One way we can know that the state might be on the right track in setting economic policies is hearing words of envy from neighboring states, such as the recent complimentary remarks from Michael Lucci of the Illinois Policy Center.
Illinois, he recently wrote, has several advantages over Indiana, “including a global city — an important asset at a time when large cities are increasingly important as economic engines. Illinois should at least be on par with Indiana’s growth rate.”
Yet personal income is growing faster here than in Illinois: “And one of the biggest differences between the two states is that Indiana’s government has spent the past decade focused on economic growth and job creation, while Illinois’ has not.”
Illinoisans would have an additional $38 billion of personal income each year if it had simply matched Indiana’s income growth over the past decade. That additional income would translate into more than $4.2 billion of annual state and local tax revenue.
Personal income has grown by only 2.8 percent per year in Illinois, compared to 3.4 percent per year in Indiana. “That might not seem like a big difference for one year,” he wrote, “but that difference adds up over time.”
More personal income means more jobs, higher wages and more tax revenue, he says. Illinois state and local governments would have an additional $4.2 billion in annual tax revenue if Illinois’ growth had been in line with Indiana’s over the last decade.
He believes Illinois politicians should follow the lead of former Indiana Gov. Mitch Daniels if they want the type of job creation and income growth Indiana is achieving. Daniels changed our policies to prioritize taxpayers, job creation and income growth over government bureaucracy and excessive regulation.
If Illinois does similar reforms, it “will experience similar results. Illinoisans will achieve additional billions in annual income growth that the state is currently frittering away by driving out businesses, maintaining an expensive government bureaucracy and suffocating growth with red tape.”
We can draw two lessons. One is to keep adding sensible policies, even if results are not immediately evident; they soon will be.
The other is that we can never stand still. Sooner or later, other states will catch on and emulate us, so we must stay one step ahead.