A Bill to End Illinois Property Taxes for Qualified Taxpayers

 

    

(The Center Square) – A bill filed at the Illinois Statehouse seeks to end property taxes for qualified taxpayers who live in and pay taxes on a residential home for at least 30 years. State Sen. Neil Anderson, R-Andalusia, said at some point, you have to own your own property.

“This country is founded upon freedom and property rights and at some point, you have to be able to own your property,” said Anderson. “This [bill] is a way to keep people in Illinois. If they own a home for 20 years and they have an option of moving to another state because they're tired of being taxed in Illinois, now all of a sudden, maybe [with the passage of this bill], they hang out another 10 years and now they don't have to pay property tax. That keeps them in the state and buying goods in the state and paying taxes in a different way.”

Illinois lost 32,826 residents from July 2022 to July 2023, according to the U.S. Census Bureau. That was the 10th consecutive year of population loss for the state.

Anderson suspects there will be opposition.

“I posted on Facebook about this and I've gotten a lot of feedback already. I tend to agree with the people that are in the comment section that are upset, that are saying, ‘well, you know, I've owned my house for 20 years because I paid for it in cash or I paid it off early, why shouldn't I be able to not pay property taxes?’ I get it,” said Anderson. “This [bill] is a starting point. If we can start somewhere and just get some kind of agreement that at some point, whether it's 10 years, 20 years, 30 years, 50 years, whatever the agreement on the time period is, if we can agree that at some point you've paid enough money and you actually own your property and you don't have to pay anything anymore, that's the starting point I want to get to here.”

Senate Bill 1862 is co-sponsored by state Sen. Dave Syverson, R-Cherry Valley.

The measure says "qualified taxpayers,” or individuals who for at least 30 continuous years as of Jan. 1 of the taxable year have occupied the same homestead property as a principal residence and domicile, will be exempt from paying property taxes.

According to Anderson, the bill doesn’t apply to properties that provide income. "Qualified homestead property" is defined in the bill as a single-family residence that is occupied as a principal residence and domicile by a qualified taxpayer.

Anderson said the bill was not just created to provide property tax relief for Illinoisans, who pay the highest property taxes in the nation. “If I lived in Texas or Tennessee where property taxes are super low, I would also introduce this legislation. You have to be able to say, ‘yes, I own this property, and they can't take it away from me,’” said Anderson.

Anderson doubts the legislation will pass. “I'm hoping that I can get some friends on the other side of the aisle that just agree with the concept of, ‘oh, my gosh you're right, we do have to be able to own our property at some point and not pay anything else.’ If the compromise is to go to 50 years, fine, I'll take that starting point,” said Anderson.

-NewsBreak

 

34% of Big, Profitable US Corporations Paid $0 in Federal Taxes in 1st Year of Trump Tax Law

 

A study released Friday [Jan. 13] by the Government Accountability Office found that more than a third of large, profitable corporations in the United States paid nothing in federal income taxes in 2018, the year the regressive Trump-GOP tax cuts took effect.

The GAO analysis, commissioned by Sen. Bernie Sanders (I-Vt.), showed that "average effective tax rates—the percentage of income paid after tax breaks—among profitable large corporations fell from 16% in 2014 to 9% in 2018."

According to the GAO, the share of profitable large corporations that owed $0 in federal income taxes after credits rose from around 22% in 2014 to 34% in 2018.

"Each year from 2014-2018, about half of large corporations and a quarter of profitable ones didn't owe federal taxes," the GAO noted. "For example, profitable corporations may not owe taxes due to prior years' losses."

The Tax Cuts and Jobs Act, which former President Donald Trump signed into law in December 2017, slashed the corporate tax rate from 35% to 21% and authorized a slew of other giveaways that made it easier for large businesses and wealthy individuals to lower their tax bills.

"While House Republicans want to make huge cuts to Social Security, Medicare, and Medicaid because of their 'serious concern' about the deficit, they voted to provide over a trillion dollars in tax breaks to large corporations and the top one percent," Sanders said in a statement Friday. "The situation has become so absurd that over a third of the largest and most profitable corporations in our country pay nothing in federal income taxes."

