Illinois is falling behind, and is not nearly competitive enough for the region. Tax rates in our surrounding states are luring businesses and population away. As of January 1, Wisconsin had a 5.42% combined state and average local sales tax rate. Kentucky had a 6.0% figure followed by IA at 6.8%, IN at 7.0%, and MO at 7.89%.
Illinois had a commanding Midwestern lead at 8.64%, and this is before the 32% tax hike passed in the most recent budget. Illinois is also surrounded by right to work states, where union membership has risen in recent years. In short, we are not competitive and despite our natural advantages are losing to our surrounding competition.
But this is unfortunately old news. The wrinkle that caught my eye this morning is the reason for maintaining the Indiana budget surplus. With $1.8 billion in reserves and a growing surplus the state is well positioned for a potential stock market correction. State Auditor Tera Klutz the state “won’t be reactive” in the event of a stock market crash because Indiana has “enough money in the bank to continue to provide those services” without immediately raising taxes on Hoosiers.
So, how likely is a market correction? I’m not a financial pundit and won’t pretend to know where the market is headed. Instead, I’d point you to the 2017 Regional Economic Forecast on Thursday, October 19 where panelist and co-host John P. Calamos Sr., Founder Chairman and Global Chief Investment Officer for Naperville-based Calamos Investments and panel will provide insights into the economy for our regional business community.
What I do know however, is that Illinois is not ready to weather a significant downturn if it were to occur. With strong competition for jobs and growth in our surrounding states and a ballooning debt obligation we need to be focused on reforms to grow our economy now.
We cannot wait any longer, winter is coming.