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* 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…
“Obviously the tax changes enacted halfway through the fiscal year played the key role in the increase, as did the tax amnesty program which occurred in the fall,” said a COGFA analysis. “The magnitude of the effect of those items often served to mask the underlying improvement in the economic sources that was happening simultaneously with the tax changes.
“While impossible to dissect and assign values to each, it was clear from receipting performance that revenues were recovering from last year’s dismal showing which saw receipts plunge over $2 billion.”
* 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 is now working on fiscal year 2012 revenue projections, which may be down from the estimates made four months ago, [Jim Muschinske, revenue manager for COGFA] said.
“The General Assembly cut and then the governor cut again,” he said. “So we’re trying to get a handle on what that means in terms of federal sources. But it’s going to be hundreds of millions less than what was anticipated in the March period. You’re looking at probably between $400 million and $500 million less federal money.”
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…
* Fewer people sought unemployment aid last week
* Retailers post strong June sales
* J. P. Morgan unit buying suburban firm for $470 million
* Advocate planning $202-mil. expansion of Christ Medical Center
posted by Rich Miller
Thursday, Jul 7, 11 @ 10:58 am
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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.
Comment by Anon Thursday, Jul 7, 11 @ 11:14 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.
Comment by Angry Chicagoan Thursday, Jul 7, 11 @ 11:17 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.
Comment by wordslinger Thursday, Jul 7, 11 @ 11:24 am
We are beating Indiana! Hooray!
Watch out Kentucky!
Let’s spend the extra money on lottery tickets, I feel lucky!
Comment by VanillaMan Thursday, Jul 7, 11 @ 11:25 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.
Comment by Redbird Thursday, Jul 7, 11 @ 11:39 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.
Comment by 47th Ward Thursday, Jul 7, 11 @ 11:41 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.
Comment by Anon Thursday, Jul 7, 11 @ 11:44 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.
Comment by Wensicia Thursday, Jul 7, 11 @ 11:54 am
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.
Comment by Cincinnatus Thursday, Jul 7, 11 @ 12:08 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.
Comment by Excessively Rabid Thursday, Jul 7, 11 @ 12:14 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.
Comment by Ghost of John Brown Thursday, Jul 7, 11 @ 12:16 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.
Comment by Cook County Commoner Thursday, Jul 7, 11 @ 12:32 pm
@47th Ward -
Credit for the tax amnesty program goes to Jack Franks.
Comment by Yellow Dog Democrat Thursday, Jul 7, 11 @ 1:41 pm
Like I said YDD, Franks’ bill was a Republican idea. Lol.
Comment by 47th Ward Thursday, Jul 7, 11 @ 1:50 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”.
Comment by Holdingontomywallet Thursday, Jul 7, 11 @ 2:13 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!
Comment by Anony Thursday, Jul 7, 11 @ 3:44 pm
held-head
Comment by 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.===
Illinois has no state sales tax on food.
Comment by 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.–
Where do you buy your eggs, cousin? Get in the ballgame.
Comment by wordslinger Thursday, Jul 7, 11 @ 5:09 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.
Comment by Anony Thursday, Jul 7, 11 @ 5:47 pm
===The tax is 1%, btw. ===
That’s the local share. The state gets none of it.
Comment by Rich Miller Thursday, Jul 7, 11 @ 10:35 pm
@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.
Comment by Yellow Dog Democrat Friday, Jul 8, 11 @ 12:44 am