"Instead of cutting vital and popular programs like Social Security and Medicare," the senator added, "we need to repeal the Trump tax breaks for the rich and demand that the largest corporations in America finally start paying their fair share of taxes."

The GAO report doesn't name the specific companies that paid nothing in federal income taxes over the period the federal agency examined.

But separate analyses from outside organizations such as the Institute on Taxation and Economic Policy (ITEP) have identified such corporations. In 2021, ITEP found that at least 55 large U.S. corporations including Nike, FedEx, HP, and Kinder Morgan paid $0 in federal taxes on 2020 profits.

Steve Wamhoff, ITEP's federal policy director, wrote in a blog post on Friday that the GAO's new study confirms that "the Tax Cuts and Jobs Act was an unprecedented gift to corporations."'

"What the GAO report really demonstrates is that no matter how you measure the federal corporate income tax, not much of it has been paid in recent years, and the 2017 tax law has brought it to a new low," Wamhoff added. "The corporate minimum tax enacted as part of the Inflation Reduction Act will help address this problem. But as ITEP has explained, another key step for Congress is to implement the international corporate minimum tax that the Biden administration negotiated with other governments, and which is designed to address the offshore tax dodging that will otherwise be very difficult to resolve."

Sanders, for his part, pointed to 2021 legislation he introduced alongside Rep. Jan Schakowsky (D-Ill.) that "would have restored the pre-Trump corporate tax rate of 35% and comprehensively shut down offshore corporate tax avoidance."

"The provisions in this bill to close offshore loopholes alone could raise over $1 trillion in revenue from multinational companies over the next decade," Sanders' office noted in a press release Friday.

The legislation, formally titled the Corporate Tax Dodging Prevention Act, never received a vote in the Senate or the House. 

-Jake Johnson, Common Dreams

 

What President Biden and the Democratic Leadership Need to Address Before November 2022

 

I am afraid that today’s Democratic Party’s ill-advised priorities, political stupidity, schizophrenic identity, split coalition, endless procrastination and vulnerable candidacies will enable the Republican Party to take over the House and Senate in 2022 and the presidency in 2024.

What Biden and the democratic leadership need to address before it is too late, besides the antiquated filibuster and Freedom to Vote Act, is the lack of unity in the Democratic Party (e.g. centrists Manchin and Sinema); Republican propagation of lies; the ongoing Republican subversion of the next elections; the Republican attempt to rigged the voting system in their favor; the Republican focus on voting in partisan supervisors for elections; Republican legislator purges; Republican sabotage of the U.S. mail system; Republican attacks on Medicare;  partisan gerrymandering; the pandemic and the effects on healthcare; inadequate testing, vaccine, and N-95 mask distributions; the unvaccinated and their effects on hospitals and the economy; the global demand for thermal energy; the climate crisis; the education and teacher crisis; cyber security; immigration reform; corporate corruption; pharmaceutical greed; rising American religious fundamentalism; wage stagnation, inflation and reflation; China, Russia, North Korea...

What Biden and the democratic leadership also need to address is an expansion of Medicare to include dental, vision and hearing benefits; an expansion of the Child Tax Credit; an ample reduction of prescription drug prices; the availability of healthcare for those who cannot afford it; the income inequality and unfair taxation of the wealthy elite, and the Build Back Better legislation, to name just a few.  

-Glen Brown

Illinois needs a tax policy reform "to eliminate the structural deficit and create a rational repayment plan for the state’s pension debt" -Ralph Martire

 

“Consider everything that feeds the creation of public policy. There’re lobbyists, rallies, and marches. Don't forget charged rhetoric, clever spin, campaign contributions, and the ever-popular backroom deal. Then there’s ideological talking heads spewing misinformation to support their world view. Not to mention the constant pressure on legislators to garner some short-term political advantage to use in the next election cycle. The one, critical element missing from all this chaos: long-term planning.

“The political process simply does not reward politicians for proposing long-term solutions to complex problems — especially when those solutions come with short-term costs. Which explains why Illinois’ fiscal shortcomings have been so intractable. After all, resolving fiscal issues requires, among other things, an honest, public debate about tax policy, which is about as rare as a Super Bowl victory for the Bears.

