 And while both sides of the debate battle over the merits of
changing state tax codes, it becomes apparent that the same numbers
can be seen in two very different lights. It is fact that is not
often acknowledged, but one that is all too clear to the Commission
on Government Forecasting and Accountability, the economic
forecasting branch for the Illinois Legislature, which released a
report this week on Illinois' national standing among state tax
revenues.
"Whether it is better for a state to be ranked high or low in the
rankings is open to interpretation," said Eric Noggle, the report's
author. "Some believe that if a state is able to financially
survive on tax rates that create relatively low per-capita figures,
the better the financial situation for the people of that state.
Others, however, would view low per-capita figures as missed
opportunities for revenue growth, and subsequent program spending."
The figures from the bipartisan legislative commission paint a
picture of a state that hauls in a pretty penny but is forced to
stretch that money across a broad landscape.
Illinois is one of seven states in the nation with a flat income
tax, and its 3 percent rate is the lowest among those states.
Illinois collected more than $9 billion from the state's 13 million
residents -- about one-third of total revenue.
That figure is the seventh-highest in the country; but it can be
deceptive, which is why the commission analyzed the tax data on a
per-capita basis. Illinois dropped to 31st in terms of per-capita
taxation because its tax dollars cover the nation's fifth most
populous state. It also ranks lowest in the eight-state Midwest
region -- Illinois, Iowa, Wisconsin, Indiana, Kentucky, Missouri,
Ohio and Michigan -- in terms of state taxes as a percentage of
income, at just over 7 percent.
Ralph Martire, executive director of the nonpartisan Center for Tax
and Budget Accountability, said even then the numbers are
"distorted." He said the most appropriate figure to look at is total
tax collection as a percentage of income. Illinois is ranked 46th
according to the Federation of Tax Administrators. Martire believes
that is a disturbing figure.
"We're low-tax, we're low-spending, we have a $13 billion deficit
and we're not meeting existing needs," he said. "The way we look at
this whole problem is, the most responsible solution is a tax increase."
Other groups, especially those that oppose the governor's
borrow-heavy budget, are more concerned with debt levels than
revenue.
[to top of second column]
 |
The COGFA report looks at data from 2007 -- the latest available
statistics on local governments -- to analyze total debt outstanding.
Illinois ranks fifth with more than $116 billion in debt,
translating to about $9,000 per capita, for a ninth-place ranking.
Laurence Msall, president of the Civic Federation, said the state's
rank has increased only since 2007, given the state's borrowing in
2008 and 2009, along with $6 billion in unpaid bills.
"COGFA in providing this information is positive and is an important
contribution, but the report only goes so far," he said. "It does
not fully address the state's financial crisis."
The Civic Federation has come out against Quinn's budget because of
its reliance on borrowing and tax increases without matching
spending cuts.
The COGFA report also looks at each of Illinois' tax systems at the
local level, including the property and sales tax. Illinois' local
tax systems bring in the most money overall at more than $20
billion -- a little more than $5,000 per capita.
Much of that money is spent on schools. Illinois' local governments
cover nearly 56 percent of total school spending -- the highest rate in
the country. The state provides about one-third of funds -- one of the
lowest rates in the nation.
Those figures get to the heart of the debate over Quinn's proposed
tax increase, which he has dubbed the "1 percent education
surcharge." Quinn has said that he wants the state to increase its
role in education funding to lessen the burden on local governments.
Opponents to the tax increase say local funding allows local
management of school districts, improving education.
Illinois held steady in most all categories year-over-year, despite
massive drops in revenue. The state pulled in more than $29 billion in
2009, the sixth most in the nation -- a ranking Illinois has held for
years.
[Illinois
Statehouse News; By BILL McMORRIS] |
