#44 Illinois

Read More

The overall freedom ranking is a combination of personal and economic freedoms.

From 2012

State Facts

Net Migration Rate (?) -7.5 % 
Personal Income Growth (?) 1.05 %
How does the freedom ranking relate to these?


Illinois used to be a relatively decent state for economic freedom, but it has recently lost economic vitality, even as its well-publicized woes with employee retirement spending have driven taxes and debt higher. However, in the past four years, the state posted one of the most dramatic improvements in personal freedom we have ever seen.

Illinois’s state-level taxes have risen from 4.9 percent of personal income in FY 2009, slightly lower than the national average, to a projected 6.0 percent of personal income in FY 2015, with the biggest increase coming in 2011–12. Local taxes have also crept up over time and are now well above the national average, at 5.2 percent of income. However, residents have good choice among local jurisdictions, with almost two effective competing governments per 100 square miles. Government subsidies are much higher than the national average, at 0.15 percent of income, but they have come down a bit over time. Government debt has risen from 17.1 percent of income in FY 2000 to 24.3 percent today, well above the national average. Government employment remains significantly below the national average, at 11.4 percent of private employment.

Illinois has historically done well on land-use and insurance freedom, but much less well on civil liability, labor policy, and occupational freedom. We show few changes on regula-tory policy over the past decade, other than liberalization of telecommunications and cable. The state has consistently had a minimum wage, the bindingness of which varies by year, depending on inflation and when it was last updated. Renewable portfolio standards have been gradually tightened, raising electricity rates. Direct auto sales for Tesla were legalized in 2013–14. As of 2013, the state remains on the list of “judicial hellholes.”

Illinois was long our bête noire on personal freedom, but that has dramatically changed with federal court decisions that have overturned some extreme restrictions on gun rights, the legalization of same-sex marriage and medical marijuana, and the new availability of driver’s licenses without Social Security numbers (especially important for illegal immigrants). It is now comfortably in the middle of the pack. Illinois’s new concealed-carry law, begrudgingly enacted by the legislature, is technically shall-issue but remains one of the country’s strictest. The state still has local “assault weapon” and large-capacity magazine bans, waiting periods for gun purchases, background checks for private sales, permitting of buyers for some weapons, local registration of some firearms, mandatory locking devices, and so on. Alcohol freedom is better than average, with no state role in distribution and wine and spirits available in grocery stores. However, there are local blue laws. Formerly one of the most restrictive states for cannabis, Illinois now has a medical marijuana law. Despite a handheld cell phone ban, travel freedom grew in 2013–14 because of the driver’s license bill. Legal gambling is expansive. Educational freedom is reasonably good, as virtually no restrictions are placed on homeschools or private schools, and there is a small tax deduction law for parents’ educational expenses. Smoking bans are comprehensive, and cigarette taxes are high. Civil asset forfeiture is open to abuse. Drug arrest rates are still extremely high but have come down since 2006.

Policy Recommendations

  • Fiscal: Enact strict, ex post balanced budget requirements in the constitution in order to reduce state debt and improve the state’s poor credit rating.
  • Regulatory: Reform the civil liability system by capping punitive damages, setting the standard for punitive damages at “beyond a reasonable doubt,” and abolishing joint and several liability.
  • Personal: Continue to bring drug arrests down to reasonable levels. One way to do this would be to make possession of small amounts of cannabis and psychedelics a civil violation rather than a crime.
  • Map button

    Pick a New State

    Illinois Print Version