Weak Tax Collection Could Take Illinois’ Finances From Bad To Worse
With the dysfunction in Illinois politics, state government this year is projected to spend as much as $13 billion more than it will collect in taxes. And the situation could be getting worse.
The red flags are in a recent report of the General Assembly’s bi-partisan budget analysts. In the dry language of accountancy, they say “concern continues to grow.” Not growing is tax revenue.
Jim Mushinske says, among other problems, collections of sales taxes have been weak — essentially flat from July through November.
“Seventy percent of the economy is driven by the consumer, so anytime they take a pause, it’s a little bit of a concern," he said.
Mushinske says the weak performance is across the board --- felt in Illinois sales taxes, corporate taxes and individual income taxes.
Mushinske and his colleagues already had modest expectations for tax collection this year. With a rise of just two percent, their projections are about a billion dollars less than the governor’s more optimistic scenario.
But even if you pick the stingiest forecast, Illinois is still falling short.
"There's just not much out there right now we can hang our hat on and say that revenues will all of a sudden pick up and help us get out of the current budget pressure that we're under", said Mushinske.