax burden in the nation, according to Wallethub. Colorado has the 39th highest burden.
That’s the same sort of calculation that people across Illinois are doing, whether it saves them $10,000 or $1,000,000. They are doing the math and looking for an exit. A 2016 Paul Simon poll found that 47 percent of Illinoisans want to leave Illinois and their number one reason for leaving is taxes.
And the house my neighbor is getting in Colorado for just $3,300 in property taxes and at a much lower price than his Illinois house? It’s on more than an acre. A beautiful location on the side of a mountain. Paved roads. Top schools. And just an hour from some the best ski slopes in Colorado.
A million people and more
Residents have been leaving Illinois at an alarming rate to find better opportunities elsewhere. From 2000 to 2017, Illinois lost a net of more than 1.3 million people to other states. That’s the equivalent of wiping Aurora, Rockford, Joliet, Naperville, Springfield, Peoria, Elgin, Waukegan, Cicero, Champaign and Bloomington off the map.
In 2017 alone, Illinois lost over 114,000 people. That net loss of people to other states now outpaces international immigration and net births in Illinois. As a result, Illinois is shrinking.
Illinois has now lost population four years in a row. Only West Virginia has that same distinction.
Nearly five years ago I received wise counsel from three Detroit-area residents – a newspaper reporter, a municipal bond expert and a civic leader – just days after the city went bankrupt. I was on a fact-finding trip to the Motor City to learn what I could from the city’s sad demise. Their assessment not only helped me understand how we ended up with the Detroit of today, but also to heed the warnings of how failed government policies can destroy people’s lives.
The most important lesson I brought back to Illinois was this: Respect the taxpayer. Detroit didn’t, and everyone left.
Unfortunately, that lesson is lost on Illinois politicians. Rather than reform Illinois’ corrupt ways, the only solution they continue to offer up is higher taxes. Even as services get cut, the political elite are comfortable saying “it’s time to pay up.” They ignore that Illinoisans already pay the nation’s highest taxes.
But Illinoisans know their burden. They know they get little value for their money. And they know they’re disrespected. And so they leave.
It’s high time Illinois politicians begin respecting their constituents.
If not, Illinoisans have choices. And they can do the math.