What’s wrong with the neighbors next door?

Indiana Gov. Mitch Daniels compared sharing a border with Illinois to living next door to the Simpsons in January.

Ten months later, the comparison still rings true. This weekend the Associated Press released an analysis of Illinois state documents.

The analysis found that as of early last month, Illinois had 116,000 unpaid bills worth more than $5 billion, most of which are months, if not years, overdue. This analysis did not include those bills yet to be approved, which, according to the AP, include $1.9 billion owed to Medicare providers.

Swimming in debt, the state has resorted to not paying bills in order to keep its head above water. Indeed, it builds its budget every year under the assumption that it will pay its bills late.

As an Illinois resident who has lived in Indiana for the past four years, reading stories like this about my home state is nothing new. This year alone, I’ve read stories coming from Illinois about tax increases, corruption trials and rising unemployment rates.

All of this makes me glad I decided to go to school in a state that has few of these same problems.

Sure, Indiana has had its troubles since the economy collapsed in 2008, but, overall, its situation is much better than the one just across the border. The state is sitting on a $1.2 billion budget surplus with projections that the surplus will be as high as $1.4 billion in June 2013. As a result, Mitch Daniels was able to award bonuses to about 90 percent of the state’s 28,069 employees this summer.

This is happening as Illinois struggles to meet even its most basic promises, such as state employee pensions. Illinois would do well to try to emulate some of the decisions made by elected officials here in Indiana.

Instead, they keep making the same asinine decisions that have the effect of hurting their residents and, as a result, the state’s overall economy.

Despite coming into office with a projected two-year budget deficit of $800 million, Daniels was able to reverse course and pull Indiana into a budget surplus without raising taxes on individuals and corporations.

Surprising to some, Daniels actually cut taxes during this time. In 2008 the state government capped residential property taxes at 1 percent, rental and agricultural property taxes at 2 percent and business property taxes at 3 percent, resulting in an average property tax cut of 30 percent.

In contrast, last summer Illinois increased its income tax rate by 2 percent and its corporate tax rate by 2.2 percent without any serious cuts to government. As a result, many important businesses, such as the CME Group, which operates the Mercantile Exchange and the Chicago Board of Trade — two of Chicago’s most important and iconic institutions — are thinking about leaving the state.

Illinois tax increases also hurt the state’s unemployment rate — perhaps because many small businesses are leaving. Last month, for the second month in a row, Illinois saw the largest increase in the number of unemployed in the entire nation.

The differences between Illinois and Indiana are staggering. On the one hand you have a state that understands incentives and how the economy operates, and as a result, has a stable fiscal situation.

And on the other hand you have a state that has no idea how businesses make decisions or how an economy operates, and as a result has seen its government dive deeper and deeper into debt as more residents and businesses leave for greener pastures.

The comparison between Illinois and Indiana is really a good one. It’s a comparison of two different economic ideologies: one of the tax-and-spend variety, the other of fiscal restraint.

It should be obvious which ideology has the better results. If only our decision makers in Washington, D.C., and Springfield, Ill., would recognize it.

­— nperrino@indiana.edu