Some high-profile Republican governors sent warm greetings this week to businesses in Illinois -- “Come on over, the water’s fine,” they seemed to suggest -- in a brazen attempt to lure companies away from the Land of Lincoln.
Florida Gov. Rick Scott sent a letter Monday to an unspecified number of Illinois businesses, touting his state’s economic success, plans for educating tomorrow’s workforce and low tax burden. On the very same day, Texas Gov. Rick Perry showed up in Chicago to speak at a business conference and host a private reception with business leaders in his own attempt to poach firms from Illinois Gov. Pat Quinn.
"I hope he enjoys the competition," Perry told the Associated Press. "I'm certainly going to bring it."
Perry’s office preceded his visit with a broadcast and print advertising campaign with a very simple message for business owners in Illinois: “Get out while there’s still time.”
Scott was equally forward in his letter.
“Summer is coming and millions of people are booking their trips to Florida. This year, we’re asking you to make that plane reservation a ‘one way,’” he wrote. “While Florida’s economic formula is working, we know Illinois’ formula of more taxing and more spending ISN’T WORKING.” (Emphasis his.)
What makes Illinois such an easy target right now?
It could have something to do with the onslaught of bad economic news that the state has endured in recent months. Illinois shed 17,800 jobs in March, the second-highest rate in the nation, as Governing’s Mike Maciag reported last week. Illinois is just a few notches below Nevada for the highest unemployment rate in the United States, and the state has seen the biggest increase in its jobless rate over the last year. On top of those poor economic indicators, the state government’s checkbook isn’t faring too well either. Illinois’ pensions system is underfunded by nearly $100 billion, and its credit rating was downgraded by Standard and Poor’s last August.
Florida, meanwhile, added the most jobs of any state in March 2013: 32,700. Scott has also overseen one of the largest drops in unemployment in the last year, as the state’s jobless rate has fallen from 8.9 percent to 7.5 percent since March 2012. Texas has been more middling -- its unemployment rate is down 0.6 percent since the last year and it actually lost a few thousand jobs last month -- but Perry hasn’t been shy about cheerleading for his state; he famously took a tour through California earlier this year, again asking companies to leave a state with some questions about its government’s fiscal straits.
State-versus-state competition is hardly new, says Mark Muro at the Brookings Institution’s Metropolitan Policy Program, but Illinois has made itself a particularly easy target with its economic and public finance struggles. Perry and Scott aren’t the first: Republican governors from Indiana, New Jersey and Wisconsin have also tried to tempt companies away from Illinois.
The ultimate economic payoff of these public pitches is debatable. A recent study of California, cited by Brookings, concluded that no more than 2 percent of that state’s job growth in a given year could be attributed to active recruitment. Energy might be better spent trying to recruit firms from other countries, rather than other states, Muro suggests. But these ploys do have some obvious political benefits.
“It's an old and persistent model of economic development. The problem is the best data shows relocations contribute an infinitesimal portion of a state’s economic growth,” Muro says. “Poaching random firms is not going to move many dials, but you do look good. You look aggressive.”
That’s a perspective that Perry and Scott have embraced as they publicly court Illinois businesses. In Perry’s own words, there’s nothing more American than competition.
"This is a good red state blue state conversation we're having," Perry told the AP. "The idea that we shouldn't be competing against or with each other is really counter to our founding fathers."
State Employment Totals and Unemployment Rates:
|State||Monthly Change||February Nonfarm Employment||March Nonfarm Employment||3/2012 Jobless Rate||3/2013 Jobless Rate||Year-Over-Year Change|
NOTE: March figures are preliminary. Job totals and unemployment rates are seasonally-adjusted.
Source: U.S. Bureau of Labor Statistics