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End-of-year checkup: Data released in late 2017 show population, education and economic trends in Midwest

by Tim Anderson ~ January 2018 ~ Stateline Midwest »
Region’s most populous state, Illinois, continues to lose residents
Though the population in most Midwestern states is growing, only North Dakota and South Dakota have outpaced national increases since the last U.S. census. Between 2010 and 2017, the number of people living in North Dakota has risen by 12.3 percent, the second-highest jump among the 50 states (behind only Texas). Nearly all of this growth, though, occurred during the first part of the decade; North Dakota’s population actually fell slightly between 2016 and 2017, U.S. Census Bureau data show. These fluctuations are likely the result of changes in the state’s oil industry. South Dakota’s population trends have been steadier, with annual upticks of about 1 percent over most of the last seven years. In contrast, Illinois is one of only three U.S. states that has lost residents during this decade. Its population has declined over each of the last four years.
Between 2016 and 2017, populations increased in nine of the 11 Midwestern states, though only gains in Minnesota (0.9 percent) and South Dakota (0.9 percent) outpaced the nation’s (0.7 percent). Domestic migration is a major contributor to the nation’s population shifts; factors ranging from the weather to economic opportunity impact the movement of people from one U.S. state or region to another.
Rise in graduation rates continues; achievement gaps persist
In late December, data from the National Center for Education Statistics showed that U.S. high school graduation rates had reached an all-time high, 84.1 percent for the 2015-16 school year.
According to Education Week, this marks the fifth straight year of record highs, though the exact cause is not known — ideas include more accountability and data-driven policymaking, a greater emphasis on early intervention, and a decrease in the use of high school exit exams.
Most Midwestern states eclipse this U.S. average, with Iowa ranking at the top of all states for graduation rates (91.3 percent). The new federal data, however, also show continuing gaps in achievement among different groups of students.
Unemployment rates falling, but region hurt by drop in farm earnings
Every state in the Midwest now has an unemployment rate under 5 percent, according to the last set of data released in 2017 by the U.S. Bureau of Labor Statistics. North Dakota, Nebraska and Iowa have among the lowest jobless rates in the nation.
A look at longer-term trends, too, shows how much the employment picture has changed since 2010, particularly in the Great Lakes region. At the beginning of this decade, Illinois, Indiana, Michigan and Ohio all had rates near or above 10 percent.
Another economic indicator, however, shows how a recent drop in farm earnings is affecting states that rely heavily on agricultural activity.
According to the U.S. Bureau of Economic Analysis, the Midwest is home to four of the five U.S. states with the lowest growth in personal income between the second and third quarters of 2017: South Dakota (50th), Nebraska (48th), Kansas (47th) and Iowa (46th).
‘Cautious’ budgets the result of slow growth, rising spending obligations
A 50-state review of budgets enacted for fiscal year 2018 shows “substantial caution” among policymakers, a reflection of “two consecutive years of sluggish revenue growth coupled with mounting spending demands.”
According to the National Association of State Budget Officers’ “The Fiscal Survey of States,” spending in state general funds will rise by 2.3 percent — the lowest rate of increase since the Great Recession. The median growth rate is even lower, 1.7 percent.
Compared to these national figures for FY 2018, most states in the Midwest (with the exception of Indiana and Ohio) are expecting a higher rate of spending growth. Illinois had been coming off two years of significant declines in state expenditures, the NASBO data show, but in 2017, the legislature raised the corporate and individual income tax. This will allow for a year-over-year increase in spending.
NASBO’s report also highlights information for fiscal years 2016 and 2017, a period in which year-over-year spending from state general funds fell in Illinois (both years), Nebraska (FY 2017), North Dakota (double-digit declines in both years) and Indiana (FY 2016).
Along with slow revenue growth, legislators have been constrained by rising costs in “less discretionary areas” such as pensions and health care. “States approved small net increases in most program areas for fiscal 2018,” the NASBO study found, “sending most additional general fund dollars to K-12 education.”
Budget makers also have made a concerted effort to replenish their rainy day funds and other reserves since the Great Recession. In FY 2018, five Midwestern states — Indiana, Iowa, Michigan, Nebraska and South Dakota — were expected to have higher total year-end balances (when measured as a percentage of total spending) than the U.S. median of 8.0 percent.