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* 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.
posted by Rich Miller
Monday, Feb 3, 25 @ 12:22 pm
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I disagree. You should never take anything off of the table.
Comment by Demoralized Monday, Feb 3, 25 @ 12:31 pm
I agree. Illinois is on the high side of many taxes. Don’t know where they want to cut.
Comment by Steve Monday, Feb 3, 25 @ 12:32 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.
Comment by Chicagoan Monday, Feb 3, 25 @ 12:34 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.
Comment by Donnie Elgin Monday, Feb 3, 25 @ 12:37 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
Comment by Joe Bidenopolous Monday, Feb 3, 25 @ 12:38 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.
Comment by Jerry Monday, Feb 3, 25 @ 12:47 pm
Agreed. Democracy won at the ballot box. Cut spending.
Comment by 312Lawyer Monday, Feb 3, 25 @ 12:57 pm
I voted disagree bc nothing should be off the table, but it’s politics and I completely understand why he said it.
Comment by Arsenal 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?
Comment by Facts Matter Monday, Feb 3, 25 @ 12:59 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.”
Comment by H-W Monday, Feb 3, 25 @ 1:00 pm
Illinois should raise the alcohol excise taxes and increase the funding for tobacco tax collection. Voted No.
Comment by Jack S. in Chatham Monday, Feb 3, 25 @ 1:02 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?
Comment by Anyone Remember Monday, Feb 3, 25 @ 1:08 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.
Comment by Captain Obvious Monday, Feb 3, 25 @ 1:09 pm
Disagree. Refusing to raise taxes when more cash flow is needed is dysfunctional.
Comment by Nick Name Monday, Feb 3, 25 @ 1:11 pm
==Democracy won at the ballot box. ==
What? What does that have to do with anything with regard to this topic?
Comment by Demoralized Monday, Feb 3, 25 @ 1:15 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.
Comment by Steve Monday, Feb 3, 25 @ 1:18 pm
the governor is doing a good job reading the tea leaves. It’s time for the Democrats to start prioritizing winning
Comment by Merica Monday, Feb 3, 25 @ 1:19 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.
Comment by Steve Monday, Feb 3, 25 @ 1:31 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.
Comment by Grandson of Man 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.
Comment by Timmeh Monday, Feb 3, 25 @ 1:36 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,
Comment by clec dcn 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.
Comment by Rich Miller Monday, Feb 3, 25 @ 1:38 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.
Comment by Frida's Boss Monday, Feb 3, 25 @ 1:49 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.
Comment by Homebody Monday, Feb 3, 25 @ 1:59 pm
Thank you Grandson of Man, well put. It was a Progressive Tax with cuts for the hard working middle class of this state.
Comment by Jerry Monday, Feb 3, 25 @ 2:16 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.
Comment by Steve Monday, Feb 3, 25 @ 2:29 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.
Comment by SaulGoodman Monday, Feb 3, 25 @ 2:41 pm
“Taking revenue increases off the table is bad for Illinois.”
But raising taxes when people are already majorly struggling is a great idea, right? Inflation is making it very tough for the highest overall tax burden in the nation of Illinois to raise taxes in any meaningful way.
Comment by Ben Monday, Feb 3, 25 @ 2:44 pm
We voted “agree” unless there is no way to fashion a budget that pieces together a spending plan that keeps the train running mostly on time. But the big fly in the ointment is any effort to include CTA/CPS money issues too. Schools will get more anyway. Probably limited sympathy for CTA — even with PACE, METRA tie ins. The whole group needs to designs a system that takes people where they need to go rather than back and forth to downtown. But that should have been on someone “to do list” pre COVID. It will be a really fun spring session.
Comment by Annonin' Monday, Feb 3, 25 @ 2:45 pm
-There’s not a viable path to slashing over $3b in spending-
You are probably right because that’s a whole lot of money.It’s easier to raise taxes than reform public pensions.
Comment by Steve Monday, Feb 3, 25 @ 3:21 pm
===Inflation is making it very tough===
Overall, inflation ain’t super high. The tariffs, however, could wreak serious havoc unless he backs down.
Comment by Rich Miller Monday, Feb 3, 25 @ 3:23 pm
We can’t simply slash our way out of this. While cuts will have to be part of the equation, so will increased revenue. It sucks, but that’s our reality this year. The amount that we would have to cut, if we just used spending reductions to balance this budget, would be devastating to more than just the flashy talking point items like undocumented resident healthcare. Pension reform is only going to get us so far, if it’s even possible at this point. We need revenue, even if it’s a temporary source that sunsets in 2-3 years after we have time to scale back spending in a more responsible manner.
Comment by Spanky Monday, Feb 3, 25 @ 3:54 pm
People are hurting. The cost of living crisis is ravaging this country, including Illinois. JB is right not to raise taxes.
Comment by Aurora Asteroid Monday, Feb 3, 25 @ 4:03 pm
==than reform public pensions==
Oh brother. Reform how? The Illinois Supreme Court has already spoken on that matter. Any reforms you can make would be to new employees and that isn’t going to save you a lot of money out of the gate. It wouldn’t even come close to making a dent in any significant deficit.
Comment by Demoralized Monday, Feb 3, 25 @ 4:05 pm
I’m with =Jerry - Monday, Feb 3, 25 @ 12:47 pm:= We subsidies way too much for many corporations, enough. Let the millionaires and billionaires pay their fair share, Let us breath.
Comment by Mister Ed Monday, Feb 3, 25 @ 4:11 pm
I voted agree but think we need to shift the mix from property taxes to sales taxes by broadening the base
Comment by Phineas Monday, Feb 3, 25 @ 4:31 pm
So far, 72% of those responding to the Poll do not want taxes raised.
That is telling.
Comment by Mason County Monday, Feb 3, 25 @ 4:51 pm
===that we not resort to tax increases as a way to, you know, to balance the budget, right?===
Disagree. Voters don’t do nuance and may think a lot of things that aren’t tax increases are actually tax increases.
He also failed to specify what kind of taxes he is referring to.
He is effectively removing a policy tool from the table with zero discussion of the possible policy solutions or which type of tax policy might be available.
Comment by Candy Dogood Monday, Feb 3, 25 @ 5:35 pm
==People are hurting. The cost of living crisis is ravaging this country, including Illinois.==
Which, ironically, is why taxes may need to be increased. People will be needing more services, which costs more money.
I don’t think the gov should rule anything out. The final deal is likely to be a mix of cuts and revenue increases (AKA taxes).
==So far, 72% of those responding to the Poll do not want taxes raised.
That is telling. ==
And yet, the folks taking the time to comment are about 50-50. That is also telling.
Comment by Pot calling kettle Monday, Feb 3, 25 @ 6:11 pm
He’s a billionaire. We could raise billions of dollars by taxing only him and he would still have billions left over. But I’m voting no because I don’t want to hurt his feelings.
Comment by Mike Gascoigne Monday, Feb 3, 25 @ 7:19 pm