BUDGET
General Assembly budget watchdog reports on declining State income tax revenues. The report summarized revenue trends observed by the Illinois Department of Revenue (IDOR) in August 2023. During this 31-day period, total Illinois income tax revenues declined $61 million from the revenues enjoyed in August 2022. The decline was $38 million in personal income tax payments (payments made by individuals and individual-equivalent taxpayers, such as trusts and estates) and $23 million in corporate income taxes. The August 2023 numbers were reported to the General Assembly by the Commission on Government Forecasting and Accountability (CGFA), the General Assembly’s nonpartisan budget monitor office.
Illinois’ personal income tax cash flows are closely tied to trends in Illinois’ employment and wage rates. Most personal income tax payments are made through withholding from the 6.15 million Illinois employees who collect paychecks for nonfarm employment. CGFA accompanied its August 2023 spreadsheet with a data-based report, “FY 2023 Employment and Wage Data,” on trends in Illinois jobs and paychecks over the most-recently-competed 12-month fiscal period. During the fiscal year that ended on June 30, 2023, Illinois payroll growth and wage rate increase trends displayed a significant slowing trend. The economic boom conditions that had affected Illinois income tax receipts during the first part of FY23, including calendar August 2022, had sharply slowed down by the summer of 2023. This could explain part of the negative trend in August 2022 – August 2023 year-over-year State income tax revenue numbers.
CGFA reports that healthy wage conditions continued in Illinois’ construction sector in FY 2023, with the average construction worker enjoying earnings of $1,683/week (equivalent to more than $87,000/year, assuming continuous employment). Unfortunately, higher interest rates and an overall increase in costs in the housing market were contributing to the continued outburst of inflationary prices that are pressuring many Americans. Many Illinoisans can no longer afford to buy a home or are being forced to cut back on purchases of other goods and services. CGFA reports that new Illinois home permits issued in July 2023, the most recent month for which figures are available, dropped by 4.5% from comparable numbers in the prior month. Only 803 permits to build single family houses were issued in July 2023 throughout Illinois.
In spring 2023 the General Assembly’s Democrats passed, and Gov. Pritzker signed, an optimistic FY24 budget. The spending plan pledged to expend $50.4 billion during the 12-month period beginning July 1, 2023, and ending June 30, 2024. The FY24 budget included hundreds of millions of dollars in budget increases for fast-growing programs, such as the provision of medical care for non-legal Illinois residents. Illinois’ tax collectors were then asked to find the money to cover the costs represented by this optimistic budget. The slowdown in month-to-month and year-to-year revenue numbers indicates that Illinois may not be generating enough tax money to keep the promises made in the FY24 budget. The CGFA August 2023 report was released on Tuesday, September 5.
FIRST RESPONDERS
Scott’s Law offender sentenced to 15 months in prison for violation of law. The traffic-move-over law, in effect on all multilane Illinois highways, requires all drivers to move out of any traffic lane that is adjacent to a first-responder vehicle with its lights flashing if the motor vehicle can safely change lanes. The law was enacted by the Illinois General Assembly as “Scott’s Law” in honor of Lt. Scott Gillen (Chicago Fire Department) who was struck and killed by a DUI driver on the Dan Ryan Expressway on December 23, 2000.
Most Illinois drivers obey Scott’s Law. Some do not, and on February 15, 2021, a driver was at the wheel of a vehicle that, in an incident on Interstate 55 in Will County southwest of Chicago, struck the squad car of Illinois State Police Trooper Brian Frank, even though the trooper’s car had its emergency flashing lights activated. Frank suffered severe head injuries and was airlifted to a hospital for emergency surgery. Medical care saved Trooper Frank’s life, but as of 2023 he continues to face severe challenges requiring nursing assistance on a 24/7 basis. The driver was arrested and, after lengthy pretrial proceedings, pleaded guilty this summer. He was sentenced this week to serve 15 months in State prison for violation of the law.
