* This Wall Street Journal op-ed is making the rounds…
High earners, it turns out, have especially volatile incomes—their earnings fell by more than twice as much as the rest of the population’s during the recession. […]
New York, New Jersey, Connecticut and Illinois—states that are the most heavily reliant on the taxes of the wealthy—are now among those with the biggest budget holes. A large population of rich residents was a blessing during the boom, showering states with billions in tax revenue. But it became a curse as their incomes collapsed with financial markets. […]
In New York before the recession, the top 1% of earners, who made more than $580,000 a year, paid 41% of the state’s income taxes in 2007, up from 25% in 1994, according to state tax data. The top 1% of taxpayers paid 40% or more of state income taxes in New Jersey and Connecticut. In Illinois, which has a flat income-tax rate of 5%, the top 15% paid more than half the state’s income taxes.
For everybody else, the WSJ piece uses top 1 percent. For Illinois, it’s the top 15 percent. Why? Because Illinois is among 25 states where the richest one percent account for 20-30 percent of personal income tax receipts. In other words, we’re about average. So, why include us? You’d have to ask the Wall Street Journal.
Also, all five of the states most heavily reliant on taxes from the wealthy (California, New Jersey, Connecticut, New York and Vermont) have graduated income taxes. Illinois has a flat tax.
The piece may explain why Illinois tax revenues shot up in the late 1990s. But it only partially explains the recent revenue crash.
* And I’m not quite sure about this one…
Tax money coming into state and local governments in Illinois fell sharply — by $2.2 billion dollars between 2009 and 2010, according to the U.S. Census Bureau.
The decline in tax revenue from $32 billion to $29.8 billion is on par with a pattern that has emerged during the past several years. Areas that measure a state’s economic health — income, sales and property taxes — all have weakened. […]
While income dropped for Illinois, general fund spending increased from $27.9 billion to $29.7 billion between 2009 and 2010.
According to the budget office, General Fund revenues fell from $29.1 billion in FY09 to $27.9 billion in FY10. Actual General Fund spending, according to GOMB, was $29.8 billion in FY09 and $25.5 billion in FY10. I’m not sure why there’s such a huge discrepancy here, but maybe somebody can enlighten me.
* And one more thing…
If budget cuts aren’t made now, Radogno said Illinois will face a $22.7 billion deficit by 2016.
The Senate Republicans have repeated this stat for weeks now. What they’ve done is projected spending at the top of the statutory spending cap and used lowballed revenue forecasts. Since state law now requires the General Assembly to match up revenues with spending, it’s not exactly a trustworthy number.
However, the General Assembly really ought to lower those spending caps, which are too high. It wouldn’t mean much in the “real” world, but it would take this oft-repeated argument off the table.
* Senate President Cullerton discusses state budget on Chicago Fox News
* IllinoisIsBroke.com launches statewide radio ad campaign
* That new Amazon tax. It was there all the time.
* Senator Radogno discusses Amazon Internet law: Remember, it was not a tax increase. It was simply a means to force places like Amazon to collect the same sales taxes brick and mortar stores must collect.
* At school for blind, travel budget cuts have impact beyond sports
* VIDEO: State Senator Kimberly Lightford On The GOP’s Proposed Budget Cuts
* Schilling amends tax philosophy: It was revealed last week that General Electric paid no taxes on $5.1 billion of profits made in the U.S. and actually claimed a tax benefit of $3.2 billion. “That’s not fair,” Schilling said.