“Rather than engage in such meaningful discourse, there’s been a pervasive — some would say perverse — tendency of most politicians (Governor Pritzker excepted) to eschew long-term, tax policy issues, to instead focus on getting through ‘fiscal year now.’ And that’s had some frighteningly bad consequences, not the least of which is the structural deficit in Illinois’ General Fund.

“A ‘structural deficit’ exists when, even during normal economies, and when no services are added or expanded, revenue growth doesn’t cover the cost of providing the same level of public services from one fiscal year into the next, adjusting solely for inflation. The structural deficit in Illinois’ General Fund has persisted for generations. Which is no Bueno, given that over 95 percent of all General Fund spending on services goes to the core areas of education, healthcare, social services, and public safety.

“Unfortunately, eliminating the structural deficit necessitates modernizing the tax system to generate adequate revenue growth — which is something the political process strongly discourages. So in lieu of that, Illinois decision makers have relied on the irresponsible practice of diverting revenue that should’ve funded pensions, to instead maintain spending on services despite structural deficit induced revenue shortfalls. Sure, that allowed Illinois to provide a level of public services it didn’t have the revenue to fund, but it also meant the state was hiding the structural deficit by borrowing billions of dollars from what should have been contributed into the pension systems.

“Then to make matters worse, in 1995 Illinois enacted the ‘pension ramp,’ which created a 50-year plan for repaying the immense pension debt it was incurring. The pension ramp, however, was a boondoggle. It established a repayment schedule that, for its first 15 years, continued the practice of underfunding the pensions by tens of billions. Thereafter it called for annual repayments of pension debt that were so unaffordable back-loaded, they increased annually by increments which exceed both inflation and general fund revenue growth.

“The deleterious impact of Illinois’ structural deficit is laid bare by the fiscal year 2022 general fund budget enacted last month. Consider that this budget increases spending on the four core services by $586 million — or just 0.13 percent — over fiscal year 2021 levels. Sure the bump is small, but things have to be trending up to cover any increase at all, right? Well, no, actually.

“As it turns out, that year-to-year increase in general fund spending is less than the $655 million in new revenue the state raised this year by eliminating some corporate tax breaks — and significantly less than the $3.8 billion in federal pandemic relief being utilized in fiscal year 2022. See, under President Biden’s American Rescue Plan Act, as well as other previous federal initiatives, Illinois is receiving $12 billion to cover general fund expenditures over fiscal years 2021 through 2024.

“Which is great, except this federal assistance is one-time revenue that’s not available after fiscal year 2024. So come fiscal year 2025, Illinois faces a huge fiscal cliff that threatens its capacity to maintain spending on any of the four core services, unless before that fateful day, decision makers finally enact the tax policy reforms needed to eliminate the structural deficit and create a rational repayment plan for the state’s pension debt” -Ralph Martire

Ralph Martire is executive director of the Center for Tax and Budget Accountability, a bipartisan fiscal policy think tank, and the Arthur Rubloff professor of public policy at Roosevelt University. rmartire@ctbaonline.org

The State Journal-Register

https://www.sj-r.com/story/opinion/columns/guest/2021/08/01/illinois-needs-tax-reform-cut-deficit-and-plan-repay-pension-debt/5411804001/

 

"Keeping the Economic Playing Field Level" -Heather Cox Richardson

 

