December 2nd, 2020
ITEF Comment Vol. XIII Issue 5
No “Revenue Crisis” As Total State Revenue Climbs $2.8 Billion In FY 2007
For the fifth year in a row, since ITEF began tracking state revenue, total Illinois state revenue is up from the previous year, according to data from the Illinois Comptroller’s website. In the past year-Fiscal Year 2007 starting July 1, 2006, and ending June 30, 2007—total tax revenue has increased $2.8 billion or 4.8% over FY2006. This is more than 2½ times the regional inflation rate of 1.8% for the same time period. Over the past five years-between FY2002 and FY2007-total revenue climbed $14 billion or 29.1%, nearly 2½ times the 12% regional inflation rate for the same time period.
Also, for the fifth year in a row, the politicians in Springfield are complaining about a phony tax revenue “crisis”. This past weekend, weeks after the usual state budget deadline, the state Senate Democrats were demanding a 67% raise in the state personal income tax. It should be noted that personal income tax revenue alone for FY2007 was $860 million or 9% higher than in FY2006-all without a rate increase. All state income taxes together sucked $1.4 billion more from taxpayers’ wallets into state revenue than they did in FY2006. FY2007 saw further increases in state sales tax revenue (up $314 million or 2.9%), state public utility tax revenue (up $56.9 million or 3.1%), and state cigarette tax revenue (up $13.6 million or 2.2%). Tax revenue funneled to the State of Illinois through the Federal Government also increased a hefty $773 million or 6.2% over FY2006 funds.
An independent study by the nonpartisan Tax Foundation proves that Illinois is a high-tax state. We actually have the fourteenth highest total tax burden (federal, state, and local) in the entire nation. Just under one third – 33.2% – of the average Illinoisan’s income is consumed by taxes.
For at least the fifth year in a row, Springfield’s spending spree continued in FY2007. The State payroll is up around $2.4 billion or 7.7%. Other beneficiaries of the pols’ overspending are the Illinois State Toll Highway Authority (up $346 million or 32.4% from FY2006), the Teachers’ Retirement System (up $435 million or 12.2%), the State Board of Education (up $408 million or 5.4%), and the State Police (up $17 million or 5.4%). Pork barrel spending is up: Illinois spent about $23,000 more of taxpayers’ money on salmon preservation in FY2007 (up 10.9% from FY2006) and another $23,000 more on snowmobile trails (up 29.4%). Last but not least, Illinois politicians bought more statues, patronage jobs, and votes with an extra $4 million (up 23.1%) from their favorite pork barrel fund-the so-called “Fund for Illinois’ Future.”
To review: in FY2007, total state revenue jumped $2.8 billion, faster than the inflation rate. Nearly all of the major state tax revenue categories were up significantly. Illinois does not have a “revenue crisis” when total state revenue increased more than twice the rate of inflation over the past five years.
Click here for the Fiscal year 2007 Revenue Analysis (14k pdf file)