Illinois could learn a lot from the Lone Star State

Scott Reeder
Illinois News Network
7/21/14

PORT ISABEL, TEXAS — I like to eat at blue-collar diners and cafés, particularly when I’m vacation.

It’s a chance to step beyond the homogenized national chains and experience a bit of local flavor.

And being a reporter, I like to chat up local folks to find out a bit about their community.

This past week, I took my family to Texas.

We enjoyed first-rate barbeque, homemade tortillas, jalapeno-infused dishes and fresh gulf shrimp.

We also had some terrific conversations with ordinary folks.

One day, I found myself standing in line at a restaurant with a Port Isabel, Texas, teacher. I asked the teacher, “So how is the economy around here?”

His response surprised me.

“It’s terrific,” he said. “These people who are moving here are creating all kinds of jobs. They are starting businesses.”

It was refreshing to hear someone talking about newcomers to a community as “job creators” rather than “job takers.”

Unlike Texas, Illinois has been experiencing an exodus.

And on average, those leaving Illinois earn $8,000 more per year than those who choose to move here, according to Internal Revenue Service data.

Folks who earn more money are more likely to start businesses, invest in the economy, pay more taxes and make more purchases.

In short, Illinois is becoming a poorer state because wealthy and middle class people are leaving and lower income folks are moving in to take their place.

Texas, on the other hand, is becoming wealthier. And it’s happening partially at Illinois’ expense.

Between 1995 and 2010, $2 billion in personal income shifted from the Land of Lincoln to the Lone Star State according to “How Money Walks” by Travis Brown.

In fact, National Review noted this year a greater percentage of people moving out of Illinois than any other state but Rhode Island.

By contrast, Texas’ population grew 5.2 percent between 2010 and 2013 — a higher percentage than any state but picayune North Dakota.

That doesn’t surprise me. After driving from Texarkana to Brownsville, I was wowed by the number of new factories and small businesses sprouting up all over the Lone Star state. Even in smaller communities we visited like Galveston, Brownsville or San Marcos there was plenty of new construction underway.

And in the bigger cities we visited like Dallas, Austin and San Antonio the economy appears to be on steroids.

Why is this happening?

After all, Texans aren’t any smarter or harder working than those in Rockford, Moline or Chicago.

The things that set Texas apart from the Land of Lincoln are low taxes, less labor conflict and few government regulations.

For example, for every hundred dollars in payroll, Texas employers pay 39 cents for workers’ compensation insurance while their Illinois counterparts pay $1.10.

And Texas is a “right to work” state.

For many industries whether a state allows compulsory unionism has become litmus tests for whether they will invest there.

And let’s not forget Texas doesn’t have an income tax.

In Illinois, we are expected to forfeit 5 percent of our income to Springfield just for the privilege of living here while in Texas not a cent is taken out of your paycheck by state government.

This has attracted many entrepreneurs to invest there.

In fact, according to the Kauffman Foundation, the rate of entrepreneurship in Texas was 65 percent greater than Illinois in 2013.

My family enjoyed its visit to Texas. We enjoyed dining along the river in San Antonio, playing on the beaches on South Padre Island and watching dolphins in the Gulf of Mexico.

But Texas isn’t home. Illinois is.

We love this state and we want to see it succeed.

Illinois will never have the Gulf of Mexico. Texas will never have a river as mighty as the Mississippi.

But we can learn from each other.

And when it comes to economics, Texas has a lot to teach us.

I hope the politicians in Springfield are listening.

Scott Reeder is a veteran statehouse reporter and a journalist with Illinois News Network, a project of the Illinois Policy Institute. He can be reached at sreeder@illinoispolicy.org. Readers can subscribe to his free political newsletter by going to ILNEWS.ORG or follow his work on Twitter @scottreeder.