Uh-oh
Monday, Jan 11, 2016 - Posted by Rich Miller
* From the Illinois Commission on Government Forecasting and Accountablity…
With the first half of FY 2016 completed, a few observations regarding revenues can be offered. The performance of the large economic related sources is mixed. While the largest source, persona l income tax, has performed somewhat stronger than expected over the first six months, the same cannot be said for corporate income tax and sales tax which have failed to meet even modest expectations.
Personal income tax receipts are down 15.7 percent so far this fiscal year compared to last fiscal year, which is a bit better than expected. Corporate income taxes have plunged 33.3 percent, however, and sales tax receipts are down 1.9 percent.
* And then there’s this…
* More on that from Mike Shedlock…
It was another disastrous month for the Chicago PMI. Economists expected a bounce back from last month’s unexpected dip into negative territory. Instead the numbers reflect what’s best described as a two-month crash.
The Econoday Consensus Estimate was a guess of 50 in a range of 48 to 53. The actual reading of 42.9 was far below any economist’s estimate. […]
Service Economy Headed for a Slowdown?
The Chicago PMI is a bit different because it contains a mix of both manufacturing and service companies. That makes matters worse given economists generally consider the service economy to be in good shape.
- Sir Reel - Monday, Jan 11, 16 @ 11:06 am:
But but we have a successful business man as Governor. He promised to bring those business skills to government and help Illinois’ economy.
- Anonymous - Monday, Jan 11, 16 @ 11:06 am:
Combined with the recent population loss (2014 was the first year since 1988 Illinois lost more people than it gained), there are some very clear red flags about the state of our state in recent years. Rauner inherited a mess.
This is not all on Blago, Quinn, Rauner or Madigan, but they each have played a part.
- Try-4-Truth - Monday, Jan 11, 16 @ 11:09 am:
===- Anonymous - Monday, Jan 11, 16 @ 11:06 am:
Combined with the recent population loss (2014 was the first year since 1988 Illinois lost more people than it gained), there are some very clear red flags about the state of our state in recent years. Rauner inherited a mess.
This is not all on Blago, Quinn, Rauner or Madigan, but they each have played a part.====
Only, it is on him. He ran to lead this state, he now has to lead. We are in worse shape today than we would have been if Quinn was reelected. Does anyone dispute this? If taxes would have remained where they were, and a state budget would have been passed, would we be in this situation?
No, a lot of this is on Gov. Rauner’s lap. I don’t see any other way to look at is.
- Try-4-Truth - Monday, Jan 11, 16 @ 11:13 am:
And taxes are lower, so business should have exploded. Why hasn’t it?
- AC - Monday, Jan 11, 16 @ 11:13 am:
Rauner didn’t create this mess, but he certainly made it worse.
- SAP - Monday, Jan 11, 16 @ 11:14 am:
Yikes, I would have expected an income tax decrease to spur some additional spending and boost sales tax receipts a bit.
- Juvenal - Monday, Jan 11, 16 @ 11:24 am:
=== Yikes, I would have expected an income tax decrease to spur some additional spending and boost sales tax receipts a bit. ===
I’m not sure why. We have 35 years of solid data that Reaganomics doesn’t work.
- Stormfield - Monday, Jan 11, 16 @ 11:25 am:
Sales tax is at least partially explained by lower fuel costs, but it remains concerning that consumers are not spending the money that lower fuel costs has left in their pocket.
This is a national phenomenon, but it still stings locally.
- Rich Miller - Monday, Jan 11, 16 @ 11:30 am:
===Reaganomics doesn’t work===
Dude, forget his rhetoric. In practice he was a Keynsian. He ran huge deficits to fuel major spending increases and imposed what was at the time the second largest tax hike in history.
- Robert the 1st - Monday, Jan 11, 16 @ 11:30 am:
=We are in worse shape today than we would have been if Quinn was reelected.=
I know plenty of people who disagree. 3.75% income tax seems pretty nice after 5%.
- veritas - Monday, Jan 11, 16 @ 11:31 am:
===Rauner inherited a mess.==
Yes - the car was headed for the ditch. But instead of grabbing the wheel and pulling back on to the road, BR chose to hit the gas. Elections have consequences.
- illinois manufacturer - Monday, Jan 11, 16 @ 11:33 am:
Sales tax may also be online?But clearly we are stuck at flat at best. The exports are due to the high dollar and dead in the water world economy
- Boss Tweed - Monday, Jan 11, 16 @ 11:36 am:
“3.75% income tax seems pretty nice after 5%.”
I’ll give my $30/month back if it helps the state pass a damn budget.
- Try-4-Truth - Monday, Jan 11, 16 @ 11:37 am:
====We are in worse shape today than we would have been if Quinn was reelected.=
I know plenty of people who disagree. 3.75% income tax seems pretty nice after 5%.===
That’s why I said “we”. Sure, 1.75% of an income of $500,000 per year is a lot. I don’t make that.
But, the state is crumbling with no plan to even patch it let alone fix it.
My question still stands: Does anyone really want to argue with the premise that Illinois was better off with Pat Quinn as Governor?
- Judgment Day - Monday, Jan 11, 16 @ 11:38 am:
IMO, Chicago PMI is a ‘bell ringer’. And recently it’s been trending in a bad way. Might want to consider if this economic indicator hasn’t a factor in our current budget impasse.
