Flash Index Improvement Colored by Tax Hike Revenue
The Flash Index of the Illinois economy reached 96.1 in February --- the first time it's broken 96 in two years. The increase from January's reading of 95.9 is small --- just one fifth of a point. And its accuracy is a little shakier than usual, due to the state income tax increase.
The Flash Index is based on an analysis of Illinois state income and sales tax revenue. With revenue from the new state tax hike beginning to come in, Fred Giertz said he can't be certain how much of the higher revenues in February were from the tax hike, and how much was from higher economic activity. Still, the University of Illinois economist said he is pretty sure the Illinois economy showed some improvement.
"Less sure than in a typical month, but relatively sure, because the changes seem to correspond with what I predicted in terms of the change in the tax revenue," Giertz said. "So it seems to be reasonable. But again, there's a bigger chance for imprecision or error this month, compared to other months."
The Flash Index February reading of 96.1 does not yet show actual growth in the Illinois economy. To do that, the Index has to break 100.