ITEF Comment Vol. XIV Issue 1
Illinois State Revenue Analysis for Fiscal Year 2008 First 8 Months
SPRINGFIELD- For the sixth year in a row, since ITEF began tracking state revenue, total Illinois state revenue is significantly up from the previous year, according to data from the Illinois Comptroller’s website. So far this year-Fiscal Year 2008 starting July 1, 2007, and ending June 30, 2008—total tax revenue for the first 8 months has increased $1.5 billion over the first 8 months of FY2007.
Also, for the sixth year in a row, the politicians in Springfield are complaining about a phony tax revenue “crisis” to justify an income tax hike. State senate’s Democrats are planning a 67% increase in the state personal income tax with Senate Bill 2288. Personal income tax revenue so far in FY2008 is up $514 million, or 8.4%, from the first eight months of FY2007-all without a rate increase. All state income taxes together sucked $617.8 million more from taxpayers’ wallets, with corporate income taxes increasing $103.6 million, into state revenue than they did in the first 8 months of FY2007. FY2008 saw further increases in state sales tax revenue (up $227.3 million or 2.9%) and state public utility tax revenue (up $21.3 million or 1.8%). State cigarette tax revenue has decreased due to over-taxation (down $9.1 million or -2.1%).
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 – 32.7% – of the average Illinoisan’s income was consumed by taxes in 2007.
Springfield’s spending spree is continuing in FY2008. The state is budgeting $2.1 billion in FY2008 to cover state unfunded pension liabilities, $1.04 billion to the Teachers’ Retirement System alone. The best way to reduce the unfunded pension liability is to cap annual pension benefits at $50,000 and start new hires on private 401(k)s. There are over 4000 state employee and government school employees that receive over $100,000 per year in pension benefits, which is more than $2 million in lifetime benefits. These pension millionaires want to raise state income tax 67% and the corporate tax rate by 44%. Forcing taxpayers to pay billions for pension millionaires is immoral.
To review: so far in FY2008, total state revenue has jumped $1.5 billion. Nearly all of the major state tax revenue categories were up significantly. Any claim that Illinois has a “revenue crisis” or that we have to increase taxes and spending is ridiculous.
The ITEF analysis of the first 8 months of FY2008 Illinois state revenue may be found on our web site at www.ntui.org.