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Where do we rank nationally?

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* A new report by the Commission on Government Forecasting and Accountability takes a look at where we stand nationally on various metrics. I’m going to skip things like state taxation and most state spending because the income tax rates have risen since the numbers were compiled and a lot of state spending was curtailed during the impasse, so state support for things like higher education crashed.

So, let’s start with local government revenue

In 2016 (the most recent year of compiled [US Census] data available), Illinois ranked 5th in the nation in the category of local government tax revenue collected with an amount of $73.3 billion. California was ranked 1st with an amount of $305 billion. On a per-capita basis, Illinois ranked 9th at $5,709 per capita and was the highest ranked state in the Midwest Region. New York was first at $9,849 per capita. A major reason for Illinois’ high rankings in this area is because

The per capita number is the one to focus on here and that’s why I’m highlighting it.

* Now, let’s look at just local property tax collections

(I)n 2016, Illinois ranked 5th in the nation in the amount of property tax revenue collected. It was also the highest ranked state in the Midwest in terms of total dollars. On a per-capita basis, Illinois ranked 7th and was the highest ranked state in this category in the Midwest Region. Illinois’ per-capita rate was $2,115, which was well above the national average of $1,507.

We keep being told that we have the highest or second highest property taxes in the country, but the COGFA report says otherwise. Still, 7th is nothing to be joyful about.

* K-12 was always funded during the impasse

Illinois ranked 7th in the nation in the amount spent on elementary and secondary education in 2016 with an amount of $26.5 billion from state and local governments (property tax revenues). California was the highest ranked state with a total expenditure amount of $76.7 billion. On a per-capita basis, Illinois ranked 15th at $2,067 per capita, which was above the national average of $1,933. Wyoming was the highest ranked state on a per-capita basis at $3,445. Illinois has the second highest per capita ranking in the Midwest, just behind Iowa (ranked 14th)

* Local K-12 funding share

55.3% of Illinois’ portion of education funding in the [2015-2016 school year] came from local sources, 37.5% came from state sources, and 7.2% came from federal sources… Illinois’ local government portion of elementary and secondary education is among the highest in the nation. In the year shown, Illinois ranked 8th in the nation, but has been ranked 1st in this category as recent as the 2007- 2008 school year. Illinois has consistently been ranked above other states in the Midwest region for this category over the last several years.

The report includes this Census Bureau note: “Payments made by the state government into the state’s public school retirement systems on behalf of Illinois school districts are included in the tables that display state totals of elementary- secondary education finances.”

* Police protection

In 2016, Illinois ranked 5th in the nation in the amount of state and local government expenditures for police protection with a total of $5.2 billion. California ranked 1st with a total of $17.6 billion. On a per-capita basis, Illinois ranked 6th in the nation with a value of $406 per capita, above the national average of $338. Illinois was the highest ranked state in the Midwest Region in total dollars and on a per-capita basis. The highest ranked states on a per-capita basis were New York and Alaska, tied at a per- capita value of $500.

* Corrections

Illinois is ranked 12th in the nation in the amount of state and local government expenditures for corrections in 2016, spending $1.9 billion. California ranked 1st spending $15.5 billion. On a per-capita basis, Illinois ranked 49th with a value of $144 per capita, which was well below the national per-capita rate of $241. The highest ranked state on a per-capita basis was Alaska with a per-capita value of $456.

Illinois’ ranking on a per-capita basis has steadily declined over the past two decades. Illinois was ranked 29th in 1997, 38th in 2004, 43rd in 2006, and 46th in 2010, before settling to its current position of 49th. Similar to Illinois’ low ranking, several other states in the Midwest also had relatively low rankings in this category (Indiana: 39th; Ohio: 41st, Missouri: 44th; Iowa: 50th).

* Public welfare programs

In 2016, in the category of state and local government expenditures for public welfare programs, Illinois ranked 7th in the nation in total dollars with a value of $20.2 billion. California was ranked 1st with spending totaling $98.5 billion. Illinois, on a per-capita basis, ranked 34th with a per-capita value of $1,572, which was below the national average of $1,972 per capita. Kentucky (10th) was the highest ranked Midwest Region state with a per-capita value of $2,527. Only Missouri (38th) had a lower ranking than Illinois in the Midwest Region. New York had the highest per-capita ranking overall with a value of $3,307.

* Highways

In 2016, Illinois ranked 6th in the nation in the category of state and local government expenditures for highways with an amount of $9.6 billion. California had the highest total at $17.1 billion. On a per-capita basis, Illinois ranked 13th with a value of $745, which was above the national average of $541. Illinois’ per-capita ranking has increased in recent years from 25th in 2012 to as high as 10th in 2015.

