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Rockford’s economic growth was sluggish in 2016

The Gross Domestic Product of the Rockford metropolitan area grew 1.7 percent to $14.8 billion in 2016, according to stats released in September by the U.S. Bureau of Economic Analysis.

Rockford was one of 267 metro areas out of 382 that experienced an expanding economy. The GDP of 382 metropolitan areas though as a whole grew by 3.2 percent.

The GDP numbers in 2017 are unlikely to be much better since a large chunk of Rockford’s manufacturing economy is tied to the Fiat-Chrysler manufacturing plant and the plant was idle for much of the year as it was retooled to build the Jeep Cherokee.

Even though 2016’s growth was sluggish, there was a positive development in that Rockford’s economy continues to become more diverse. While manufacturing remains the area’s backbone, a look at the Rockford economy in 2001 and 2016 shows how other industries are growing, perhaps making the area less recession-prone in coming economic cycles. Another positive development is that Rockford’s dependence on government as a part of our economy finally declined from 2011 to 2016.


Source: Bureau of Economic Analysis


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Forbes: Top colleges of the Midwest 2017

This past week Forbes released its annual list of best colleges. There are a number of these types of rankings. So you don’t have waste precious time clicking through the photo gallery, we did it for you.

Here is Forbes top 25 Midwestern colleges:

  1. University of Chicago (16th overall)
  2. University of Notre Dame (26th overall)
  3. Northwestern University (26th overall)
  4. Washington University, St. Louis
  5. Carleton College, Northfield, Minn. (37th overall)
  6. University of Michigan
  7. Oberlin College, Oberlin, Ohio (53rd overall)
  8. Grinnell College, Grinnell, Iowa (57th overall)
  9. Kenyon College, Gambier, Ohio (63rd overall)
  10. University of Illinois
  11. University of Wisconsin
  12. Macalester College, Saint Paul, Minn. (100th overall)
  13. St. Olaf College, Northfield, Minn. (101st overall)
  14. Case Western Reserve University, Cleveland, Ohio
  15. Wheaton College (110th overall)
  16. Rose-Hulman Institute of Technology, Terre Haute, Ind.
  17. DePauw University, Greencastle, Ind. (117th overall)
  18. Denison University, Granville, Ohio (120th overall)
  19. Ohio State University (131st overall)
  20. Earlham College, Richmond, Ind. (131st overall)
  21. University of Minnesota
  22. Kalamazoo College, Kalamazoo, Mich. (141st overall)
  23. Purdue University, Westville, Ind. (143rd overall)
  24. Indiana University
  25. Hillsdale College, Hillsdale, Mich. (163rd overall)

Northern Illinois was ranked No. 599 overall. Rockford University was not ranked. Beloit (Wis.) was ranked in and came in at No. 209 overall.


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Can Rockford Promise lift future students out of college debt?

Rockford is in the bottom quartile of the United States when it comes to its college graduates struggling with education debt.

WalletHub.com studied loan documents of college graduates in 2,400 cities in the U.S. The credit and financial education site calculated the median student debt in those cities, the median earnings of college graduates and then calculated the debt to earnings ratio.

Rockford did not grade well. It is in the 75th percentile, or bottom quarter when it comes to students having to struggle to meet their obligations.

The median student loan debt in Rockford was $18,562, which ranks in the lower half, but WalletHub calculated the median earnings of Rockford college graduates to be just $43,016. That equated to a debt-to-earnings ratio of 43.15%.

The city where students have it best in terms of debt? That would be Gilroy, California, a city of about 50,000 in Santa Clara County. Gilroy is known as the “Garlic Capital of the World” because farmers there grow so much of it and celebrate it with the annual Gilroy Garlic Festival.

According to WalletHub, the median student loan debt in Gilroy was $12,297, but the median income of college graduates was $78,558. That calculated out to a debt-to-income ratio of 15.65%.

