As the dust settles on the 2014 Midterm Elections it is a great opportunity to step back from all the political gamesmanship and spin doctoring and look at the condition of the State of Illinois, Chicago and Cook County. What really is the state of the State of Illinois? Why has Illinois and Chicago lagged behind other metropolitan areas in terms of job growth and population growth post the Great Recession? What is Governor-elect Bruce Rauner stepping into in January? And what does this have to do with Urban Design and Architecture?
Every year CNBC ranks America’s Top States for Business. For 2014 Illinois has an overall rank of 27 which is up from 2013’s rank of 37 but still below the 2011 high mark of 22. The ranking takes into consideration 56 measures and compiles the information into 10 general categories. For instance, Illinois ranks 40th for the cost of doing business and 3rd for infrastructure.
An article published October 9th, 2014 at ilnews.org, titled Illinois still seven years away from full jobs recovery, states there are still 300,000 fewer people in Illinois working today than in 2008. Illinois is the furthest state away from recovering from the recession of 2008. Approximately 500,000 people in Illinois lost jobs during the recession and only 200,000 of them have found work again. Illinois unemployment rate is 6.7% and Chicago’s stands at 7.4%, one and two points higher than the national rate.
The ASCE, American Society of Civil Engineers, has released its 2014 Report Card for Illinois Infrastructure and the result is a C-. This is up from a D+ in 2010. As you can see the grades are not good. Businesses are reluctant to locate, invest and grow in a region that has poor infrastructure. When getting goods and services to customers is cost prohibitive, business relocate to where it makes sense.
The State of Illinois has huge budget and pension deficits. On March 12, 2014 the Illinois State Comptroller released its annual report which shows Illinois has the largest yearly budget deficit of any State, and one of only two, Massachusetts is the other, that operates at a deficit. The budget deficit for 2014 is 47.8 billion. In addition, the State has a pension deficit for the 5 state-employee pension accounts it funds and maintains of $!00 billion. This is also the worst in the nation regarding under-funded pension liability. The total deficit for the State now stands at about $150 billion.
But take heart, Illinois is not alone, Chicago has its own problems to deal with regarding both its budget and pension obligations. The deficit of the 10 public pension funds run by Chicago and Cook County now stands at $37.3 billion. Chicago’s budget deficit is on track to shrink to just below $300 million; However there is a looming pension payment to the police and fire pensions in 2015 of $500 million. Chicago’s pension contributions are set to rise to $1 billion a year and continue at that rate on-going. Total deficit for Illinois and Chicago combined, $187.6 billion
So what does this have to do with UrbDeZine and Architecture?
In order for businesses to invest in Chicago — invest their time and money — they need several things. First, good infrastructure including transportation networks and utilities so that commerce can be created and then transported to its destination. Second, an educated and skilled labor pool to staff and meet the needs of growing businesses. Third, a business friendly and competitive taxing environment that fosters business growth. Without economic growth there are no rising wages and no positive population growth. People will eventually move to where the jobs are. Without economic growth, construction slows because there simply isn’t a need. It is a vicious cycle we have seen played out in places like Detroit and other Rust Belt towns that once thrived but now are struggling economically. When the urban population does not have access to good jobs, the urban environment does not work. The State, Chicago, and Cook County will have to raise taxes on people and corporations in order to fund its obligations, both budget and pension. Fees will go up, license renewals will increase, the other costs of doing business will rise, further stifling growth as business owners are reluctant to hire employees it cannot afford.
In the end, I am optimistic on Illinois, bullish for its chances to fix its deficits and foster economic growth. As an architect working in Chicago, birthplace of the high-rise and soon North America’s largest survey of contemporary architecture — the Chicago Architecture Biennial in October 2015 — I look forward to being part of the narrative that will see this state and city grow.
Photos by author, Joe Villanti