Senate Week In Review

September 12, 2016

[Sen. Kyle McCarter]

For months, these weekly columns detailed the economic and political challenges facing Illinois. I also included solutions – reforms and common sense perspectives – to address the challenges. I am an optimistic person. There is hope. We can reform government and revitalize our economy to create opportunity for everyone. Unfortunately, there appears to be no political will or agreement to move forward.

New reports indicate Illinois’ economy is not providing the opportunities our citizens deserve as job creation and personal income continue lagging behind national trends.

Illinois’ Economic Performance Lacking
A Chicago Tribune story, published August 23, 2016, details how Illinois continues to lag in job growth, gross domestic product (GDP) and personal income. According to the article, “Illinois’ economic performance remains lackluster,” our state’s unemployment rate is tenth-highest among the 50 states, at 5.8 percent. That’s one percent higher than the national average of 4.9 percent. Job growth trails the national average by nearly four and a half percent. Illinois ranks 39th for GDP; and average hourly earnings for private-sector employees in Illinois were up only 1.4 percent over the past year, while the national average is up 1.9 percent.

Illinois Workers Are Missing Out
The Illinois Policy Institute (IPI), a leading public policy think tank, recently reported on how Illinoisans are faring since the end of the so-called “Great Recession.”According to IPI, Illinois witnessed the worst personal income recovery among Midwest states and second-worst among all states. The Institute cites a study by the non-partisan Pew Charitable Trusts, which reported on inflation-adjusted personal income since the start of the recession: “According to the Pew study, personal income in Illinois has grown at an annualized rate of only 0.7 percent since the recession began in the fourth quarter of 2007. Only Nevada has fared worse…”

Meanwhile, the same Pew report shows nearly all of Illinois’ border states show personal income growth at twice Illinois’ annual growth rate, as follows:
Kentucky     1.7%
Indiana        1.6%
Iowa             1.5%
Wisconsin  1.4%
Missouri      1.2%
Illinois          0.7%

The think tank’s report also notes an additional burden on the individual income of Illinoisans: “Personal income is calculated before taxes are deducted. Since the recession began, Illinois taxes have gone up across the board, with hikes in income taxes, sales taxes and property taxes. Not only is personal income growing slower in Illinois than in other states, but the taxes taken out of personal income have also gone up faster in Illinois than in other states.”

Minorities in Illinois Are Hurting
A report by the Economic Policy Institute of Washington D.C. – released August 24, 2016 – indicates Illinois has the highest black unemployment rate in the country at 15 percent and the fourth-highest unemployment rate for Hispanics at 7.5 percent during the second quarter of 2016. According to the non-profit, non-partisan think tank, “Illinois has had the highest black unemployment rate for three consecutive quarters. Since the fourth quarter of 2015, the black unemployment rate in Illinois has risen 1.9 percentage points as unemployment has increased 0.7 percentage points statewide.” Statistics are cold. Behind the figures are real lives.

Stubbornness and Suffering
The status quo of failed policies is not working. From 2003 through 2014, the majority party imposed tax increases, new regulations and grew the size of government (in terms of spending) by nearly 50%. In the midst of their total control of Springfield came a recession Illinois’ economy can’t shake. After a new governor took office in 2015, the majority became the “Party of No” and built a wall against reforms that could counter a contracting state economy, fix a bloated bureaucracy, stem the tide of out-migration and revitalize Illinois by increasing opportunity and prosperity.

Change Policies, Change Prospects
We must change the economic environment in Illinois to revitalize our economy and provide new opportunities for job creation and business expansion. Illinois needs structural reforms to how it conducts public business and spends taxpayer dollars, and changes to taxation and regulation of the free market economy.

Too many roadblocks to success stand in the way of real recovery. Following the “Great Recession,” other states took action to overcome their roadblocks. They implemented business reforms that lowered the cost of doing business and increased job opportunities and higher wages. Their reforms benefitted both employers and employees. But I caution, we must not fall into the trap of trading needed reforms for a tax increase. Trading one good decision for one bad decision profits nobody.

On Notice: Illegal Gun Sellers and Buyers
During the week, Governor Rauner signed legislation into law, which I supported, targeting illegal firearms trafficking.

House Bill 6303 passed with nearly unanimous bipartisan support this spring. The law, which had the support of the Illinois State Rifle Association and the National Rifle Association, targets “straw purchasers” of firearms. These are people who buy firearms in other states, and then sell the weapons in Illinois illegally.

A conviction under the new law makes a violation a Class 1 felony for illegally selling the firearm and a Class X felony if the violator sells or traffics in both the firearm and ammunition. While it’s true that it’s already a violation of Illinois law to sell a firearm and ammunition to a prohibited person, such as a convicted felon, this new law increases penalties and puts criminals on notice. This is a responsible step that doesn’t overreach and respects our Second Amendment rights. The new law explicitly exempts FOID card holders. The new law takes effect immediately.

Muzzling the People
On Thursday, Aug. 25, the Illinois Supreme Court ruled against allowing Illinois voters to decide if they want to change the state’s legislative remap process. 600,000 Illinoisans signed a petition to put the Fair Map Amendment on the ballot so that the power to draw legislative district maps would reside with the people and not the politicians.

As a result of the ruling, politicians will remain in control of where they will run and who they will represent. Justice Robert Thomas wrote the dissenting opinion and said the ruling ‘muzzled’  the people. The voters should have had the opportunity to decide this important issue. As tough of a task as it will be, the General Assembly must take direct action and pass a redistricting process that removes partisan political influence.”

Notable Quotable
“One of the great mistakes is to judge policies and programs by their intentions rather than their results.”Dr. Milton Friedman, (1912 – 2006); University of Chicago; American economist and recipient of the 1976 Noel Prize for Economic Science.