Rock River Valley cities

City

Median Student Debt

Median Earnings

Debt-to-Earnings Ratio

Machesney Park

$16,762

$56,607

29.61%

Janesville, Wis.

$15,461

$47,576

32.50%

Freeport

$16,945

$44,226

38.13%

Beloit, Wis.

$15,446

$35,423

43.60%

Loves Park

$21,922

$51,032

42.96%

Rockford

$18,562

$43,016

43.15%

·        No data for Belvidere or Rochelle

Cities Where Students Have MOST Debt-to-Earnings

City

Median Student Debt

Median Earnings

Debt-to-Earnings Ratio

Coors Bay, Oregon

$22,232

$31,635

70.28%

College Park, Ga.

$27,846

$39,489

70.51%

Loma Linda, Calif.

$35,885

$50,822

70.61%

Portsmouth, Ohio

$19,415

$27,270

71.19%

Orange City, Fla.

$19,357

$27,153

71.29%

Park Forest, Ill.

$27,349

$37,734

72.48%

Athens, Ga.

$22,471

$30,880

72.77%

Hamtramck, Mich.

$19,680

$26,902

73.15%

Bloomington, Ind.

$20,804

$26,788

77.66%

Ypsilanti, Mich.

$24,339

$28,558

85.23%

Cities Where Students Have LEAST Debt-to-Earnings

City

Median Student Debt

Median Earnings

Debt-to-Earnings Ratio

Gilroy, Calif.

$12,297

$78,558

15.65%

Winchester, Mass.

$14,344

$86,446

16.59%

Santa Paula, Calif.

$11,462

$67,835

16.90%

Elko, Nevada

$10,575

$61,569

17.18%

Sammamish, Wash.

$17,559

$98,032

17.91%

Greenburg, Ind.

$9,678

$50,466

19.18%

Lincoln, Calif.

$12,696

$64,738

19.61%

Lake Jackson, Texas

$13,523

$67,125

20.15%

Sunnyvale, Calif.

$16,967

$83,737

20.26%

San Juan, Texas

$9,374

$46,214

20.28%

On Saturday night, there is a fundraiser that can help a few Rockford Public Schools students – and someday hopefully all District 205 students – avoid that college loan anchor that is only worsening the income gap between upper-income graduates with the middle- and lower-class graduates.

Rockford Promise is holding its second “Raise The Roof” fundraiser. This one takes place on the stage of Rock Valley College’s Starlight Theatre. Last year, Rockford Promise raised enough money to fund 10 full scholarships for Rockford Public Schools graduates. The goal this year is to raise enough money to fund 20.

The goal is to eventually raise enough money to be able to fund the college education of all District 205 graduates. That will take years. For now, the program focuses on two of the poorest areas of Rockford, students from the Midtown and Ellis Heights neighborhoods.

Rockford Promise is part of a growing movement that was started by the Kalamazoo Promise in Michigan. In that city, several wealthy families came together and donated enough money that the program pays the college tuition of every Kalamazoo Public Schools graduate who attends a Michigan college or university.

There are now 220 Promise programs across the U.S., according to collegepromise.org. Most are similar to Rockford Promise in that they don’t have the deep-pocketed families to make large enough donations to fund all and instead have to do yearly fundraisers to continue to build the nest egg.

That’s what makes Saturday’s event so crucial. In 2016, Rockford Promise raised $45,000 at its Raise the Roof fundraiser. Tickets cost $100 per person and include games and prizes, live music, appetizers by Greenfire, a cash bar and silent auction items. Go to Rockfordpromise.org/take-action/ to learn more and buy tickets.

Of all the programs that Transform Rockford has identified that could Transform Rockford, Rockford Promise is among the most promising. It has the potential to flip what has long been identified as a negative into a positive. Business executives have for years said it was difficult to recruit companies to locate here because of poor test scores of Rockford Public Schools.