Because if the recent trend holds up (and it’s more than just last month), it’s likely to become one.
- Try-4-Truth - Monday, Jan 11, 16 @ 11:38 am:
Sorry, 1.25%.
- AC - Monday, Jan 11, 16 @ 11:38 am:
==I know plenty of people who disagree. 3.75% income tax seems pretty nice after 5%.==
I suspect that once we start playing “catch up” that we’ll all be wishing wishing we were still at 5%, especially once fee increases and services taxes are taken into account.
- Muscular - Monday, Jan 11, 16 @ 11:49 am:
Nothing has changed in the last year for the high workers compensation costs faced by businesses or the all the red tape to get state approval for something. Indiana takes days while Illinois takes months. Businesses are leaving the state and taking their jobs with them. Rauner seems to have done little to increase the efficiency and effectiveness of government when compared to nearby states.
- nona - Monday, Jan 11, 16 @ 12:10 pm:
Whenever Republicans propose tax cuts, they promise the new growth will more than pay for the lost revenue. What happened?
- Try-4-Truth - Monday, Jan 11, 16 @ 12:26 pm:
===- Muscular - Monday, Jan 11, 16 @ 11:49 am:
Nothing has changed in the last year for the high workers compensation costs faced by businesses or the all the red tape to get state approval for something. Indiana takes days while Illinois takes months. Businesses are leaving the state and taking their jobs with them. Rauner seems to have done little to increase the efficiency and effectiveness of government when compared to nearby states.===
Wrong:
http://www.chicagobusiness.com/article/20151027/NEWS02/151029869/illinois-workers-comp-costs-fall-below-indiana-wisconsin
- wordslinger - Monday, Jan 11, 16 @ 12:34 pm:
It was swell for COGFA to use a forced metaphor on Caesar crossing the Rubicon in regards to a lengthy commentary on the Fed and interest rates.
It would have been nicer to get some sort of explanation as to why COGFA missed by so much on corporate income and sales tax.
Wha’ happen?
- IL17 - Monday, Jan 11, 16 @ 12:39 pm:
Rauner and GOP acolytes are the SOLE OWNERs of current situation. Moody’s identified in it’s last outlook that maintaining even the 1% income tax rate change would have enable balance budget and programs. Yet, the sadist Gov. Rauner just had to harm as many people as possible to show what the ruthless capitalist he is !
- Federalist - Monday, Jan 11, 16 @ 1:00 pm:
I have said it before and I will say it again. If I were Rauner I would have presented to the GA a plan that included a temporary 3 year 1.25% additional tax to be used solely for the purpose of paying back bills.
Again, not to be put in the GRF slush fund to potentially expand government but to get our fiscal house somewhat in order and not be a deadbeat to those to whom the state owes money.
- Austin Blvd - Monday, Jan 11, 16 @ 1:07 pm:
AC-
“Rauner didn’t create the mess, but he certainly made it worse.”
Stated simply and elegantly. Sums it up in a nutshell.
- Federalist - Monday, Jan 11, 16 @ 2:13 pm:
- Federalist - Monday, Jan 11, 16 @ 1:00 pm:
I have said it before and I will say it again. If I were Rauner I would have presented to the GA a plan that included a temporary 3 year 1.25% additional tax to be used solely for the purpose of paying back bills.
I should have added that if I were Madigan I would present the same proposal. it might be difficult for Rauner to ignore.
- SAP - Monday, Jan 11, 16 @ 3:23 pm:
Juvenal: I didn’t say that I expected sales tax to make up for the lost income tax revenue. I just thought that might uptick a little. I certainly did not expect them to drop.
- Blue dog dem - Monday, Jan 11, 16 @ 3:32 pm:
….but if we raise property taxes and put a sales tax on certain services, won’t that fix the problem?
- Blue dog dem - Monday, Jan 11, 16 @ 3:33 pm:
Is that considered trolling?
- walker - Monday, Jan 11, 16 @ 3:36 pm:
An unexpected “two month crash” to end the year.
Which “status quo” is that?
To be fair, nothing the state government does, good or bad, has much economic impact on such short periods.
- foster brooks - Monday, Jan 11, 16 @ 4:51 pm:
we gave all those tax breaks to sears and they wont exist in two years
- wordslinger - Monday, Jan 11, 16 @ 7:48 pm:
–I have said it before and I will say it again. If I were Rauner I would have presented to the GA a plan that included a temporary 3 year 1.25% additional tax to be used solely for the purpose of paying back bills.–
It must be clear now by word and deed that a budget and fiscal responsibility have not been the governor’s priorities to date.
- Anonymous - Tuesday, Jan 12, 16 @ 12:14 am:
Nor have they been the speaker’s priorities to date.
Fiscal responsibility has not been among the speaker’s priorities for decades. It may not even be in his lexicon.
- wordslinger - Tuesday, Jan 12, 16 @ 8:01 am:
–Fiscal responsibility has not been among the speaker’s priorities for decades. It may not even be in his lexicon.–
I think he drives a Chrysler, not a Lexicon.
But you have to admit, in just one year, the governor’s actions have added billions to the pile of unpaid bills while effectively cutting billions in spending for social services and universities. We’re even back to skipping pension contributions.
That’s pretty quick work, and some set of priorities.