Economic weakness and burdensome tax policies (a major cost of living) suppress home values, and spurs those with mobility to leave the state.
Illinois lost 80,700 millennial taxpayers and their dependents to other states, on net, over tax years 2011-2012 through 2014-2015, according to the most recent Internal Revenue Service data.
Illinois’ mass millennial departure will have far-reaching ramifications. These young people are entering their prime earning years and taking their productivity and earning power to other states.
Fewer young people are investing in Illinois and fewer companies will have a compelling reason to. This reduced demand to stay in Illinois could lead home values to recover more slowly. When compared with states that fare better with millennials, homeowner distress in Illinois may continue.
A key factor for the exodus appears to be a lack of jobs which translates to stagnant income. This makes it difficult to pay for the rising cost of living that occurs as a result of inflation.
Other cost drivers such as government worker retirement benefits create a crushing tax burden. At the same time, Illinois has some of the nation’s highest property taxes. This in turn drives down home value.
“Employment growth in Illinois has been weak for millennials over the recession era, which could be prompting them to seek more stable labor markets in other states. Fewer Illinoisans ages 25-34 were working in 2016 than were working before the Great Recession.” -This according to data from the Bureau of Labor Statistics
This is critical because 25-34 is the age group of many first-time home-buying millennials. The unemployment rate for millennials also increased 1 percentage point during this time period. The rate went from 6.4 percent in 2016 from 5.4 percent in 2015.
A Solution For Millennials
For all these fleeing Illinoisans, it’s probably worth utilizing the City Vs City cost of living calculator mobile app to see how their housing costs and all their unique financial circumstances would look in a different U.S. state – including the income taxes they can expect pay!
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