Whether you believe that criticism is fair or more the result of upper-income families choosing to move from Rockford or to send their children to private schools is irrelevant. Perception equals reality. But if Rockford Promise grows to the point where every District 205 graduate who chooses to go to college in Illinois has at least part of his or her college tuition covered then Rockford Public Schools becomes a recruiting tool.

 

 


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Home building index shows how far Rockford economy has to go

The Rockford-area economy still is far from a full recovery, according to a quarterly economic index created by the National Association of Homebuilders.

Boone and Winnebago counties ranked dead last out of 337 metropolitan area in its latest Leading Markets Index (LMI) quarterly report.

The NAHB calculates the index by comparing home building permits, home prices and employment rate with pre-Great Recession levels. At the end of the second quarter of 2017, employment locally was only 95 percent back to pre-recession levels, home prices were 97 percent back, but home building permits were only 8 percent of where they were at peak. Local home builders haven’t topped 100 new home permits in a year since 2007.

Out of the 337 metro areas, only Kankakee had a lower level of building permit activity. Rockford was one of just metro areas where none of the three indicators have recovered to pre-recession levels. The Midwest in general continues to struggle, six Midwestern metro areas are among the bottom ten.

Here’s a look at the top 10 and bottom 10 markets:

Leading Markets Index (LMI) – Top 10

Rank

Area

Overall

Permits

Prices

Employment

1.

Odessa, Texas

2.07

3.10

2.15

0.96

2.

Midland, Texas

2.03

2.69

2.40

1.02

3.

Walla Walla, Wash.

1.85

2.79

1.74

1.01

4.

Muscle Shoals, Ala.

1.81

3.08

1.36

0.99

5.

Ithaca, N.Y.

1.78

2.45

1.82

1.07

6.

Baton Rouge, La.

1.75

2.73

1.51

1.02

7.

Kingston, N.Y.

1.71

2.72

1.40

1.00

8.

Gadsden, Ala.

1.70

2.85

1.22

1.03

9.

Manhatten, Kan.

1.68

2.43

1.60

1.02

10.

Grand Forks, N.D.

1.66

1.99

1.97

1.02

Leading Markets Index (LMI) – Bottom 10

Rank

Area

Overall

Permits

Prices

Employment

328.

Bloomington, Ill.

0.78

0.26

1.12

0.94

329.

Albany, Ga.

0.77

0.25

1.07

0.99

330.

Jacksonville, Ala.

0.76

0.23

1.16

0.87

331.

Bay City, Mich.

0.75

0.37

0.91

0.98

332.

Flint, Mich.

0.75

0.33

0.92

1.00

333.

Atlantic City, N.J.

0.75

0.15

1.22

0.87

334.

Muncie, Ind.

0.75

0.20

1.05

0.98

335.

East Stroudsburg, Pa.

0.73

0.22

0.99

0.97

336.

Kankakee, Ill.

0.72

0.05

1.09

1.02

337.

Rockford, Ill.

0.67

0.08

0.97

0.95

 

 


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Light exhibit at Nicholas recognized as one of the best new museum exhibits

One of the newest attractions in the Rockford area was recognized along with exhibits at some of the biggest name museums in the country.

U.S.A. Today published a list of “The Best Museum Exhibits in the U.S. This Fall” and it includes exhibits at places such as New York City’s Museum of the Moving Image, the New Orleans Museum of the Art, Nevada Museum of Art and the International Museum of World War II in Massachusetts.

Included in this impressive list is British artist Bruce Munroe’s light exhibit at Nicholas Conservatory & Gardens, which took a year to create and uses 110,000 meters of colorful fiber optic cables.

 


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Eliminating home mortgage deduction would have little local effect

The home mortgage interest deduction is in peril if President Trump’s tax reform plan ever becomes law, but a look at which counties benefit the most from the deduction shows that if the deduction were eliminated or scaled back significantly it would have little effect in the Rockford area.

