State Revenue

Released October 31, 2019

In his first year in office, Governor J. B. Pritzker signed a General Fund budget that the General Assembly passed into law — something it took his predecessor four years to accomplish.

Released October 21, 2019

The state of Illinois faces a significant structural deficit into the future. The report highlights the nature of the structural deficit and identifies two key causes: the state’s historically flawed  tax policy and the plan devised for repayment of Illinois’ pension debt. CTBA proposes both the adoption of the Fair Tax and a reamortization of the pension debt as described in the report titled: Addressing Illinois’ Pension Debt Crisis With Reamortization. Doing so would allow the State to ensure full funding for the Evidence Based Funding Formula while also improving the status of Illinois’ public employee pension system and eliminating the State’s structural deficit by 2042.

Released May 24, 2018

Fiscal Year (FY) 2019 marks the fourth General Fund Budget proposed by Governor Bruce Rauner. For the first two years of Governor Rauner’s administration, FY2016 and FY2017, the state went without a full General Fund Budget.

Released April 30, 2018

This report makes the case for a graduated rate state income tax in Illinois, and illustrates two possible rate structures that would accomplish each of three major objectives:

Released February 16, 2016

In both magnitude and meaning, state elected officials have no greater obligation than passing a General Fund budget into law. Consider magnitude first. Last fiscal year the General Fund budget provided for the expenditure of $35 billion. No question, that constitutes a sizeable expenditure of taxpayer money. It is also meaningful. While nearly $11 billion was targeted for Hard Costs like debt service and other legally mandated payments, over $24 billion was invested in current services across communities statewide. In fact, over 90 percent of FY2015 General Fund expenditures on services covered education (35 percent), healthcare (30 percent), human services (21 percent), and public safety (7 percent). To be clear, it is those services which provide for the basic health and well-being of the citizenry, and go to the very heart of why we elect a Governor and General Assembly in the first place.

By failing to pass a General Fund budget for FY2016, elected officials are basically punting the following difficult, but fundamental, responsibilities to: 

  • Make decisions about how to allocate scarce resources among the aforesaid four service priorities;
  • Identify which of, and by how much, those services will be cut, despite their high priority, if the state’s current woeful fiscal condition is not addressed; or
  • Raise the tax revenue needed to fund those core services to the amounts needed to satisfy demographically driven demand.

 

Released August 12, 2015

This Report provides a detailed analysis of both Governor Bruce Rauner’s and the General Assembly’s two very different proposals for the FY2016 General Fund budget. Both budget proposals would cut services and increase the state’s deficit due to the phase down of the temporary tax increases in the state’s personal and corporate income tax rates that became effective on January 1, 2015. Collectively, those income tax rate cuts will cause Illinois’ General Fund to lose $4.6 billion in recurring revenue over the course of the full fiscal year.

Released May 20, 2015

This report identifies why expanding the base of the state sales tax to include consumer services—like pet grooming, haircuts, country club membership, health clubs, and lawn care—would simultaneously help to stabilize revenue generation for the state’s fiscal system, while reforming tax policy to comport with the modern economy. 

As detailed in the report, Illinois is one of 45 states that impose a general sales tax. And while the state-only sales tax rate of 5 percent is below the national average state-only sales tax rate of 5.5 percent, Illinois’ sales tax rate is applied, in large part to the sale of goods (like clothing and furniture) and not services (like pet grooming, health clubs, lawn care, and haircuts). Illinois’ sales tax applies to few services. In fact, of the 45 states with a general sales tax, the average number of service industries taxed is 51; Illinois is an outlier, taxing only five consumer service industries. And that is why the state’s sales tax policy fails to jibe with the modern economy. Indeed, over 72 percent of the Illinois’ economy is derived from the sale of services, while just 17 percent stems from the sales of goods.

Expanding the Base of Illinois’ Sales Tax to Consumer Services Will Both Modernize State Tax Policy and Help Stabilize Revenue, estimates that $2.105 billion in additional revenue could be generated if Illinois’ sales tax base was expanded to include primarily consumer service industries, while excluding business-to-business transactions and professional services. This could go a long way toward addressing the state’s fiscal difficulties. The report also notes that by broadening the state’s sales tax base, Illinois may also be able to reduce the state’s sales tax rate if policy makers so choose. 

Released May 6, 2015

PowerPoint presented by Ralph Martire at the Senate Revenue Hearing.

Released October 1, 2013

The fiscal problems that have historically plagued Illinois are on full display in the FY2014 General Fund budget passedby the Illinois General Assembly. The state’s accumulated deficit remains significant, and in all likelihood will be at least $8 billion by the end of FY2014. Despite increases for some aspects of the General Fund budget, net spending on services will be $173 million less in FY2014 than in FY2013. Meanwhile, as spending on service delivery continues to decline, the annual cost of debt service continues to grow—specifically the debt owed to the state’s five public pension systems.

Released October 9, 2007

CTBA's written 2007 testimony on Senate Bill 572 to the House Mass Transit Committee

Pages