ITEF Comment Vol. XIV Issue 3
Total State Revenues Climb For Sixth Year In A Row
CHICAGO- 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. Total tax revenue for the first 10 months of FY 2008 has increased $1.9 billion over the same period in FY 2007.
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 $770.4 million, or 9.2%, from the first ten months of FY2007—all without a rate increase. All state income taxes together sucked $899.3million more from taxpayers’ wallets, with corporate income taxes increasing $128.9 million, into state revenue than they did in the first 10 months of FY2007. FY2008 saw further increases in state sales tax revenue (up $276.2 million or 3.0%) and state public utility tax revenue (up $100.9 million or 6.6%). Oppressive state taxes caused Cigarette Taxes to decline 1.1%, down $5.5 million, and the high price of gasoline caused Motor Fuel Taxes to decline 2.4%, down $29.9 million.
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 2,535 state employees and government school employees that receive at least $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 $1.9 billion, or 3.76% over the same time period in FY 2007. The Midwest Consumer Price Index was 3.7% and the Midwest Core Consumer Price Index was 2.0%. State revenues were nearly double core inflation rates and slightly higher than the overall Midwest CPI. 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.