“On Friday, as President Joe Biden signed ‘An Executive Order Promoting Competition in the American Economy,’ he echoed the language of his predecessors. ‘[C]ompetition keeps the economy moving and keeps it growing,’ he said. ‘Fair competition is why capitalism has been the world’s greatest force for prosperity and growth…. But what we’ve seen over the past few decades is less competition and more concentration that holds our economy back.’ “Biden listed how prescription drugs, hearing aids, internet service, and agricultural supplies are all overpriced in the U.S. because of a lack of competition (RFD TV, the nation’s rural channel, has a long-running ad complaining of the cost of hearing aids). He also noted that noncompete clauses make it hard for workers to change jobs, another issue straight out of the late nineteenth century, when southern states tried to keep prices low by prohibiting employers from hiring Black workers away from their current jobs. “‘I’m a proud capitalist,’ Biden said. ‘I know America can’t succeed unless American business succeeds…. But let me be very clear: Capitalism without competition isn’t capitalism; it’s exploitation. Without healthy competition, big players can change and charge whatever they want and treat you however they want…. ‘[W]e know we’ve got a problem—a major problem.  But we also have an incredible opportunity. We can bring back more competition to more of the country, helping entrepreneurs and small businesses get in the game, helping workers get a better deal, helping families save money every month. The good news is: We’ve done it before.’  “Biden reached into our history to reclaim our long tradition of opposing economic consolidation. Calling out both Roosevelt presidents—Republican Theodore Roosevelt, who oversaw part of the Progressive Era, and Democrat Franklin Delano Roosevelt, who oversaw the New Deal—Biden celebrated their attempt to rein in the power of big business, first by focusing on the abuses of those businesses, and then by championing competition.  “Civil War era Republicans had organized around the idea that the American economy enjoyed what they called a ‘harmony of interest.’ By that, they meant that everyone had the same economic interests. People at the bottom of the economy, people who drew value out of the products of nature—trees, or fish, or grain—produced value through their hard work. They created more value than they could consume, and this value, in the form of capital, employed people on the next level of the economy: shoemakers, dry goods merchants, cabinetmakers, and so on. They, in turn, produced more than they could consume, and their excess supported a few industrialists and financiers at the top of the pyramid who, in their turn, employed those just starting out. In this vision, the economy was a web in which every person shared a harmony of interest. “But by the 1880s, this idea that all Americans shared the same economic interest had changed into the idea that protecting American businesses would be good for everyone. American businessmen had begun to consolidate their enterprises into trusts, bringing a number of corporations under the same umbrella. The trusts stifled competition and colluded to raise the prices paid by consumers. Their power and funding gave them increasing power over lawmakers. As wealth migrated upward and working Americans felt like they had less and less control over their lives, they began to wonder what had happened to the equality for which they had fought the Civil War.  “Labor leaders, newspapers, and Democratic lawmakers began to complain about the power of the wealthy in society and to claim the economic game was rigged, but their general critiques of the economy simply left them open to charges of being ‘socialists’ who wanted to overturn society. Congress in 1890 finally gave in and passed an antitrust act, but it was so toothless that only one senator in the staunchly pro-business Senate voted against it, and no one in the House of Representatives voted no.   “Then, around 1900, the so-called muckrakers hit their stride. Muckrakers were journalists who took on the political corruption and the concentration of wealth that plagued their era, but rather than making general moral statements, they did deep research into the workings of specific industries and political machines—Standard Oil, for example, and Minneapolis city government—and revealed the details behind the general outrage.  “Their stories built pressure to regulate the robber barons, as they were called by then, but Congress, dominated by business interests, had no interest. Instead, President Theodore Roosevelt and his successor, William Howard Taft, tended to rein in the trusts through the executive branch of the government, especially by legal action undertaken by the Department of Justice.  “On Friday, Biden promised to use the power of the executive branch to rein in corporations, much as Theodore Roosevelt did during his terms of office. But there was more to Biden’s statement than that. His emphasis on restoring competition is from the next historical phase of antitrust action. “In the 1912 election, political language turned away from the evils of trusts and toward the economic competition so central to American life. Both Republican Theodore Roosevelt and Democrat Woodrow Wilson centered their campaigns around the idea that big business was strangling competition. Wilson called for a ‘New Freedom’ that would get rid of the trusts once and for all and return the nation to a world of small enterprise and opportunity. Roosevelt scoffed at this idea. He talked of the ‘New Nationalism,’ in which a large government would restore competition by regulating big businesses. (He said that if you got rid of trusts and then looked away, they would immediately spring up again.) “While their solutions were different, both Roosevelt and Wilson had reframed the stratified economy not solely as a problem, but also as an opportunity. Trimming the sails of the corporations was not an attack on the liberty of industrialists, but rather a restoration of the competition that had, in the past, enabled the country’s economy to thrive. And, once elected, Wilson managed to get key items of that agenda passed through Congress.  “That positive emphasis on competition carried into the administration of the next Roosevelt president, FDR. Biden noted that FDR called for Congress to pass an economic bill of rights, including ‘the right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies.’ And indeed, the idea of restoring a level playing field for all businesses, rather than letting them succeed or fail based on the whims of economic wirepullers, persuaded businessmen who had previously opposed regulation to line up behind the establishment of our Securities and Exchange Act of 1934. “Americans have lost this tradition since 1980, Biden said, when we abandoned the ‘fundamental American idea that true capitalism depends on fair and open competition.’ Reframing business regulation as ‘laws to promote competition,’ he promised 72 specific actions to enforce antitrust laws, stop ‘abusive actions by monopolies,’ and end ‘bad mergers that lead to mass layoffs, higher prices, fewer options for workers and consumers alike.’ “For 40 years, the Republican Party has offered a vision of America as a land of hyper-individualism, in which any government intervention in the economy is seen as an attack on individual liberty because it hampers the accumulation of wealth. Biden’s speech on Friday reclaims a different theme in our history, that of government protecting individualism by keeping the economic playing field level” -Heather Cox Richardson. —- Notes: https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/07/09/remarks-by-president-biden-at-signing-of-an-executive-order-promoting-competition-in-the-american-economy/

