High revenue growth in Illinois leaves lawmakers hungry for more
Progressive lawmakers in Illinois continually argue that the state has a revenue problem. They argue that, with a little more cash in the coffers, Illinois could solve its countless fiscal woes. This talking point is part of a larger sales pitch used to advocate for higher taxes in Illinois. But it’s not true. In fact,...
Progressive lawmakers in Illinois continually argue that the state has a revenue problem. They argue that, with a little more cash in the coffers, Illinois could solve its countless fiscal woes.
This talking point is part of a larger sales pitch used to advocate for higher taxes in Illinois.
But it’s not true.
In fact, Illinois has record high revenues and they continue to grow rapidly.
Just during the first quarter of the current fiscal year, general fund revenues are up 9.1 percent. According to the Commission on Government Forecasting and Accountability’s recent monthly briefing, base general fund revenues rose by $700 million in the first quarter of 2014 compared to the same period a year ago.
Illinois’ general revenue fund, or GRF, – the state’s primary operating budget – is funded through personal income taxes, corporate income taxes, sales taxes, federal sources and other taxes and fees. Here is the fiscal year 2014 GRF breakup:
The news on Illinois’ high revenue growth coincides with similar news across the United States. According therecent Census data, revenues from state and local individual income taxes, general sales and gross receipt taxes, motor fuel taxes, motor vehicle taxes and taxes on alcoholic beverages each hit all-time highs during the second quarter of this year.
As CNSNews reports, “That means that in no quarter of any year since the Census Bureau first started tracking state and local tax revenues in 1962 have Americans paid more in each of these categories of state and local taxes than they did in the quarter that ran from April through June of 2013.”
So what are state’s doing with these record inflows of cash?
At least nine states are pitching tax cuts. But the revenue growth in Illinois is only leaving politicians hungry for more. In fact, several special-interest groups and lawmakers in Illinois are pushing to increase taxes by swapping out the state’s constitutionally protected flat-rate income tax for a progressive income tax.
That progressive income tax hike would be on top of the record income tax increase that Illinois lawmakers passed just a few years ago.
Illinois’ political leaders said the goal of the 2011 tax hike was to pay down the state’s backlog of bills, stabilize the state’s pension crisis and strengthen its economy. Now, almost three years and more than $18 billion in new tax revenue later, lawmakers have failed to keep their promises. The state’s unpaid bills and pension debt have grown, and Illinois’ economy is among the worst in the nation.
Illinois lawmakers weren’t held accountable for wasting the money from the last tax hike. And now they’re asking Illinois taxpayers to pony up even more of their shrinking budgets to fund state government. But with the third-highest amount of public corruption convictions and the ninth-highest state and local tax burden per capita, the last thing Illinois needs is higher taxes.