The Washington D.C.-based Tax Foundation looked at IRS data from 2014 to calculate the average mortgage deduction by county. Not surprisingly, the analysis showed that areas of vast wealth benefit disproportionately from the deduction because housing prices in those areas tend to be very high as well. The higher the cost of your mortgage, the larger deduction you can claim.

The 10 counties with the highest average deductions all come from the Washington D.C. area, California or Colorado. In Loudon County, Virginia, the average deduction in 2014 was $6,365 and 47 percent of filers claimed the exemption.

The Rockford area has long been one of the most affordable housing markets in the United States. The county seat of Loudon County, Virginia, is Leesburg and, according to the national real estate website Trulia.com, the median sale price of a home there is $485,000. Trulia calculates the median price of a home sold in Rockford at $103,000.

The vast difference in prices means a vast difference in average mortgage deductions. The Tax Foundation calculated the average deduction taken by someone in Winnebago County to be just $1,113. A look at northern Illinois and southern Wisconsin shows how much counties vary in benefitting from the deduction. Here are the average mortgage interest tax deductions in counties near Winnebago:

Not only are home values lower in Winnebago County than the nation as a whole, the home ownership percentage is high. According to Census estimates, 55.5 percent of housing units here are owner-occupied. In the U.S. as a whole, it’s 64 percent.

Critics of the deduction
point out that it only goes to middle-income and upper-income families and encourages people to buy homes larger than they need, contributing to urban sprawl. By 2019, this deduction is projected to cost the federal government more than $96 billion, more than all rental subsidy programs combined.

Real estate professionals are fighting hard to keep the deduction, believing that eliminating it would lower property values since the deduction is a selling point. The National Association of Realtors believes it could lower home values by as much as 10 percent.


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Education researchers give District 205 improving marks

The Rockford School District always is at the center of any conversation about Transforming Rockford.

The most recent Illinois State Board of Education data, which is from the 2015-2016, showed that just 19 percent of its students were ready for the next level, meaning they met or exceeded state standards on the annual PARCC tests. The state average for 2015-2016 was 34 percent.

A recent media report highlighted the fact that District 205 has become highly segregated again since eliminating a controlled-choice system in favor of school zones and laid much of the blame on the district’s poor test scores on school zones. Education Cities, a nonprofit network of 30 organizations in 25 cities working to increase the number of great schools in the United States, actually gives District 205 a slightly above average grade and believes the quality of education in the district has been steadily rising throughout the decade.

According to Education Cities (www.educationequalityindex.org), in the 2014-2015 school year, District 205 earned an EEI score of 52.9 with 50.0 being the benchmark for average. The EEI – Education Equality Index – score is a very convoluted ranking where Education Cities looked at the percent of students that score at or above state tests and weighs it with its percentage of students who qualify for free and reduced-priced lunches.

The vast majority of educational research shows the strongest correlation to test scores isn’t with race, instead it’s with income. A district comprised of mostly middle- and upper-class students is going to outperform a school of lower-income students regardless of race.

That’s why it’s not statistically valid to compare Rockford with any other school district in Boone, Winnebago, Ogle or even Stephenson County. Over the past 45 years, Rockford has become one of the poorest school districts in the state. According to Education Cities, in the state of Illinois only Chicago with 86 percent of its students qualifying for free and reduced-price lunches was higher than Rockford’s 84 percent.

Education Equality Index scores

District

EEI Score

FRL Pct.

Joliet, Ill.

65.7

83%

Chicago, Ill.

58.6

86%

Elgin, Ill.

52.9

74%

Rockford, Ill.

52.5

84%

Naperville, Ill.

52.4

17%

Springfield, Ill.

44.6

71%

Aurora, Ill.

41.0

61%

Peoria, Ill.

