SPRINGFIELD — The leading candidates for Illinois governor have contrasting views on how to attract economic development to the state.

Incumbent Gov. JB Pritzker has leaned into his business background during his nearly eight years in office while supporting policies that incentivize companies to relocate to or expand their footprint in Illinois. Republican nominee Darren Bailey, on the other hand, favors a laissez-faire approach focusing on less state spending and lower tax rates.

As he prepares to face voters for a third time, Pritzker often touts the scaled-up incentive programs that have helped land some major projects. He also frequently cites balanced budgets and debt retirement during his tenure as the impetus for the dozen credit rating upgrades Illinois has received, and brags that the state’s gross domestic product climbed north of $1 trillion for the first time.

But Illinois still lags in key economic metrics, most notably trailing the country in real GDP growth. Illinois’ unemployment rate exceeds the national rate and that of all but one bordering state. And while there are signs the state has reversed population loss, it still registers among the slowest growth rates in the country. Its credit rating also remains the worst in the nation.

Pritzker’s opponents have criticized the governor and the supermajority Democrats who control the legislature for enacting policies they say have made the state unfriendly to business.

“He can talk about economic growth, but families and businesses are still moving out,” Bailey said in February following Pritzker’s budget address.

Pritzker acknowledges there’s more work to be done but believes they’re “only scratching the surface of what Illinois’ potential really is.”

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“We are growing at a faster rate than we were growing before, and it’s very important to me for us to catch up and beat the average in the United States,” Pritzker told CNI in an interview earlier this month. “But when I came into office, it was going the other direction.”

Illinois’ economy

If Illinois were its own country, it would have a top-20 economy comparable to Saudi Arabia and Switzerland. The nation’s sixth-largest state ranks fifth in real GDP and 12th in real GDP per capita, according to the latest statistics from the federal Bureau of Economic Analysis released in June.

It’s also diverse — no industry comprises more than 13% of its GDP.  Illinois benefits from Chicago being a hub for financial and professional services and tourism. And its central location makes it a transportation, logistics and distribution powerhouse. It is also home to world-class universities and research institutions, a large, skilled workforce and robust agricultural sector.

“We have the foundational elements to be one of the most powerful economic engines in the entire world, but potential is no guarantee,” Pritzker said at an Illinois Chamber of Commerce event in September. “Just having potential, we have to actualize it.”

Sluggish population growth, a relatively high tax burden and persistent fiscal challenges due to large pension obligations and a structural budget deficit, among other factors, stand as barriers to unlocking the state’s full economic potential, according to an economic forecast prepared for state lawmakers by Moody’s Analytics.

Per a Moody’s Analytics index, business costs in Illinois are about 1% higher than the national average, with labor costs on par with the rest of the country and energy costs about 5.5% lower than the national average. But the Wall Street firm found the state to have the fourth-worst tax burden.

Private-sector job growth has lagged, increasing just 0.3%, or about 17,000, between January 2019 and September 2026, according to the U.S. Bureau of Labor Statistics. This places Illinois 44th in growth rate.

Bailey has frequently blamed the state’s tax burden, especially property tax rates that rank among the highest in the nation. Bailey also highlighted the state’s corporate tax rate, effectively 9.5%, though he wouldn’t state what it should be reduced to at a recent campaign stop, saying “I don’t know those details.”

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He also called for rolling back the recent toll hike on the Illinois Tollway and reducing the state’s gas tax, which is among the highest in the nation.

“People need relief,” Bailey said. “We will be able to function for a few years until we get business back here, people back here and get our economy churning.”

Assessing ‘reputational damage’

Pritzker frequently points to the ship he inherited, noting that Illinois’ fiscal problems were decades in the making.

By the late 2000s, the state had racked up one of the largest unfunded pension liabilities in the country. And state budgets balanced via short-term borrowing and gimmicks were commonplace.

