Illinois has received some encouraging economic news lately, with recent drops in the state’s historically high unemployment rate and other signs that an improving national economy may finally be boosting the state’s outlook.
But, two new reports serve as reminders of how far the state still must go to get its financial house in order. A report from the legislature’s bi-partisan financial forecasting agency shows a drop in state tax revenues during the first two months of the new fiscal year and a report from Moody’s Investor Services highlights just how deeply in debt state and local pension systems are in Illinois, when compared to other states.
Also during the week, the nation’s largest organization of small businesses announced that all Republican members of the Illinois Senate had received the “Guardian of Small Business” award from the Illinois chapter of the National Federation of Small Business (NFIB). The honor is based on a review of key votes affecting small business and their employees.
Tax receipts fall
Two months into the state’s new fiscal year Illinois state government base revenues have dropped by $279 million from the previous year, according to the latest report from the legislature’s Commission on Government Forecasting and Accountability (CoGFA).
The drop in revenues was not unexpected, according to CoGFA, because revenues last fiscal year benefitted from a one-time boost related to the state’s tax Refund Fund.
Still, the state’s tax receipts for the beginning of the fiscal year could raise concerns. Although state sales taxes grew by $48 million the first months of the fiscal year, there were drops in other taxes.
Gross personal income taxes declined $14 million, corporate income taxes were down $17 million, public utility taxes were off by $16 million and corporate franchise taxes were down $1 million.
The lower income tax collections raise concerns that job gains are occurring in fields where employees are likely to earn less money.
At the same time, strong sales tax receipts show consumer spending is up. But, while rising sales tax receipts can indicate that consumers are spending more due to increased confidence in the economy, it can also be an indicator of higher prices due to inflation.
Moody’s report: Illinois has worst pension debt
If Illinoisans needed a reminder that the state’s public pension systems are deeply in debt, they got it when Moody’s Investor Services released a special report showing the state’s ratio of pension debt to revenues is far and away the worst in the nation.
The Moody’s study shows Illinois pension debt at 250% of its revenues. Only one other state comes remotely close: Connecticut with around 200 percent. The U.S. median is 51.2% and neighboring Wisconsin is at less than 25%, as are New York and Ohio.
The report was not a downgrade of Illinois’ credit rating, which remains at A3 from Moody’s – still the lowest rating of any state.
Illinois history conference set
The 16th annual conference on the History of Illinois is set to take place Sept. 25-26 at the Prairie Capitol Convention Center and the Abraham Lincoln Presidential Museum in Springfield. There will be sessions on nearly every point in Illinois’ history from prehistoric East St. Louis, to African-American activists and immigrants, to Abraham Lincoln’s speeches, and to the bustling streets of modern, downtown Chicago.