29.2

72%

·        * FRL means “free and reduced-priced lunch”

Seeing Rockford ranked above Naperville will be a shock for most people. According to ISBE numbers, 65 percent of Naperville’s students were at or above state standards. But only 17 percent of Naperville’s students qualified for free or reduced-price lunches. What Education Cities essentially is saying is that based upon the wealth of the students in Naperville, their PARCC scores should be higher.

Perhaps even more importantly, Rockford’s EEI scores have been steadily improving.

Five-year
EEI trend

District

2011

2012

2013

2014

2015

Joliet

49.1

51.7

49.5

44.6

65.7

Chicago

56.5

60.3

55.7

59.1

58.6

Elgin

43.3

45.1

46.6

44.8

52.9

Rockford

38.9

39.9

45.2

46.1

52.5

Naperville

34.3

30.3

31.9

38.3

52.4

Springfield

36.7

33.3

38.1

42.2

44.6

Aurora

31.5

35.5

35.3

36.6

41.0

Peoria

43.6

33.8

40.1

37.6

29.2

If you dig deeper into the data by looking at individual schools, at first glance, you see some correlations between race and scores. The top two schools in Rockford were Washington Gifted School and Marshall Middle School, which also had the highest percentage of white students at 68 and 58 percent respectively. Those also house the gifted programs in Rockford and have markedly fewer poor students. The FRL percentage of Washington was just 31 percent and 45 percent at Marshall. Those two schools ranked among the top 60 nationally in terms of EEI scores at 99.7 and 99.5.

The first zoned school on the list was Thompson Elementary with an EEI score of 78.3. Thompson was 50 percent white in 2014-2015, while African-American and students of two or more races made up 24 percent of the district.

Gregory Elementary was next with EEI score of 68.7. Its racial makeup was 40 percent Caucasian, 18 percent African-American, 15 percent Asian and 7 percent two or more races.

Swan Hillman though was fifth on the list with an EEI score of 64.1 and just 18 percent of its student-body was Caucasian and 55 percent was Hispanic.

Amongst the 23 schools that had an EEI score of above 50 – the benchmark – six had higher percentages of black students than white students: Barbour Two-Way Language Immersion Magnet, Galapagos Rockford Charter School, Kishwaukee Elementary, West Middle School, Legacy Academy and Conklin Elementary.

If you add in the students of two or more races, then the number of schools where African-American students outnumbered the white students jumps to 10: Swan Hillman, Nelson Elementary, RESA and Whitehead Elementary.

At the other end of the spectrum, of the 10 schools with the lowest EEI scores, five had the highest percentage of African-American students. Again though the scores tracked most strongly with income. Eight of the 10 schools on the bottom 10 had student populations where 98 or 99 percent of the students qualified for free or reduced-priced lunches.

This is a long-winded explanation that suggests it isn’t the racial makeup of the district or of particular schools that is holding down test scores, it’s the fact that so many middle- and upper-income families have left the district. Of course, this doesn’t mean District 205 doesn’t have its problems. Afterall, Education Cities is saying Rockford Public Schools is doing an average job of educating its students. Transform Rockford’s goal is to make the area one of the 25 best places to live in the country.

Looking at the Education Cities data, that means we should be striving to learn from cities such as Brownsville, Texas, which earned an EEI score of 79.9 even with a population where 94 percent of their students received free or reduced-priced lunches, or El Monte, California, which got a 65.8 EEI score even with a FRL percentage of 93 percent.


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New database reveals what’s in your water

The Environmental Working Group on July 26 released a public database on drinking water. The group analyzed more than 30 million state water records in a project inspired by the health crisis in Flint, Michigan. Click here to see what’s in your water.


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Quickly changing retail industry will force changes in Rockford-area thinking

A story in Time Magazine this month highlighted a trend that should be concerning city and county leaders across the country, “The Death and Life of the Shopping Mall.”

According to industry estimates quoted by Time, by 2022 one out of every four shopping malls in the United States will be out of business. We’ve already seen this trend hit the Rock River Valley. Winnebago County used to be home to malls by the name of Colonial Village, Machesney Park Mall and North Towne Mall to go with CherryVale Mall.