Between 2000 and 2018, the state’s GDP grew at about half the rate of the country as a whole and was 39th among U.S. states. Adding to the mess was a budget impasse between 2015 and 2017 that decimated the state’s already shaky finances.

The state’s unpaid bill backlog ballooned to $16.7 billion, and its credit rating dropped to just one notch above junk status.

“That reputational damage, unfortunately, was very real,” said Department of Commerce and Economic Opportunity Director Kristin Richards. “My time in government and my time observing government has allowed me to learn that you can break things really quickly, and it takes a while to repair it.”

While running for office, Pritzker focused on achieving what was once regarded as the bare minimum expectation: balancing the budget. He even took his case to Wall Street, telling bondholders in March 2019 that his priorities were “stabilizing our state government, growing the Illinois economy and protecting working families.”

Budget documents show the state’s operating budget in the black every year of the governor’s tenure besides pandemic-impacted 2020. The governor and lawmakers used post-pandemic surpluses to pay down the state’s bill backlog and build up the previously nonexistent rainy-day fund. Wall Street has responded to those efforts with a dozen credit rating upgrades, which lowers the state’s borrowing costs and signals that it’s a stable place to invest.

Illinois nonetheless maintains the highest unfunded pension liability and the worst credit rating of all 50 states.

Bailey, meanwhile, contends Pritzker is too focused on Wall Street elites and has let state spending grow too quickly.

“We need responsible government who’s going to operate Springfield just like I operate my farm: A business cutting where things need to be cut, putting people in charge of these agencies who are responsible and can actually get things done for the people,” Bailey said.

The state’s budget has grown from $40 billion in Pritzker’s first year to nearly $56 billion in the current fiscal year. It’s a 40% nominal increase, but when adjusted for inflation, it amounts to about 7%. Much of the spending has been earmarked for increasing pension payments, additional K-12 education funding and inflationary increases to health care costs for state employees and Medicaid recipients.

During his tenure, Pritzker and lawmakers have generally held the line on broad-based taxes, opting not to raise the state’s flat income tax rate or sales tax rate.

Pritzker in 2019 signed a doubling of the state’s motor fuel tax to fund infrastructure, and the fuel tax was indexed to grow each year with inflation. And last year, he signed legislation authorizing a toll hike on the Illinois Tollway as part of the public transportation funding and reform deal.

“This egregious toll hike is hurting all of Illinois because every one of those products that go across the tollway have now a 30% increase on the tolls,” Bailey said. “The people in Illinois are going to be paying for that.”

Pritzker in recent years has balanced his budgets with tax hikes around the edges, such as on tobacco products and sports betting. And corporations have seen various deductions and write-offs phased out.

Illinois’ property tax rates still rank among the highest in the nation. Though levied at the local level, state funding levels for schools and other services are a key factor in determining the final bill for homeowners and businesses.

Republicans have said those “tax-and-spend” policies make the state an unaffordable place to live and work.

Pritzker has said, however, that the state needs to balance its budget while still investing in key priorities like health and education.

“We’ve increased education funding across the state of Illinois,” Pritzker said in July. “I want to do more, and we’re not yet where we need to be.”

The role of grants and incentives

Pritzker’s answer for economic development has focused on beefing up the state’s tax credits and incentives to attract business, especially in targeted industries like electric vehicles and quantum computing.

It’s a vast difference from Bailey’s campaign, whose indicated he’d take a fine-toothed comb to state grants.

In 2021, Pritzker signed the Reimagining Energy and Vehicles in Illinois, or REV Act, which aims to attract businesses in the clean energy sector.

He also extended and modified the state’s flagship incentive program, Economic Development for a Growing Economy, or EDGE, to attract investment from quantum computing companies as well as making it easier for smaller companies to utilize.

Pritzker has also prioritized capital investments, earmarking $500 million to help develop a quantum computing campus on Chicago’s South Side, $300 million to prepare the sites of former state facilities for new use and $200 million in grants for site readiness. And billions have been invested in the state’s transportation infrastructure via Rebuild Illinois.