Illinois was the second highest ranked state in the Midwest Region on a per-capita basis behind Iowa (ranked 9th) at $825 per capita.

* State and local debt outstanding

In 2016, Illinois ranked 4th in the nation with a total debt of $151.7 billion. In this category, state and local government debt outstanding includes short-term, long-term, full faith and credit, non-guaranteed and public debt for private purposes. California had the highest level of debt outstanding with $433.8 billion. On a per-capita basis, Illinois ranked 5th with a value of $11,816. This amount was well above the national average of $9,285. Illinois has consistently been the highest ranked state in the Midwest Region in both total dollars and on a per-capita basis

Also, our unemployment rate was 32nd lowest in the country as of September. We were tied at 4.1 percent with 5 other states.

posted by Rich Miller
Thursday, Dec 20, 18 @ 11:42 am

Comments

  1. I think the corrections statistics are hard to interpret without knowing where we stand in terms of prison population. If we are spending less because fewer people are incarcerated, that seems like a good thing. Otherwise, the situation is complicated.

    Comment by Actual Red Thursday, Dec 20, 18 @ 11:57 am

  2. RE: the COGFA report….. Multiple ways to rank which state has highest Property Taxes. One way would be to measure amount paid for an average home. For example, what would be the Property Tax bill be for a house valued at $200K?

    Comment by MortonPunkinChuckin Thursday, Dec 20, 18 @ 11:57 am

  3. With the mental health push in corrections, I’m guessing the next time they do this report our per capita cost will be higher.

    Comment by Fixer Thursday, Dec 20, 18 @ 12:13 pm

  4. In terms of property taxes, you can’t effectively rank property taxes collectively or on a per capita basis without also considering property values.

    All the states ranked 1-6, and 8-10 have much higher property values than Illinois, so yes, Illinois has MUCH higher property taxes because those tax amounts are gains properties that are worth much less.

    Compare Illinois to Massachusetts. In terms of property tax collection per capita the two states are almost equal. (MA is a little higher). However, the median home sales value of a house in MA is more than $440,000.00, while in IL it’s $235,000.00. Obviously, a state has a lower tax rate if you pay $2k a year for a house that’s worth $400k compared with paying $2k a year for a house that’s worth $200k. In fact I think you could argue the effective tax rate is half.

    Comment by Merica Thursday, Dec 20, 18 @ 12:15 pm

  5. Property taxes per capita stats should be paired with value of real estate per capita and broken out as commercial, industrial and residential.

    The real estate taxes paid on Loop office buildings obviously increases the per capita amounts (compared with Iowa, for example) however those office buildings represent wealth not present in other states.

    Comment by Hamlet's Ghost Thursday, Dec 20, 18 @ 12:30 pm

  6. = Illinois has MUCH higher property taxes =

    Doesn’t sound like it according to the COGFA report. Sound like a lot of talking points were off the mark and our current governor should have stopped bad mouthing Illinois and built on the positives n order to solve the negatives.

    But, you can move to Michigan. You will love their miles of rutted dirt roads.

    Comment by JS Mill Thursday, Dec 20, 18 @ 12:31 pm

  7. In 2016, Illinois ranked 4th in the nation with a total debt of $151.7 billion. In this category, state and local government debt outstanding includes short-term, long-term, full faith and credit, non-guaranteed and public debt for private purposes.

    How an this number possibly be accurate. The City of Chicago has 28 billion in unfunded pension liabilities, so just adding that to the state’s pension liability of 130 billion would exceed that number. Throw in retiree health care costs and we are over 200 billion in the red.

    Comment by Lucky Pierre Thursday, Dec 20, 18 @ 12:32 pm

  8. JS Mill: For example, i have a friend who lives in Kane County. She bought her house last year for $235k. Her real estate taxes are $7,500/yr. At that rate, over her $30yr mortgage, she will have paid her homes value twice, and paid $235k in real estate taxes.

    What it means for her is that home ownership is a net negative proposition. She will not earn any real equity. In NJ, for $7k in property taxes, you would get a house that is worth $600k. Over 30 years you would break even. It’s a big difference.

    For full disclosure I am a lifelong very liberal progressive democrat. My politics don’t lead me away from the fact that this state has a very big problem. We won’t fix it unless we acknowledge it.

    Comment by Merica Thursday, Dec 20, 18 @ 12:40 pm

  9. I would like us to try to lower property taxes in a fair and humane way, by getting a progressive income tax and increasing the state’s share of education funding. The Rauner way, local stripping of union rights, is thankfully unacceptable, as we saw early in local government TA resolution meetings and votes, and in this election.

