An economist for Moody’s Analytics put Illinois’ situation in perspective last week for a handful of House lawmakers. What economist Sarah Crane had to say ought to be heard by all representatives, by all senators mulling a compromise grand bargain on the state’s financial impasse, and by all Illinoisans.

Crane prepared a report on Illinois’ economic outlook for the state’s bipartisan Commission on Government Forecasting and Accountability. Crane noted Moody’s Analytics is separate from Moody’s Investors Services and then she delivered her plain-spoken testimony.

“Illinois is underperforming the United States and its neighbors,” she told the House Revenue and Finance Committee. That trend will continue, but the gap could narrow.

OPINION

Chicago is doing better than the rest of the state with more and better-quality jobs, but it still lags behind other big cities like Boston and New York.

An aging workforce is a problem nationwide, but it’s worse in Illinois, she said. Population loss in Illinois adds to our woes, is likely to continue and will suppress our housing market.

Illinois also suffers from an over-reliance on manufacturing, Crane said, and more specifically, from a lack of diversity in its manufacturing products.

“The biggest threats relate to the state’s budget problems and Illinois’ weak demographics,” Crane told lawmakers.

Crane’s comments help illuminate Caterpillar’s recent decision to move from its long-time Peoria home to Chicago, and underscore why most downstate residents voted overwhelmingly for President Donald Trump. They haven’t recovered much from the Great Recession.

Putting a finer point on our quagmire, Crane noted, “The state is very reliant on immigration to even maintain its population.” Ouch. Fewer people mean fewer residents to contribute to the economy and to tax revenue.

Crane agreed a lack of funding for nonprofits and other social service providers has added to job losses. Lack of funding for universities also threatens “attractiveness to potential students who might want to go to Illinois and remain in Illinois for their careers.”

Still, it wasn’t all hopeless. Crane made it clear that decisive moves on a budget, investment in infrastructure and the presence of a growing industry like Chicago tourism could help put the state back on a path to overall growth. Our tourism industry outperforms the country.

“You’d think no one would want to set foot inside Chicago, the way some of my colleagues talk,” Republican state Rep. David Harris of suburban Arlington Heights commented. Still, he said he was concerned the budget impasse wasn’t helping efforts to grow tourism.

Improvements at O’Hare International Airport and in roads and bridges also could help. A major infrastructure bill approved by Congress and Trump also could fuel demand for more Illinois-made construction equipment, Crane said. Illinois hasn’t raised its gas tax since 1991, she said, while a dozen others have raised theirs recently, funneling funds to their transportation networks.

Illinois has lower energy costs than its neighbors, but has higher labor costs and a higher local tax burden, Crane said.

Democratic state Rep. Elaine Nekritz noted Chicago’s economy was producing more and higher-paying jobs without changes demanded by GOP Gov. Bruce Rauner.

In a question-and-answer session with reporters last week, Rauner riffed himself about Illinois’ situation when someone asked why he was the only governor in state history who hasn’t been able to work out a contract with the state’s biggest public worker union.

“Why is our state the most bankrupt in America? Why do we have the biggest unfunded pension liability in America? Why do we have the highest-paid state employees in America? Why do we have some of the slowest job growth in America? …” he asked. “You know what? We need to change our system. It’s broken. It’s been broken by our elected officials for decades. We need to change.”

Harris, Nekritz and Rauner see things through a political prism. Crane does not. Her report is a non-partisan, no-nonsense assessment of the state’s economic outlook.

A budget compromise and investments in infrastructure, the social service sector and universities could start to shift Illinois’ fortunes.

“The uncertainty that comes with not knowing what a business’ future tax burden will be is what holds them back from expanding in the state or might encourage them to depart the state for an environment where they are more certain about what they will be paying,” Crane told lawmakers. “To just have a bit of certainty is what matters most to businesses and residents.”

Certainty. The Illinois Senate could courageously step toward it this week with votes on a compromise end to the budget stalemate now nearing its 21st month. Democrats and Republicans in the House could demand it next from House Speaker Michael Madigan. And Illinois could be on its way to improving.

Madeleine Doubek is publisher of Reboot Illinois.

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