JOBS

·        Illinois unemployment rate matches record low.  The 4.1% unemployment figure reported by the Illinois Department of Employment Security (IDES) matches the lowest number ever posted for this figure, a widely-cited index of economic health and activity in Illinois.  Preliminary data, which is subject to revision as more numbers come in, indicates that nonfarm payroll total employment increased in the Land of Lincoln by 2,800 jobs in September as opposed to August 2018.  The same figure, when counted on a year-to-year basis (September 2017 to September 2018) showed a net gain of more than 50,000 nonfarm payroll jobs. 

September 2018 job creation was especially strong in education, construction, and manufacturing.  The Illinois manufacturing economy created an estimated 2,300 net new jobs in September 2018 alone, and created 14,600 new factory jobs over the past 12 months.  It should be noted, however, that the Illinois manufacturing sector is not as dominant as it was in February 1999, the last time our State’s unemployment rate was 4.1%.  Illinois’ overall job universe has adjusted over the past two decades.  In line with overall worldwide trends towards automation, many Illinois jobs have moved from factories to offices and service-related employment opportunities.

Illinois’ September 2018 unemployment is slightly higher (0.4%) than the 3.7% national unemployment rate for the same month.  The nationwide trend is towards the 4.0% level that economists refer to as “full employment.”  

ECONOMIC GROWTH

·        Illinois Innovation Network expands to DeKalb County.  Northern Illinois University (NIU), already home to many centers of graduate education and research, has announced plans for a $23 million business-development incubator and innovation center.  NIU will construct the center to serve as a hub of the Illinois Innovation Network, the growing web of broadband-linked innovation centers being set up in locations throughout the state.  Much of the center’s construction cost will be funded by NIU, by gifts made to NIU, and by private investments made by venture capitalists. 

Looking towards new opportunities for economic growth, the General Assembly took steps to provide $500 million in Innovation Network startup seed money as part of the FY19 budget.  Creation of the Illinois Innovation Network, which is being governed as an affiliated partner of the University of Illinois, followed a series of studies by experts on the importance of face-to-face interactions as an essential element in the fostering of technological innovations and job creation.  California’s Silicon Valley is a classic example.  The Innovation Network plans to utilize modern fiber optics to enable a wide variety of contact opportunities, including high-speed video conferencing and terabyte data-transfer, between Innovation Network hubs.  The Innovation Network will encourage its affiliated professionals to concentrate on issues of food systems, water resources, and environmental change.  The Innovation Network has already announced decisions to place hubs in Chicago and in Springfield.   The NIU/DeKalb hub announcement was made on Tuesday, October 9.

BUDGET

·        CGFA releases State revenue numbers for September 2018.  The Commission on Budget Forecasting and Accountability (CGFA) is the nonpartisan budget-forecasting arm of the Illinois General Assembly.  Working with the Department of Revenue and other State revenue collectors, this office monitors the State’s cash flow and determines its balance with the State’s spending patterns and budgeted expenditures.   CGFA’s report on state revenues in September 2018 was published on Tuesday, October 2.     

In September 2018, Illinois continued to enjoy healthy revenue numbers, driven by almost 6.1 million non-farm payroll jobs maintained by Illinois employers in FY18.  Weekly employee paycheck earnings, on which state income taxes are paid, rose by 2.3% over the course of FY18.   September 2018 State personal income tax payments totaled more than $1.8 billion, up $218 million from September 2017.  This jump in September personal income tax receipts made up well more than half of the overall $240 million increase in general funds tax receipts and transfers-in during September 2018 as opposed to September 2017.

Corporate and sales tax receipts also increased significantly.  Other key revenue sources, led by cigarette taxes, liquor taxes, Lottery revenues, and riverboat receipts taxes, were flat-to-down, and there was a sharp drop in overall Federal aid for the month as compared to the year-earlier period.  September 2017 had seen a temporary spike in federal Medicaid reimbursements to Illinois, a cash-flow number that could not be replicated in September 2018.

TAXES

·        The Tax Foundation issues mixed rating for Illinois’ tax structure.  The Washington-based nonpartisan study institute monitors the tax laws of all 50 states, and issues comparative rankings based on what they find.  States are ranked not only on the financial burdens imposed by their tax laws but also by the administrative burden of filling out income-reporting forms and complying with each tax.  

The Tax Foundation’s overall 2019 State Business Tax Climate Index asserts that Illinois’ tax structure has major strengths and weaknesses.  Illinois’ Income Tax Act scored highly, with the Tax Foundation applying a formula that granted credits to the tax law’s flat tax rate and to our relatively simple income-reporting laws and rules.  Illinois’ income tax scored 13^th among the 50 states, parallel to other major Midwestern states such as Michigan (12^th) and Indiana (15^th).

However, the Tax Foundation did not see Illinois’ high property tax rates and complex Property Tax Code as healthy policy traits.  Illinois’ property tax rates and structure were scored only 45^th among the 50 states, far lower than the scores posted by states with constitutional caps on their property taxes such as Indiana (2^nd) and Colorado (12^th).     

JOBS

·        Illinois unemployment rate matches lowest on record.  The Illinois Department of Employment Security (IDES) announced Thursday that the unemployment rate fell to 4.1 percent in August and nonfarm payrolls decreased by -5,200 jobs over-the-month, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. The July job gain was revised down slightly from its initial report to show no growth. (+0 jobs versus +3,700 jobs). 

Job growth moderated in the June to August period posting average monthly gains of +4,000 jobs over this three-month period, less than the prior 3-month average monthly gain of +8,300 jobs between May and July 2018.

HURRICANE FLORENCE

· Illinois prepared to assist states impacted by Hurricane Florence.  Governor Bruce Rauner announced Thursday that Illinois is prepared to provide personnel and other support to states that may be impacted by Hurricane Florence. 

Ten Illinois Army National Guard soldiers and two helicopters have deployed to support relief efforts in North Carolina. The crews left from Peoria's 238th Aviation Battalion and Kankakee's 1st Battalion, 106th Aviation Regiment. They will provide support for up to 10 days. All costs associated with the deployment will be paid for by the Tar Heel state.