Question of the day
Monday, Feb 3, 2025 - Posted by Rich Miller
* The Tribune has a budget story up, and it points to some of the more overlooked aspects of the problems the state faces…
In its November report, the governor’s budget office also pointed to pressure from continued inflation in medical costs and “moderate growth rates in the various categories of state spending.”
Another challenge stems from previous overpayments of certain tax revenues to local governments as a result of unanticipated consequences of a state tax law enacted in response to provisions in Trump’s 2017 tax cuts, said Natalie Davila, a public finance economist who has worked with the Illinois Municipal League and previously as director of economic and tax policy research at the state Department of Revenue.
To correct those overpayments, the state held back about $1.6 billion from municipalities last budget year and additional funds this year, providing temporary boosts to state revenue that won’t be repeated in the coming year, Davila said. […]
But no single issue accounts for the entire increase in expected spending, and the public projections so far don’t account for many of the top-of-mind political issues likely to drive the debate this spring.
* Medical cost inflation is a serious issue…
Commercial health care spending growth is estimated to grow to its highest level in 13 years, according to PwC’s newest research into annual medical cost trend. PwC’s Health Research Institute (HRI) is projecting an 8% year-on-year medical cost trend in 2025 for the Group market and 7.5% for the Individual market. This near-record trend is driven by inflationary pressure, prescription drug spending and behavioral health utilization.
HRI is also restating the 2023 and 2024 medical cost trends as higher than previously reported based on the input of health plans we surveyed and their trend experience. This unfavorable trend reflects higher than expected utilization of glucagon-like peptide-1 (GLP-1) drugs as well as higher acuity (higher levels of care) inpatient and outpatient utilization. Inpatient and outpatient utilization were driven by demand from care deferred since the pandemic, which was met by newly created capacity as sites of care shifted to outpatient, professional and ambulatory care settings.
The WTW Global Medical Trends Survey projects medical inflation to rise by 8.7 percent this year.
Medical inflation has not been that high in 13 years.
* Gov. JB Pritzker last week…
It’s very important that we live within our means in this state, and that we not resort to tax increases as a way to, you know, to balance the budget, right? And so that’s what the communication we’ve had with our agencies and looking at all the priorities that we need to take care of.
* The Question: Do you agree or disagree with the governor’s pledge not to raise taxes to balance the budget? Take the poll and then explain your answer in comments, please.
- Demoralized - Monday, Feb 3, 25 @ 12:31 pm:
I disagree. You should never take anything off of the table.
- Steve - Monday, Feb 3, 25 @ 12:32 pm:
I agree. Illinois is on the high side of many taxes. Don’t know where they want to cut.
- Chicagoan - Monday, Feb 3, 25 @ 12:34 pm:
Ruling out tax increases for no real reason is inane when the right does it and it’s inane when the Gov says it.
“Think Big and shrink the government” will not be the winning message he hopes.
- Donnie Elgin - Monday, Feb 3, 25 @ 12:37 pm:
Agree -overall tax burden already too high - Plus if they increase taxes Springfield will come under more pressured to help fix CPS’s ludicrous $505 million deficit.
- Joe Bidenopolous - Monday, Feb 3, 25 @ 12:38 pm:
Disagreed. Nothing should be off the table and I am *very* skeptical that a $3B shortfall (plus the transit cliff, etc.) can be covered by austerity measures along
- Jerry - Monday, Feb 3, 25 @ 12:47 pm:
I disagree. If you make more money, you should pay more in taxes. The Oligarchs should be contributing their fair share, just like the rest of us do. Just like no Socialist Entitlements for professional sports teams and their stadiums.
- 312Lawyer - Monday, Feb 3, 25 @ 12:57 pm:
Agreed. Democracy won at the ballot box. Cut spending.
- Arsenal - Monday, Feb 3, 25 @ 12:59 pm:
I voted disagree bc nothing should be off the table, but it’s politics and I completely understand why he said it.
- Facts Matter - Monday, Feb 3, 25 @ 12:59 pm:
I agree with the Governor. His comments at the beginning of the legislative session provide important context for the General Assembly.
There are always a plethora of new programs, and requests for expansion of programs, that are proposed each year. By stating his opposition to increasing taxes, the General Assembly will have this context in which to decide whether to proceed with any new or expanded programs.
An important follow up for the Governor is what he means by “tax increases.” Does he just mean that he won’t support increases in the tax rate of any taxes, or will he also be against any expansion of the tax base of any existing taxes by expanding existing taxes to things that are currently not taxed?
- H-W - Monday, Feb 3, 25 @ 1:00 pm:
I voted “disagree,” but only on theoretical grounds. I would not make an absolutist statement until I have specific data points to support that absolutist statement. A pledge is an absolutist statement.
That said, I do support a general, public statement that says “at this point, I have no reason to believe that we need to raise taxes going forward.” I would also say, “and I have no inclination to react toward the President’s assertion that things must get much worse before they get better. Forty-seven is just a fear-mongering, grifter. Pay it no mind.”
