If only we could get out of our own way a little more, maybe the Illinois economy could grow faster.
People here are hungry for better financial times, but the forecast from the Federal Reserve is for more of the same gradual, slow growth.
Although 2014 might feel a bit better than past years, with moderate economic growth, it won’t resemble the kind of recovery that our country has seen in the wake of past recessions, just as the years before have not.
Slow growth was the theme of William A. Strauss’ economic outlook speech at the DeKalb County Farm Bureau on Thursday in Sycamore.
Nationally, not enough people are eager to accept the risk of borrowing money, and not enough businesses feel compelled to expand and hire in order to keep up with competitors. Our economy is the strongest in the world, and yet its growth has been underwhelming.
In Illinois, we face the added difficulty of uncertainty surrounding how we’re going to resolve the financial problems confronting our state.
After all, the deal struck in December, which could save as much as $160 billion over 30 years, has yet to be vetted by the court system. Even if it is found to be in compliance with the state constitution, it hardly will be enough to rescue us with the pension system underfunded by about $100 billion and expects to finish its fiscal year with almost $6 billion in unpaid bills.
And the income tax increase that is scheduled to roll back at the end of 2014 is not a solution, even if the full increase is retained.
“Even with the current, higher [tax] rates, the situation is going to get worse,” Strauss said.
The uncertainty surrounding our state’s financial future is the sort of thing that business leaders hate. It puts our state at a disadvantage relative to neighboring states.
Would you rather open or expand your operation in Illinois, where worker’s compensation costs are high and you could be facing future increases in fees and taxes? Or in Indiana, Iowa, or Missouri, where the situation is more stable and the future less uncertain?
Of course, Illinois has substantial advantages in infrastructure, population and other factors that its neighbors do not. But opening a new business or making a commitment to business expansion is a great enough risk in and of itself without including the possibility of future tax and fee increases.
Our state also has the region’s highest unemployment rate.
This will be a crucial year for Illinois, with spring primaries ahead of a fall election in which a new governor will be chosen.
Voters, workers, and employers should make their voices heard. We want more jobs in Illinois, and in order to do that, we will need our leaders to come up with more lasting solutions to our state’s problems.
Part of that may require cutting government services – but if we have already run up this level of debt, we haven’t been paying the full price for those services all along and can not afford them.
If the state can set its financial affairs in order, Illinois can make the most of what economic growth is expected in 2014.