Illinois still losing taxpayers to outmigration, new study shows

SPRINGFIELD, Ill (WTVO) — A new report claims Illinois continues to lose taxpayers and tax revenue to outmigration, while Florida benefits from population growth.

According to the report from the National Taxpayers Union Foundation, “California, New York, Illinois, and other states with high tax burdens continue to hemorrhage taxpayers and tax revenue, while Florida remains the undeniable winner from movement of taxpayers and their dollars from state to state.”

While the report concedes that high taxes are not the only reason people move to another state, it does say that data shows a pattern where taxpayers move from states with higher tax burdens toward states with lower taxes.

The report also says other states have responded to the trends by making their tax codes more competitive, but some states are working to make up for lost revenue by assigning more tax obligations to visitors.

A recent study showed that Illinois residents pay 10% of their annual income to state and local taxes.

The study found that property taxes counted as the largest portion of residents’ tax burden, at 3.81%, with state excise and sales tax at 3.78%.

A 2023 poll found that 51% of Illinois residents cited high taxes as the primary reason they’d consider leaving the state.

According to the Illinois Policy Institute, the state lost population for nine consecutive years, a trend reversed by an influx of noncitizen migrants in 2023 to 2024, 4.6 times higher than the 2010-2020 average.

However, migrants accounted for 10.7% of the state’s population loss to other states, suggesting that Illinois’s economic conditions may have also affected that trend.

As Illinois’ Congress works to finalize a new budget, Gov. JB Pritzker has vowed to veto any proposal that is “broad-based and would have a negative impact on working families,” but his budget proposal put forward a $100 million targeted tax on electronic gambling and casino table games.

State Senators and House Representatives have proposed joint resolutions to raise over $6 billion in new revenue, citing that the state’s current tax system is unfair to low-income residents.