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Wisconsin vs. Illinois; which state has a better economy?

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ILLINOIS/WISCONSIN (WITI) -- Wisconsin Gov. Scott Walker and Illinois Gov. Pat Quinn have taken opposite paths toward improving the economy. So who's approach is working better?

2011 was a tough year for Illinois and Wisconsin. Both faced big deficits -- Wisconsin at $3.6 billion and Illinois at $13 billion.

It was a problem Gov. Walker and Gov. Quinn responded to in opposite ways. Wisconsin cut the budget and collective bargaining, while Illinois raised taxes by 67%.

Business leaders across the region watched closely.

Tim Roberts is the CEO of Catalyst Exhibits, a leading maker of exhibition displays like the ones seen at convention halls. At the time, he was thinking about a change of scenery for his company, but says Illinois' tax hike made his decision easy.

"When the 67% increase happened. Boom. Done," Roberts said.

Roberts moved his company and 113 jobs into a $2 million, 144,000 square foot facility in Pleasant Prairie, just across the border, about 50 miles northwest of Crystal Lake.

"Taxes are about the same, but where Illinois is trending and where Wisconsin is trending, there was a huge difference, and Wisconsin seems to be 'open for business,' much more so than Illinois," Roberts said.

There are other similar stories, like FatWallet.com, which brought 55 jobs over the border after the tax hike.

However, the border crossings worked both ways. Hotel Compete, a startup from Glendale, Wisconsin moved to Chicago, and a big company Wisconsin was wooing, Woodward Governor stayed in Illinois.

"Every aircraft has parts from Woodward Governor.  Governor Walker came from Wisconsin. He wanted to have them come to Wisconsin.  They took a look at what they have in llinois, all the engineers, the great transportation, the strong work ethic. They're staying in Illinois and growing. 1,000 new jobs," Gov. Quinn said.

Right now, Wisconsin lags behind Illinois in the relocation game. A review of corporate relocation wins by Site Selection Magazine found that as of 2012, 216 companies had relocated to Illinois, ranking 10th in the nation. Wisconsin had only 57 wins, ranking 24th.

"In the end, our growth is largely going to be organic and we're going to focus on getting Wisconsin businesses to grow, and along the way if we make the case to bring a few in from other places, so much the better," Gov. Walker said.

"We're a regional economy in the Midwest, whether it's water or any other issue. Chicago is the biggest city in the Midwest, and Illinois is the biggest state.  We've had tremendous investment by foreign companies and countries coming to our state because they see us as a strong economy. We're the 19th largest economy in the world -- Illinois," Gov. Quinn said.

The same magazine measures states' business successes by the number of new facilities and expansions.

Illinois ranks fifth in the nation, with 322 companies either expanding or building, while Wisconsin was the last in the Midwest with only 43.

Bureau of Labor Statistics numbers show that since the big budget decisions of 2011, Wisconsin has created 76,000 jobs and Illinois has created 165,800.

"We've created a lot more jobs. The job creation rate in Illinois is much better than our neighbor to the north in Wisconsin," Gov. Quinn said.

"Well, when you have twice the population, of course you're going to say that.  Our unemployment rate is 6.8%, there's is over 9%," Gov. Walker said.

As of July 2013, Illinois' unemployment rate was 9.2%, and Wisconsin's was 6.8%. The national average is 7.4%.

As Illinois has become the example of mismanaged fiscal policy, Gov. Walker is again making a pitch for businesses to come to the Badger State.

"We're saying, give us a look.  That's all we're asking.  We're not asking for someone to up and leave, but if you're close by, and you're going from a 20,000 to a 40,000 square foot facility,  why not look at Wisconsin?" Gov. Walker said.

As far as fiscal policy, some experts say Gov. Walker and Wisconsin are the clear winners.

The tax hike in Illinois didn't make a dent in the deficit, while Wisconsin's budget cuts have balanced the ledger and led to an income tax cut.

Illinois has the worst-funded pension system, while Wisconsin's is among the best.

"We'll see. Our bond rating is strong, or pension system is fully funded, or economy is on the right track, our unemployment rate has dropped consistently, our rankings continue to go up," Gov. Walker said.

Gov. Walker says he knows major Fortune 500 companies like McDonald's or Boeing aren't going to pick up and move from Illinois to Wisconsin, but he'll continue making the case to smaller companies like Catalyst.

"The difference between Wisconsin and Illinois -- it's not just the taxes.  Wisconsin -- take the personalities out of it -- whether you like Walker or not, they're focused on making a difference, working with different businesses, they're trying to get business to Wisconsin," Roberts said.

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