 

Let's Talk about the Graduated Income Tax Amendment and Retirement Income Including Pensions by Fred Klonsky

 

OCTOBER 7, 2020 | FRED KLONSKY's Blog

 

Why would any retiree believe Ken Griffin’s lies? There’s much to be concerned about these days.

On my list is the news I’m hearing that the amendment to the Illinois constitution ending the flat tax and replacing it with a graduated progressive fair tax might not make the threshold to pass.

It needs 50% of all registered voters or 60% of those voting to pass. Some polls show it at 55% approval and voting has begun.

Word is that it is doing well in Chicago, but losing downstate. It appears that many retirees believe the ads, paid for with billionaire Ken Griffin’s $50 million dollars, that their retirement income and pensions are threatened by the amendment.

Why would Griffin give a rat’s behind about our retirement income and pensions?

I’ve been writing and fighting for public employee pensions for a dozen years at least. I receive a teacher pension. In all my years of pension activism, never have I seen Ken Griffin beside me.

Will the amendment tax retirement income and pensions?

No. Nothing in the amendment even mentions taxing retirement income. Public pensions cannot be taxed without taxing everybody’s retirement income. Nobody in the legislature has suggested doing that. The governor is opposed to it. The constitution doesn’t need an amendment to do it. The legislature can vote to tax retirement income any time they please.

It is a red herring.

Will the amendment open the constitution and remove the pension protection clause?

No. Nothing in the amendment impacts anything else in the constitution other than the mandated flat tax. The pension protection clause was upheld by the Illinois Supreme Court and it would remain the law of the state. No public pension can be diminished or impaired.

It is a red herring.

The sudden concern with retirement income by those like the Illinois Policy Institute, Republicans and Ken Griffin is laughable. They are the same people who have been calling for cuts to public pensions for years.

It is disheartening to find organizations I have respected such as the Illinois Retired Teachers Association taking no position on the amendment when the billions of dollars taxing the rich would go a long way to addressing the state’s pension liability.

It was disheartening to hear TRS board of trustee Doug Strand, who I supported when he ran for the retiree seat on the board, refusing to support the amendment and repeating the distortions and lies of Ken Griffin when Strand spoke to my local IRTA zoom meeting.

It appears that the anti-amendment forces got the jump on the groups supporting a yes vote by spending Griffin’s money early and framing the amendment as more taxes on the working and middle class.

Nothing could be further from the truth.

Yet time is short and we have to get the word out.

Vote yes.

SHARE THIS.

-Fred Klonsky

 

“Vote for fairness. Vote for a graduated income tax in Illinois on Nov. 3”

A new editorial in the Chicago Sun-Times—Pity the struggling billionaire who fears a graduated income tax for Illinois—explains how the Fair Tax will help set things right in Illinois and calls out wealthy opponents for “promoting a falsehood” to protect their own bottom line and the special deal they get under our current tax system.

“An extra dollar in the pocket of a multi-millionaire—or, in the case of Griffin, a multi-billionaire—doesn’t matter as much as the same dollar in the pocket of a working-class person,” the editorial board wrote.

