Michigan and Illinois have a lot in common – they’re both in the upper Midwest, with cold climates and proud histories in manufacturing – but the similarities don’t extend to current trends in out-migration, according to demographics experts and newly released data.
Census data released late last year shows Michigan has turned a corner on out-migration to other states. As the recession began to take hold of the nation in 2007-08, Michigan suffered a net out-migration of more than 100,000 people. But the census figures show that hemorrhage dropped significantly by 2016-17, when the state lost just 12,395 people due to migration.
A similar trend has become apparent in migration numbers charted by the Internal Revenue Service, as well as surveys done by the moving company United Van Lines, according to Bill Bergman of Chicago-based Truth in Accounting, which monitors government financial data.
“Michigan has been able to arrest the long-term deterioration …” Bergman told Watchdog.org. “In the last decade or even the last five years, you’ve seen trends in Michigan that are promising.”
Illinois is a different story, he said, noting that although the state has claimed to have balanced its budgets in recent years, Illinois has been spending more than it has taken in. The city of Chicago has spent $1 billion more than it took in over the past five years due to inadequate accounting procedures, according to Bergman.
Illinois’ out-migration in 2016-17 outpaces Michigan’s number by nearly 10 times, according to the most recent census figures. Illinois suffered a net loss in migration numbers of 114,779 last year – more than double the number of people it lost at the onset of the last recession.
Michigan has made progress in getting its public spending in line with revenue, Bergman said. The state now delivers verified financial reports annually, he said, while Illinois’ last available audited budget figures are for the fiscal year that ended June 30, 2016.
In a recent blog post, Bergman found that the states with the largest out-migration numbers based on IRS tax return filings – Connecticut, Illinois, New York, New Jersey and Maryland – all had certain common characteristics. Among them are high taxpayer burdens, a lack of trust in government, and a high number of lawyers per capita.
“In the last five years, [adjusted gross income] has been moving toward states with low taxpayer burdens and fleeing states with high taxpayer burdens,” Bergman wrote.
But John Jackson, a visiting political science professor at the Paul Simon Public Policy Institute in Carbondale, sees problems with the conventional wisdom about why people may be leaving Illinois for other states.
The United Van Lines data, which indicates Illinois had suffered the largest net loss of people among the company’s customers, may not reflect general migration trends, according to Jackson.
“It’s skewed toward more upscale movers,” he told Watchdog.org, adding that younger and poorer people tend to use family members’ trucks or other less expensive options when they move.
The census data, however, is more convincing, according to Jackson, but he questions the idea that the state’s tax burden is what’s driving its out-migration.
“The voices who claim that are the loudest and best funded …” he said. “We are not a high income-tax state. We’re a medium tax state at the most.”
Illinois has a flat income tax that last year was increased from 3.75 percent to 4.95 percent. That’s more than some states assess but less other states’ numbers, Jackson said.
Illinoisans pay among the highest property taxes in the country, but they are assessed at the local level – by school districts, sewer districts, water districts, park districts.
“The long and the short of it is that property taxes are pretty high in Illinois,” Jackson said.
But some economic problems in the state, which has a much larger economy compared to its contiguous neighbors, also can’t be ignored, he said.
“The loss of manufacturing jobs and the slow recovery from the recession in 2009 is a fact and is kind of indisputable,” Jackson said.
In addition, the partisan budget impasse that once gripped the state starved higher education and human services, he said. Illinois sent 46 percent of its high school graduates out of state to attend college – at a time when the state needs well-educated people for high-tech industries.
“We are not generous toward higher education, and higher ed has been battered by the partisan impasse that has existed for two years,” Jackson said.
Others have cited spiraling administrative costs over decades for Illinois universities' enrollment issues.
An analysis by government watchdog Local Government Information Services found that the University of Illinois’ annual budget spiked 13-fold over enrollment growth since the early 1970s when adjusting for inflation. The budget for the university is nearly 400 percent higher now than it was 45 years ago in adjusted dollars, even though student enrollment in the system is up only 28 percent within the same time period, according to the analysis.
A 2015 report by the Illinois Senate Democratic Caucus sharply blamed administrative bloat and generous perks and benefits given to administrative staff in part of the skyrocketing expenses.
"At the same time tuition and student debt are rising at a breakneck pace, the administrative systems of public institutions have expanded into sprawling behemoths, with some of those at the very top enjoying lavish perks, including expense accounts, club memberships, vehicles and golden parachute severance payments,” the report said.
Illinois’ huge year-after-year out-migration problem remains a puzzle, according to William Frey, a demographer with the Washington-based Brookings Institution. Generally, small changes in taxes don’t prompt most people to pick up and leave a state, Frey said. Instead, availability of jobs is a key factor, especially for young people who are starting families.
“Illinois is more of the special case between these two states,” Frey told Watchdog.org. He added that Michigan has been better able to stem migration of its residents to the sun belt in recent years.
Reynolds Farley, professor emeritus at the Population Studies Center at the University of Michigan, said his state’s reduction in out-migration tells only one side of a complex story.
“The net loss of migrants from Michigan has stopped, but the size of the annual natural increase is slowing rapidly thanks to the decline in fertility and the aging of the population,” Farley told Watchdog.org in an email.
The job base in Michigan remains rather stagnant because the state depends heavily on the manufacturing sector, which continues to boost its productivity, allowing companies to do more with fewer employees, he said.