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Illinois’ sales tax revenue growth far higher than Indiana’s
Thursday, Jul 7, 2011 - Posted by Rich Miller * Well, here’s some good news for a change. The legislature’s Commission on Government Forecasting and Accountability is reporting that state sales tax receipts grew 8.3 percent during the past fiscal year. …Adding… Take out all the tax amnesty proceeds, and the result is 6 percent growth. However, it’s not a sure bet that none of those proceeds would’ve been realized, and June over June receipts grew 8.2 percent and May over May growth was 7.6 percent. Unlike the income tax, the General Assembly didn’t increase sales tax rates, so that’s a pretty darned good showing. Overall, state revenues grew $3.4 billion in the last fiscal year. Most of that was from the tax hikes, but some was from economic growth…
* By comparison, as of May, Indiana’s sales tax receipts were growing at just a 4.9 percent annual rate - meaning our revenue growth was almost 70 percent higher [22 percent sans all tax amnesty proceeds]. Illinois’ personal income tax receipts grew by 30.4 percent last fiscal year. But factor out the tax hike and Illinois income tax receipts also appear to be growing at a higher rate than Indiana’s 17.3 percent. While not the be-all, end-all analysis, it doesn’t appear that Illinois is falling behind its Hoosier neighbor just yet, despite the tax hike. * However…
COGFA’s original estimate was $1 billion higher than the House’s revenue estimate. If Muschinske is correct, that estimate will be cut in half, meaning less money to pay off old bills and patch any other budget holes. * Related…
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- Anon - Thursday, Jul 7, 11 @ 11:14 am:
A chunk of the sales tax growth is associated with the tax amnesty program. The state received approximately $165 million in sales tax amnesty revenue. Excluding the tax amnesty, sales tax growth was between 6.0%-6.5% depending upon how much of that money you believe would have been collected this year and in future years anyway.
Better than Indiana but not quite as high as the headline number indicates.
- Angry Chicagoan - Thursday, Jul 7, 11 @ 11:17 am:
Possibly the governor and the legislature need to be more thoughtful about how they handle spending cuts. Cut the stuff that doesn’t get a federal match and keep the stuff that does, that kind of thing. It would be interesting to analyze how realistic that stance even would be, considering what’s mandated and what isn’t and what cuts are humane and what cuts are not.
- wordslinger - Thursday, Jul 7, 11 @ 11:24 am:
Nothing wrong with a little good news.
I’m sure Mitch will be on Don and Roma explaining — unchallenged — that the sales tax numbers are due to Illinois businesses gassing up the U-Hauls and loading up on snacks for the move to Indiana.
- VanillaMan - Thursday, Jul 7, 11 @ 11:25 am:
We are beating Indiana! Hooray!
Watch out Kentucky!
Let’s spend the extra money on lottery tickets, I feel lucky!
- Redbird - Thursday, Jul 7, 11 @ 11:39 am:
Just out of curiosity, are these figures ever broken down further to show the impact by county?
For those that claim Illinois could get by or be better off without Chicago and Cook County, I am curious how much of this revenue is from tourism and associated sales taxes collected there.
- 47th Ward - Thursday, Jul 7, 11 @ 11:41 am:
If I’m remembering correctly, the tax amnesty was a Republican idea. Even though they claimed it would bring in closer to $200 million, I’ll still give them credit for a good idea.
For those of you keeping score, that’s one good idea in the last two years.
- Anon - Thursday, Jul 7, 11 @ 11:44 am:
Rich,
Sorry if I confused you before.
If you took out all the sales tax amnesty, the growth rate would have been 5.7%. The 6.0% to 6.5% range assumed various amounts of money would have been collected this year at each end of the range.
- Wensicia - Thursday, Jul 7, 11 @ 11:54 am:
So, will our governor be offering a sales tax holiday before school starts since we’re doing so well? Oh, wait, he’s not running for office this year.
- Cincinnatus - Thursday, Jul 7, 11 @ 12:08 pm:
since the sales tax revenues are being quoted as year-over-year, it is possible that Indiana had less of a downturn in receipts than Illinois over the measured period. While the increase is certainly bigger, and nice, it says nothing about the relative strength of the two states’ economies. And it certainly says nothing about the ability of either state to manage its finances.
