* There won’t be another back to school sales tax holiday in Illinois this year. Iowa is about to hold its 11th annual holiday on sales taxes for clothing and footwear. Missouri is also having a tax holiday soon. Time Magazine has more info…
At least 16 states are hosting tax-free shopping events in the near future, including 11 states waiving sales tax on many purchases this weekend: Alabama, Arkansas, Iowa, Louisiana, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and Virginia. Other states—Connecticut, Florida, Maryland, Massachusetts, Texas—hold their tax-free weekends later in August.
More details about each state are here.
* The Northwest Herald wonders if the lack of an election is the reason for no repeat performance in Illinois this year…
The governor has said nary a peep about it, because the Illinois General Assembly didn’t reauthorize the tax holiday. Frankly, we don’t recall the governor pushing very hard for a reauthorization, either.
What’s different in 2011?
The economy still isn’t very robust.
Families still are struggling to make ends meet, and back-to-school shopping remains “expensive and difficult,” to use Quinn’s words from last year.
Besides, the state has had a hefty chunk of new money coming in since January, after the Legislature approved and Quinn signed big increases in income tax rates for individuals and businesses.
So, you’d think it would have been even easier this year than last for the state to give back-to-school shoppers a temporary sales tax break.
The cynic might point out that last year was an election year, and this year isn’t.
But surely that wouldn’t be the reason the governor and Legislature forgot all about extending the sales tax holiday in 2011.
* And Sen. Toi Hutchinson didn’t completely dispute that angle during a talk with Phil Kadner…
State Sen. Toi Hutchinson (D-Olympia Fields), who was a sponsor of the original tax holiday bill, told me Wednesday that Illinois simply can’t afford such generosity this year.
“We have $8.7 billion in unpaid bills,” Hutchinson said. “We’ve made unprecedented cuts in the state budget that are very painful.
“As much as I would like to help families and schoolchildren in Illinois, this is simply something the state cannot afford to do this year.”
I noted that last year the state was not only drowning in red ink, but had yet to pass a 67 percent income tax hike. Still, the Legislature thought the sales tax holiday was a good idea.
“Sometimes you do things for political reasons that are not good public policy reasons,” Hutchinson said.
I give Hutchinson high marks for honesty. Most politicians wouldn’t have answered that question in such a direct manner.
“When they (legislative leaders) came to me last year and asked me to carry this bill, I thought it would be a good thing to do to help people who were struggling in this economy and had children in school,” Hutchinson said.
“I have since learned a lot more about the budget process, and as much as I would like to help people with children in school again this year, it just doesn’t make sense.”
* I’m probably excerpting too much from Kadner’s column, but he has more that’s of interest…
Susan Hofer, spokeswoman for the Illinois Department of Revenue, said the state estimates that consumers spent $323 million on school supplies during last year’s 10-day tax holiday, for a sales tax savings of $16 million.
That’s far short of the $60 million in savings some politicians were predicting when the bill waiving the 5 percent state share for sales tax for school supplies passed.
As for the business stimulus the legislation was supposed to create, Hutchinson said, “After studying some of the figures on tax holidays, I’m not sure people spend more. I just think it impacts when people spend instead of how much they spend.”
Gov. Pat Quinn originally predicted $40-60 million in savings.
* Meanwhile, the state is losing out on big federal bucks this fiscal year…
The end of the federal stimulus program and changes in Medicaid payments will cost Illinois more than $1 billion this fiscal year compared to last, says an analysis from a state economic-forecasting commission.
‘We knew this was coming,” said Jim Muschinske, revenue manager for the Illinois Commission on Government Forecasting and Accountability.
The commission’s July revenue update estimated the state would receive $4.530 billion in federal transfers for the fiscal year that ends June 20, 2012. The estimate compares to $5.386 billion received in the previous fiscal year.
Muschinske said a 60 percent federal reimbursement rate for state Medicaid costs returned to 50 percent after the economic-stimulus program expired. The state’s decision to stretch out payments to Medicaid providers in the current fiscal year also will reduce the amount eligible for federal reimbursement, he said.
* Governor’s office announces homebuyer down-payment assistance program
* Illinois notifies seniors eligible for free rides
* Yearly tab for Ald. Burke’s bodyguards nearly $600,000