Our current tax system in Illinois is unfair because it taxes those millionaires and billionaires at the same rate as nurses, janitors and social workers. As the editorial concludes, “Vote for fairness. Vote for a graduated income tax in Illinois on Nov. 3.”

Here are the key points of the Sept. 9 Chicago Sun-Times Editorial:

• Now Griffin is making another investment, recently giving $20 million to a business group that aims to defeat Gov. J.B. Pritzker’s graduated income-tax proposal come Nov. 3.

• We say investment, rather than contribution, because if Griffin succeeds his personal bottom line will benefit tremendously.

• Griffin followed up his investment in the Coalition to Stop the Proposed Tax Hike Amendment — which undoubtedly will plaster the airwaves with ads against Pritzker’s proposal — with a Chicago Tribune op-ed last week promoting the falsehood that the governor is engineering “a graduated tax scheme engineered to extract the greatest amount of money possible from Illinois taxpayers.” But Griffin is not being honest about Pritzker’s proposal, nor is he devoid of self-interest.

• Progressive taxation isn’t an outlier. It’s the norm.

• Illinois was a moderate tax state at the time Griffin helped elevate Bruce Rauner into the governor’s mansion with millions of dollars in contributions. Rauner happened to have millions himself, too.

• Rauner then effectively held state government hostage for two years while trying to further lower state income tax rates that already had dropped from 5% to 3.75%. Members of Rauner’s own Republican Party broke with him, but Griffin didn’t. He rewarded Rauner with millions more in campaign contributions to seek re-election.

• Thankfully, Pritzker beat Rauner. But Rauner’s four years in office left our state in a world of hurt just in time for COVID-19.

• We’ve said this before, and we’ll say it again: An extra dollar in the pocket of a multimillionaire — or, in the case of Griffin, a multi-billionaire — doesn’t matter as much as the same dollar in the pocket of a working-class person. Yet right now in Illinois, every dollar is taxed at the same rate no matter how rich or poor you are.

• To our thinking, nothing makes a better argument for voting to move our state to a graduated income tax.

• Pritzker says that, under his proposal, 97% of Illinoisans would pay the same or less in taxes, while 3% would pay more.

• Amid the pandemic and the recession, does anyone really question whether the state needs this? Does anyone really believe the state government can cut its way to breaking even? Not a chance.

• Where, then, should the money come from?

• Should it come from the gardener in Lake Forest, the farmers in Galena or the small business owners in Libertyville? Should it come from the 20-somethings in Illinois trying to stake out their fortunes just like Ken Griffin did some 30 years ago?

• Or should it come from the 3% of taxpayers fortunate enough to be able to pay their fair share at this challenging time? The answer is obvious.

• Vote for fairness. Vote for a graduated income tax in Illinois on Nov. 3.

Read the complete article here.

The aforementioned information is from AFSCME 31


Commentary:

The wealthiest people should pay tax rates commensurate with their incomes, but they do not in Illinois. The state’s flat tax preserves the fortunes of the wealthy at the expense and victimization of everyone else. This is immoral and unjust.

In Illinois, the wealthiest taxpayers do not pay as much of their incomes in taxes as the poorest and middle-income wage earners. “Since the rich are able to save a much larger share of their incomes than middle-income families – and since the poor [can] rarely save at all – [flat] taxes are inherently regressive” (The Institute on Taxation and Economic Policy, ITEP).

Illinois is among 10 states in the nation with the highest taxes paid by its poorest citizens at 13 percent (ITEP). According to United for a Fair Economy, “at the core of the continuing budget ‘crisis’ facing [Illinois] is the decades-old state tax structure, one that disproportionately impacts low-income people because, unlike the wealthy, [low-income people] are forced to spend a majority of their income purchasing basic needs that are subject to sales taxes.”

The State of Illinois needs a fair tax rate that is “efficient with minimal impact on the economic decisions that taxpayers have to make” (Center for Tax and Budget Accountability, CTBA), one that captures increased revenues in times of economic growth, one that maintains revenue collections during poor economic times, one that is simple and not liable to inconspicuous error, one that is transparent and builds trust with the state’s government officials (CTBA), and one that helps 99 percent of the state’s population. A fair tax rate is moral and just. 