    Comment by Grandson of Man Thursday, Dec 20, 18 @ 12:46 pm

  10. Can’t say I am interested in how ALEC ranks us. Manufacturing decline is somewhat overstated state and nationally. There are a lot of temp workers and some are in information and management of companies so add a little under 100k. EConomic Policy institute says about another 100k went to China. Most of the rest were in Machinery and primary metals like steel those were mostly due to technology.

    Comment by Not a Billionaire Thursday, Dec 20, 18 @ 1:01 pm

  11. We continue to have to have the narrative on any piece state tax issue. Taxes are combination of all “buckets” the state receives.

    Illinois residentsis in the top 5 in the tax total paid - it has been for many years- yet we have hugh growing debt.

    Time to at least real on the solution -

    Comment by cannon649 Thursday, Dec 20, 18 @ 1:01 pm

  12. JS, don’t venture into finance and econ.

    Just don’t.

    Comment by Anonymous Thursday, Dec 20, 18 @ 1:27 pm

  13. == I have a friend who lives in Kane County. She bought her house last year for $235k. Her real estate taxes are $7,500/yr ==

    Springfield isn’t the primary culprit, here. A contributing culprit? Sure, but probably not the biggest cause.

    That $235k house was probably built on land that was a cornfield 20-30 years ago - maybe less - and much of that $7500 per year is probably paying for new streets, sewers (sanitary & stormwater) and brand new schools built from scratch.

    It’s becoming more and more obvious that building suburbia from scratch in a cornfield is not all that financially sustainable.

    Comment by Hamlet's Ghost Thursday, Dec 20, 18 @ 1:27 pm

  14. If Illinois was ranked as 25th in every category would overall taxes be higher or lower and how would spending be realigned? Or pick another level say 10th in everything. Maybe I will play with that calculation.

    Comment by Ben Thursday, Dec 20, 18 @ 1:45 pm

  15. In this all about me world, we’ll never have will to fix the problem: “Very little value relative to the amount of taxes we pay”.

    Comment by Harpy Thursday, Dec 20, 18 @ 2:26 pm

  16. Folks in other states are highly critical of Illinois budget problems, but the metrics for education & income would attest that we are in the top tier of economic power when compared to other states.
    And yes, the budget deficit needs to be addressed by our state.

    Comment by Top of the State Thursday, Dec 20, 18 @ 2:29 pm

  17. ===She will not earn any real equity.===

    That’s only correct if her house is worth $235,000 in 30 years. I suspect inflation will increase the future value of this home and the equity will be found in the profit made when the house is sold. Assuming the local governments use the money well and the schools and roads are in good shape, why wouldn’t her home value increase?

    Comment by 47th Ward Thursday, Dec 20, 18 @ 3:21 pm

  18. IPI lied, LP. They lied.

    Comment by Anonymous Thursday, Dec 20, 18 @ 3:25 pm

  19. 47th Ward, great point. Unfortunately, Montgomery Illinois is experiencing depreciation instead of appreciation. My friends house when built in 2013 sold for $260k. Many central and downstate cities and towns will experience little to no appreciation.

    Take Springfield for example. The historical rate of appreciation is 1.5%. If you buy a $200k house in Springfield and hold onto it for 30yrs, you will pay $150k in interest on your mortgage (at 4.9%), you will pay $175k in property taxes, and at the end of 30yrs your house will be worth $310k. So right there owning a house in Springfield is a negative equity proposition. When you take into account maintenance and improvements it only gets worse.

    Comment by Merica Thursday, Dec 20, 18 @ 3:33 pm

  20. Well Merica, that’s one of the reasons I support immigration reform (which is not synonymous with supporting open borders). Rural Illinois will continue to depopulate regardless, but anything we can do to attract more residents will slow the process and bring economic growth.

    Just saying.

    Comment by 47th Ward Thursday, Dec 20, 18 @ 3:38 pm

  21. ====Rural Illinois will continue to depopulate regardless, but anything we can do to attract more residents will slow the process and bring economic growth.

    It’s really the only place to find more workers for the ag industry in depopulating areas. It’s not that citizens and permanent residents won’t do the jobs, they don’t even live where many of the jobs are.

    Comment by ArchPundit Thursday, Dec 20, 18 @ 3:52 pm

  22. Since it has been in the news this week, Illinois ranks in bottom ten nationally in the amount of gas taxes going to infrastructure. Only Missouri in Midwest has a lower gas tax per gallon which goes to roads,bridges or transit. We are much lower than Iowa and Indiana which both just raised their gas taxes significantly.

    Comment by RTA Chairman Thursday, Dec 20, 18 @ 4:13 pm

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