Lawmakers in 2023 also authorized a $400 million closing fund that the Pritzker administration can tap to secure large economic development deals when in stiff competition with other states.

This expanded toolbox has helped land some big fish.

In 2023, the state announced it reached an agreement with Chinese electric vehicle battery maker Gotion to build a new plant in Manteno. In 2024, Rivian announced that it would pause construction on a plant in Georgia and instead produce its R2 truck at its existing Normal facility. Both companies tapped into the closing fund and received REV tax credits.

Republicans have criticized the Gotion deal.

“Democrats delivered hundreds of millions of taxpayer dollars to companies with ties to the Chinese Communist Party while forcing Illinois businesses to pay more,” Senate Minority Leader John Curran, R-Downers Grove, said at the time.

The state has inked 30 REV agreements providing more than $1.2 billion in tax credits, according to state records. They could result in the creation of more than 5,700 new jobs and the retention of more than 8,800, according to DCEO.

Between 2019 and 2025, the state has inked nearly 200 EDGE agreements with lifetime credits estimated at more than $378 million. These could result in investments into the billions, the creation of more than 11,800 new jobs, and the retention of more than 11,900, according to DCEO.

A few weeks ago, EDGE recipient Hyundai Translead, a subsidiary of Hyundai that manufactures transportation equipment, announced they were expanding their planned investment in Will County, resulting in 3,750 new jobs, which Pritzker claimed to be the largest single announcement of manufacturing jobs in recent state history.

“It’s been important to me to change the trajectory of our state by attracting companies, attracting jobs, getting more investment in the state, giving us a toolbox to go after those businesses and make sure that we’re competitive,” Pritzker said. “Because I want to beat Texas, I want to beat South Carolina, I want to beat Michigan, and we weren’t doing that before I took office. We are now.”

But there have also been high-profile departures, companies like Boeing, Caterpillar and Citadel moving their headquarters out of state, which Bailey blames on the state’s tax and regulatory structure.

Beyond arming DCEO with new tax credits, Pritzker has reorganized the state agency to offer “white glove” service to prospective and existing companies looking to invest in Illinois. Along with Illinois EDC, the public-private business attraction arm that houses the state’s site selection database, they form what Pritzker officials call “Team Illinois.”

The next step in a third term, Pritzker says, would be codifying the somewhat ad hoc Illinois EDC as the state’s permanent economic development corporation.

“I’m on the phone at least several times a week talking to companies across the world about Illinois and why they should come here,” Pritzker said.

Bailey’s plan

Bailey has pledged to root out wasteful government spending, which he said would allow for a reduction in the size of the budget and tax cuts across the board.

“First and foremost, we’ve got to give people, the working families, relief,” Bailey said. “That comes at the gas pump, that comes when they pay their property tax, that comes when they pay their utility bill. Secondly, by doing some of that, that will attract other people. People want to live here in Illinois.”

The Xenia Republican has long expressed skepticism of incentives as a means of attracting and retaining businesses in the state, likening such deals to “corporate welfare.”

He’s argued during the campaign they’re “corrupt” and “bad economics,” though he did vote in 2022 to extend EDGE as part of a broader $1.8 billion election-year tax relief package. Bailey also voted to authorize the REV Act — though he voted against trailer legislation amending and expanding the program’s parameters.

“The sad reality is Pritzker treats Illinois taxpayers like a blank check, ready to pay for whatever project he fancies, forcing businesses and families to vote with their feet,” Bailey wrote in a WTTW candidate questionnaire.

One of the major pillars of Bailey’s plan is an Illinois version of Elon Musk’s federal Department of Government Efficiency to achieve savings and efficiencies to be led by running mate Aaron Del Mar.

DCEO, which runs the state’s tax credit and incentive programs and administers hundreds of grant programs, could be a top target of such an effort.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.