-Glen Brown

Rauner’s Illinois "Budget Address Does Not Break New Ground" from Center for Tax and Budget Accountability

February 15, 2017 “Governor Bruce Rauner delivered his budget address to a joint session of the General Assembly today. The speech broke little new ground, and repeated some long debunked myths. CTBA is combing through the details of the proposed budget, and will be providing in depth analysis over the next few days and weeks. “One of the most glaring myths repeated by the Governor is that Illinois has the 5th largest state and local tax burden in the nation. This ranking comes from the Tax Foundation's report, ‘State-Local Tax Burden Rankings FY2012.’ “However, the Tax Foundation's ranking does NOT ISOLATE in-state only tax burden. Instead, it includes all state taxes paid by Illinois residents to all 50 states. Hence, it simply cannot be used to compare Illinois to other states. “If you look only at the taxes actually collected by governments in the state of Illinois, our state ranked 27th for combined state and local revenue as a percentage of income in 2014, according to a report by the Federation of Tax Administrators-slightly below the median state. If you account for the phase down of the temporary income tax increase that began in 2015, Illinois would rank 37th in total state and local tax burden-putting Illinois in the bottom third nationally, tied with Idaho and Texas. “The Governor also contended that government spending should be lower than economic growth. It's not at all clear where this comes from, or that it has any valid economic or policy basis. CTBA addressed this claim on our blog when the Governor made it during his State of the State address earlier in the year. As we wrote then: “‘According to the Bureau of Economic Analysis, Illinois' GDP grew by 1.8 percent in 2015. However, at the same time, Illinois cut all General Fund spending by 9.2 percent from FY2015 to FY2016. (Spending on General Fund current services-education, healthcare, human services, and public safety, as opposed to payments on things like debt-was cut by 18.3 percent.)’ “So the poor economic growth the Governor derides, is in fact occurring when the rate of change in state spending is already well below the rate of state GDP growth. The problem is not with the rate of government spending. The problem is that our revenue system is outdated and creates a permanent structural deficit. Until we address the revenue side of the fiscal ledger, Illinois will not be able to cut or grow its way out of the deficit. “Much of the Governor's address was focused on economic growth as the solution to the state's fiscal woes. The Governor repeatedly said that job growth was the key to his budget, but offered few concrete ideas for how to generate said growth. CTBA agrees that in the long run, a healthy growing economy is crucial to fiscal stability. However, in the short run the most important thing is to have sufficient revenue to pay for adequate levels of core public services like education, healthcare, social services, and public safety which in turn create an environment conducive to economic growth. “To the extent the Governor did address ideas for job growth, he implied that lower taxes lead to increased growth. However, the research shows there is no statistically meaningful correlation between tax policy and job growth. States like California and Minnesota have seen tremendous job growth after substantial income tax hikes, while Kansas is in economic disarray after massive tax cuts. “The Governor was very specific when he talked about revenue cuts or which revenues he will not increase, but was very vague about how he would increase revenue. CTBA is a proponent of broadening the sales tax base, but the Governor provided few details of how he might do this. “The Governor was similarly vague when talking about reforms to public pensions. Based on media reports, it appears the Governor is still looking to cut the pension benefits of current public employees, a solution that the Illinois Supreme Court has overruled in the past as unconstitutional. Illinois does not have time to spend on another unconstitutional pension initiative that will ultimately be struck down by the courts. “The Governor's demand for a permanent property tax freeze is not sound fiscal policy. Freezing the main revenue source for local governments and public education will cause severe strain in communities across the state. Indeed, such an initiative would make it virtually impossible for communities to maintain adequate levels of such basic services as police and fire protection. This is an especially questionable proposal now, given that recent state law imposed a significant increase in pension funding requirements that continues to grow over the next two decades. “CTBA applauds the tone of the Governor's budget address seeking solutions rather than further political fights. However, the Governor provided little in this speech that can be used by leaders in the General Assembly to craft a meaningful resolution to the ongoing budget impasse. “We'll be taking a closer look at the Governor's FY2018 budget proposal and providing a more detailed analysis. Visit our blog for the latest analysis and follow us on Twitter or like our Facebook page to get data-based analysis of the state's budget.