Colonial Village now is home to Heartland Community Church, Machesney Park Mall’s interior space long since closed and it has a couple of department stores left facing Illinois 251 and Practice Velocity on the other side. North Towne long ago was taken over by a series of discount stores.

The trend though is larger than shopping malls as more and more turn to online shopping where everything you need is a click away. More than 4,000 retail stores are being closed by major retailers in 2017 alone. These include such iconic names as Gymboree, Sears and Kmart, J.C. Penney, Macy’s and Payless ShoeSource.

This shift to online shopping is quickly going to hurt the budgets of municipalities who rely on sales tax revenue to help pay for police salaries and new roads. It appears to already be hitting the Rockford area. According to Illinois Department of Revenue figures, in fiscal year 2017 – July to June – the amount of sales tax revenue collected by retailers in Winnebago County and returned to the municipalities where the items were purchased declined from the year before.

In FY2017, Winnebago County’s 11 incorporated cities and villages and Winnebago County received $40.12 million back from the state in sales tax revenue compared with $40.22 million in FY 2016. It was just a slight decline but it marked the first year-over-year decline since 2010, the depths of the Great Recession when the area unemployment rate tumbled to 19 percent.

Winnebago County has had a remarkable turnover in leadership in 2017. Rockford, Winnebago County, Loves Park and Machesney Park have new leaders in place. Rockford, Loves Park and Machesney Park, as well as Cherry Valley, Roscoe and Rockton, have been able to count on continually rising sales tax revenues to fund city services. That may no longer be the case and instead leaders will have to contend with what to do with large retail spaces that no longer have new chains eager to move in.

We’ve seen some of this already. The former space that was home to K’s Merchandise for years on Mulford Road now is a ServiCom call center. But the old Menards building on Illinois 173 and Illinois 251 – the first major store to open on that shopping corridor – remains unfilled along with several large vacancies on East State Street. Rockford already is home to many buildings that were part of a boom gone bust. Any trip around older sections of Rockford will showcase the manufacturing buildings of the 1940s, 1950s and 1960s, that now either have been turned into storage or sit idle. Is the Big Box space next?

Sales Tax Revenue Trends
Fiscal Year

Rockford

Pct. Ch. County total

Pct. ch.

FY 2009

$22.69 million

$37.81 million

FY 2010

$20.79 million

-8.3% $35.07 million

-7.2%

FY 2011

$21.39 million

2.9% $36.26 million

3.4%

FY 2012

$22.15 million

3.5% $37.85 million

4.4%

FY 2013

$22.18 million

0.2% $38.07 million

0.5%

FY 2014

$22.40 million

1.0% $38.64 million

1.5%

FY 2015

$23.05 million

2.9% $40.11 million

3.8%

FY 2016

$23.38 million

1.4% $40.22 million

0.3%

FY 2017

$23.30 million

-0.3% $40.12 million

-0.2%

Source: Illinois Department of Revenue

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Rockford is a pretty good driving town

According to insurance giant Allstate, Rockford is one of the 50 best cities in the United States when it comes to avoiding collisions.

Rockford came in 49th on a list of the top 200 cities on Allstate’s annual America’s Best Drivers report. Rockford city drivers average 9.8 years between insurance claims.

Rockford’s 2017 ranking is actually a return to form. We’ve been in the top 200 every year Allstate has released this list and ranked as high as 25th in 2014 before dropping to No. 57 in 2016.

The top 10 cities in terms of avoiding collisions:

  1. Kansas City, Kansas
  2. Brownsville, Texas
  3. Madison, Wisconsin
  4. Huntsville, Alabama
  5. Cape Coral, Florida
  6. Boise, Idaho
  7. Laredo, Texas
  8. Port St. Lucie, Florida
  9. McAllen, Texas
  10. Olathe, Kansas