- Excessively Rabid - Thursday, Jul 7, 11 @ 12:14 pm:
Wensicia, don’t remind me.
This (the existence of the revenue stream, not the uptick) is a good reminder why it is a good idea to have a sales tax and not rely solely on income taxes. Even those who successfully hide income have to buy things. I would be for a VAT but only if it eliminates sales and income taxes completely.
- Ghost of John Brown - Thursday, Jul 7, 11 @ 12:16 pm:
Tagging off of what Cincinnatus just said, if you look at the annual FY reports from the IL Dept. of Revenue, our state’s sales tax revenue took a deep dive from FY 2008 to FY 2009, and that stayed low in FY 2010, but we jumped as referenced in the main article in FY 2011.
Indiana’s sales tax revenue, according to their annual report, increased every year from FY 2003 to FY 2009, and then took a dip in FY 2010, but it was only 3,89%.
Our drop from FY08 to FY09 was 11.4% in Sales Tax Revenue.
- Cook County Commoner - Thursday, Jul 7, 11 @ 12:32 pm:
But does Indiana tax the same breadth of goods like Illinois? I understand Indiana has no sales tax on food. Seems this may be comparing apples to oranges without in depth comparison of what each state applies a sales tax to and at what rate.
But still great news. Maybe the revenue can be used to buy bullet proof vests for little children in Chcago’s South and West Sides.This could cause a decrease in collected coffin sales taxes. But maybe it could be made up in increased sales taxes on bigger and more powerful guns and ammo to penetrate the protection.
- Yellow Dog Democrat - Thursday, Jul 7, 11 @ 1:41 pm:
@47th Ward -
Credit for the tax amnesty program goes to Jack Franks.
- 47th Ward - Thursday, Jul 7, 11 @ 1:50 pm:
Like I said YDD, Franks’ bill was a Republican idea. Lol.
- Holdingontomywallet - Thursday, Jul 7, 11 @ 2:13 pm:
“For those of you keeping score, that’s one good idea in the last two years.”
Really? Maybe you can list all the great ideas from the democrats since they took complete control of the house, senate, and gov’s office in 2002. The republicans definitely have problems but the democrats aren’t exactly the “cat’s meow”.
- Anony - Thursday, Jul 7, 11 @ 3:44 pm:
Food prices rose quite a lot during this period, so more tax was collected on that dozen eggs you bought in IL. Iowa also doesn’t collect sales tax on food, so a lot of folk over on the west coast held over to hawkeye-land to shop. I am sure they all pay use tax, of course!
- Anony - Thursday, Jul 7, 11 @ 3:44 pm:
held-head
- Rich Miller - Thursday, Jul 7, 11 @ 4:01 pm:
===Food prices rose quite a lot during this period, so more tax was collected on that dozen eggs you bought in IL.===
Illinois has no state sales tax on food.
- wordslinger - Thursday, Jul 7, 11 @ 5:09 pm:
–Food prices rose quite a lot during this period, so more tax was collected on that dozen eggs you bought in IL.–
Where do you buy your eggs, cousin? Get in the ballgame.
- Anony - Thursday, Jul 7, 11 @ 5:47 pm:
The tax is 1%, btw. That’s for unprepared foods. Higher for certain prepared items, 6.75%. So as food prices rose, tax take did also.
- Rich Miller - Thursday, Jul 7, 11 @ 10:35 pm:
===The tax is 1%, btw. ===
That’s the local share. The state gets none of it.
- Yellow Dog Democrat - Friday, Jul 8, 11 @ 12:44 am:
@Rich -
Quinn haters would be better off arguing that new sales tax revenue is a “net increase in taxes”, that Quinn raised billions in sales taxes, and that the money should be returned to Illinois tax payers.
“Tired of high taxes? Thank Pat Quinn. Under Quinn, sales taxes have increased by nearly $2 billion a year.”
On a more serious note, I wonder if there was an appreciable increase in sales after the Stroger hike was rolled back.