GAMBLING
Casino floor at Chicago’s historic Medinah Temple holds tech rehearsal. Illinois casino regulations expect licensed casinos to operate safely and smoothly before granting permission to start up full public operations. To get this permission, last week owner Bally’s invited about 350 guests to their temporary casino floor on Chicago’s Near North Side to test out the floor. The gaming sessions, equivalent to a tech rehearsal for a stage show, included practice play on the gaming floor’s hundreds of electronic gaming machines and slot machines. Officials said that if the final practice sessions went smoothly, the Chicago facility would open to the general public within days. The practice gaming sessions began on Wednesday, September 6. The Medinah Temple gaming floor is the first legally licensed gaming casino to operate in Chicago.
HIGHER EDUCATION
Forbes “Top 25 Public Colleges” list honors University of Illinois at Urbana-Champaign (UIUC). The ranking uses public data to search out schools that, in the eyes of the Forbes magazine and website, “offer a world-class education for a fraction of the list price at top private colleges.” Illinois’s flagship public university was ranked as No. 9 among the United States’ public-sector institutions of higher education. Other top-25 schools in the Midwest included the University of Michigan (Ann Arbor), the University of Wisconsin (Madison), Purdue University, and Michigan State University in East Lansing. Schools at this rank are sometimes called the “Public Ivies,” in reference to the East Coast’s Ivy League.
Forbes stated that, to generate their list, they had inserted data sets for each eligible school’s return on student family investment, student success, student debt, alumni salary, and graduation rates. A “top 25” school is one where the student body enjoys a high rate of success in obtaining lifelong salaried employment, which in many cases includes additional studies at a graduate school.
Although Forbes noted the substantial cost advantage enjoyed by students at “top 25” public universities and their families, the magazine/website warned that these schools are not inexpensive by any means. At UIUC, the full listed cost of college tuition and college study-related fees, for academic year 2022-2023, was $15,714 for Illinois residents and $33,686 for out-of-state students. This number is exclusive of additional costs for housing, living expenses, and study-related non-fee items such as textbooks and course-requirement online access.
JOBS
Incobrasa Industries breaks ground on $250 million Illinois plant expansion. The manufacturing plant, located near Interstate 57 in Gilman, Illinois, crushes soybeans and processes the product into protein-rich and bio-oil products. Illinois soybeans, including the beans crushed at Incobrasa, are used to make animal feed, vegetable oil, and biodiesel fuel. Illinois is the largest producer of soybeans among the 50 U.S. states. The Gilman plant, which currently maintains 200 production and production-related full-time jobs, will maintain 240 full-time jobs upon completion of the expansion.
Incobrasa is an Illinois-based, Western Hemisphere-owned specialist in agricultural processing. The Gilman plant, including the 170,000 square feet that will be added by the expansion, is located in Iroquois County. The plant expansion is supported by the Economic Development for a Growing Economy (EDGE) tax credit program, created by the General Assembly to create and protect Illinois jobs. The groundbreaking ceremony took place at Gilman on Wednesday, September 6.
TAXES
Illinois Department of Revenue sets Cook County property tax multiplier. The figure of 2.9237 will apply to all property tax billings in the 2022 property tax cycle. The 2022 property tax cycle will generate billings that will be mailed out in calendar year 2023. The number, set by the Illinois Department of Revenue (IDOR), means that property tax bills mailed to Cook County owners will be more than 2.9 times what the billings would be if no multiplier existed.
The property tax multiplier is generated by a formula set forth in the State of Illinois’ Property Tax Code. The underlying reason for the multiplier is to equalize the assessment practices across counties. Many public-sector activities, especially public school districts, are funded with a combination of State tax money (primarily income tax and sales tax money) and local property tax money. Because of this, there is a perverse incentive for the county assessors, their township assessors, and their aides to under-assess local properties, collect lower taxes, and then plead poverty and beg Springfield for more money. The property tax multiplier is supposed to re-balance the books in counties with systematic under-assessments. In Cook County, properties are assessed under the supervision of the Cook County Assessor, a local elected official.
Many Cook County property owners do not believe they are under-assessed. Cook County property tax rates and billings are among the highest in the United States. The Cook County property tax multiplier, a substantial number that re-appears every year, has raised many Chicago-area public questions and expression of serious concern. The Cook County multiplier is a collective, countywide figure that represents the difference between the overall fair cash value of Cook County property and the assessment numbers on the books of Cook Conty Assessor Fred Kaegi. Thus, a property that is accurately assessed (or even over-assessed) will be forced to pay the multiplier as a result of sharing their identity within the county with other properties that may be under-assessed.