- Jack S. in Chatham - Monday, Feb 3, 25 @ 1:02 pm:
Illinois should raise the alcohol excise taxes and increase the funding for tobacco tax collection. Voted No.
- Anyone Remember - Monday, Feb 3, 25 @ 1:08 pm:
Disagree. The General Funds have revenue sources that do NOT grow with inflation (alcohol, tobacco, utility, etc.). Been that way since late Thompson. Was this part of the reason for the graduated income tax?
- Captain Obvious - Monday, Feb 3, 25 @ 1:09 pm:
No new taxes are necessary. We pay enough in every area of taxation to fund government needs. And Jerry, here in Illinois if you make more income, you pay more in taxes. Kind of how it works. At least in my case.
- Nick Name - Monday, Feb 3, 25 @ 1:11 pm:
Disagree. Refusing to raise taxes when more cash flow is needed is dysfunctional.
- Demoralized - Monday, Feb 3, 25 @ 1:15 pm:
==Democracy won at the ballot box. ==
What? What does that have to do with anything with regard to this topic?
- Steve - Monday, Feb 3, 25 @ 1:18 pm:
-The Oligarchs should be contributing their fair share, just like the rest of us do-
In Illinois, the upper 20% are paying the brunt of the taxes. This bizarre notion that as a class billinaires aren’t paying taxes or lower taxes than poor people is laughable. The problem for Illinois is can you count on the super -rich to stay here when Florida has a zero state income tax? It’s hard to compete with zero.
- Merica - Monday, Feb 3, 25 @ 1:19 pm:
the governor is doing a good job reading the tea leaves. It’s time for the Democrats to start prioritizing winning
- Steve - Monday, Feb 3, 25 @ 1:31 pm:
No doubt it’s difficult when you are a progressive blue state to not have a progressive state income tax. Most blue state do. That’s why I expect the issue to come up again. CTU isn’t the only group who wants a progressive state income in Illinois.
- Grandson of Man - Monday, Feb 3, 25 @ 1:36 pm:
Disagree with the pledge. Just say whether or not something will be done, don’t swear to it. It may have to be done one day. Plus, with full awareness via the many pro-Fair Tax campaign ads, voters rejected a tax cut on themselves and a way for Illinois to raise revenue. Part of it is on them.
- Timmeh - Monday, Feb 3, 25 @ 1:36 pm:
If the 2020 election proved anything, it is that voters don’t do nuance. We’re not going to suddenly get a progressive tax, so I don’t see the point in promising to raise taxes. Give the people who voted against the progressive tax what they want and otherwise find a way through these next few years.
- clec dcn - Monday, Feb 3, 25 @ 1:38 pm:
I agree in our state real estate tax is horrible. I do think a real think tank approach to medical cost can help. We have to figure out a better way to get medical care faster and more efficient. The long-term answer is preventative care as always, but it does not help in short run. I don’t agree with JB about almost anything but here I do,
- Rich Miller - Monday, Feb 3, 25 @ 1:38 pm:
==Most blue state do===
West VA, Ohio, N. Dakota, Louisiana, Nebraska, Wisconsin, Arizona, Arkansas and Kentucky enter the chat.
Also, Indiana has local income taxes.
- Frida's Boss - Monday, Feb 3, 25 @ 1:49 pm:
I agree with the Governor’s comment. It does leave him open to a hit. Last year, taxes were raised by almost $1 billion. How do you say, ” We do not resort to raising taxes to balance a budget?”, when you just did it last year.
As others said, voters don’t do nuance- “We do not resort to raising taxes to balance a budget.” Governor Pritzker has increased your taxes by X since coming into office. Then just list all of them.
It won’t hurt him. The GOP doesn’t have a viable candidate. But it’s now something the GOP can hold on to and fundraise off of that voters will understand.
- Homebody - Monday, Feb 3, 25 @ 1:59 pm:
I said agree, but I think it needs about a hundred caveats and asterisks.
Part of the problem is we have some inherent inefficiencies in a country this large, with some responsibilities being split between the local, state, and federal levels. I’m not opposed to increasing taxes when necessary, but I don’t like the idea of increasing taxes without ever looking at existing structural inefficiencies which allow some to protect their little fiefdoms.
- Jerry - Monday, Feb 3, 25 @ 2:16 pm:
Thank you Grandson of Man, well put. It was a Progressive Tax with cuts for the hard working middle class of this state.
- Steve - Monday, Feb 3, 25 @ 2:29 pm:
-Also, Indiana has local income taxes-
California, New York , Connecticut, New Jersey, Minnesota, and Hawaii. Solid blue states generally have progressive state income taxes. This makes Illinois some what different for a progressive state.
- SaulGoodman - Monday, Feb 3, 25 @ 2:41 pm:
Strong disagree.
The state is facing a $3+ billion deficit without even including things like the Tier 2 fix or transit funding.
There’s not a viable path to slashing over $3b in spending. Our state already lags behind in education funding, human services funding, etc.
Taking revenue increases off the table is bad for Illinois.