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Investors Have Doubts About Illinois' Economy
A national study cast a negative light on the State of Illinois. A Morgan Stanley Wealth Management Investors Poll shows people who have a significant amount of investment income, are not feeling confident about plugging it into Illinois' economy.
The poll finds nearly 60 percent of Illinois investors fear the State's economy will be worse by the time the year is over. Experts say it's because of the uncertainty that comes from a nearly $100 billion dollar pension crisis, and the state's unpaid bills. The results of the poll, come the same day Texas Governor Rick Perry made a stop in Chicago, to try to lure businesses away from the Land of Lincoln.
A local business owner shared the sentiment of the poll results.
"Springfield has been really good to us, with the exception of the people at Second and Capital," Pease’s Owner Rob Flusher said.
Flesher says, in an Illinois economy where tax payers have little faith in their lawmakers to resolve major financial issues, selling non-essential items is more than a little difficult. In addition, discussions of major hikes in minimum wage will hurt his operation.
"With taxes constantly going up, and now talk of a big increase in minimum wage, those are the kind of things that can sink a place like us. We can't raise prices every time taxes go up or minimum wage goes up. We have to eat that and there's only so much of that we can eat," Flesher said.
While Pease's isn't going anywhere, Flesher worries that the same issues that hurt his business, will keep potential businesses who rely on minimum wage workers away. Dyanne Ferk, notes that the study wasn't all bad news. Chicago area investors had a more positive outlook for their city's development, and even for the national economy. The Associate Dean of University of Illinois-Springfield's College of Business Administration says generally, businesses and individuals just want to be able to plan for the future.
"Uncertainty always makes investors uncomfortable. It's not a perfect market, but not knowing what's going to happen in the future and having that great uncertainty about how the state will handle it's deficit issues, makes investors more nervous," Ferk said.
Governor Pat Quinn played off Governor Rick Perry's visit as a publicity stunt, but others see this as a wake-up call. Illinois State Treasurer Dan Rutherford released a statement in response to Perry’s visit to Illinois. While Rutherford said he believes Illinois has assets that could bring in businesses, he also thinks the state needs to focus on creating a more "business friendly" environment.
Currently, Illinois has the country's worst credit rating, and that's largely due to the fact that lawmakers cannot reform the state's pension system. Many lawmakers say that was their priority when they were elected earlier this year. It's now been 103 days since those lawmakers took office…and still no pension reform.