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SPRINGFIELD — Illinois recovered more slowly from the recession last year than other Great Lakes States, and some business groups say the gap is likely to grow with the state’s recent increase in corporate tax rates.

By Benjamin Yount

SPRINGFIELD — Illinois recovered more slowly from the recession last year than other Great Lakes States, and some business groups say the gap is likely to grow with the state’s recent increase in corporate tax rates.

Figures from the U.S. Commerce Department show that the Gross Domestic Product in Illinois grew by 1.9 percent last year.

All the other Great Lakes states did better, with growth rates ranging from 2.1 percent in Ohio to 4.6 percent in Indiana.

But looking back further — to the start of the recession in 2007 — shows Illinois in the middle of the pack — with a decline of 1.7 percent over the four-year period.

Indiana and Wisconsin did marginally better, declining just 1.4 percent, but Ohio and Michigan did much worse, with GDP declines of 3.7 percent and 6.4 percent respectively since 2007.

The Commerce Department report attributes much of the growth last year to a resurgence in manufacturing in the Midwest — with that accounting for more than 2 percentage points of Indiana’s growth and over 1 percentage point of the growth in Michigan and Wisconsin.

On a per capita basis, Illinois still leads the Great Lakes states with a GDP per person of $45,400 — compared to $38,800 in Wisconsin, $37,800 in Indiana, $37,100 in Ohio and $34,800 in Michigan.

Katelyn Hancock, spokeswoman with the Indiana Economic Development Corp., which tries to bring businesses and jobs to the state, says Indiana has set out to be the Midwest’s leader.

Lawmakers “have made it a priority of distinguishing Indiana’s business climate from other Midwestern states,” said Hancock, “providing that welcome landscape for companies, large and small, to grow and hire more workers.”

Hancock said Indiana in the spring lowered its corporate income tax rate from 8.5 percent to 6.25 percent.

On the other hand, Illinois raised its corporate income tax from 4.8 percent to 7 percent.

Illinois’ higher tax rate received some blame for a drop in manufacturing.

But Jim Nelson, spokesman for the Illinois Manufacturers’ Association, which represents the thousands of manufacturers in the state, said Illinois has ignored the needs of manufacturing for years, and manufacturers have left.

“Indiana’s manufacturing sector represents 23 percent of their total state GDP,” said Nelson. “Illinois’ manufacturing sector used to be that large, but we’ve now contracted to just under 13 percent.”

Still, Sujit CanagaRetna, senior fiscal analyst for the Council of State Governments, says a quick comparison of one state to another can be misleading.

“Illinois ranks among the top five most complex, largest states in our country,” said CanagaRetna. “To make a quick comparison with a smaller state that doesn’t have the depth of complications (as Illinois) loses the overall goal.”

In another year the Commerce Department will release GDP figures for 2011 that may show what impact  the recent  tax rate changes have had on economic growth.

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