Thursday, March 23, 2023

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A proposed flavored tobacco ban is back on the table in Minnesota, Trump attorney Evan Corcoran must testify in the documents probe, and a "clean slate" bill in Missouri would make "expungement" automatic.

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The Fed raises interest rates and reassures the banking system is sound, Norfolk Southern reaffirms a commitment to the people of East Palestine, and TikTok creators gather at the Capitol to support free expression.

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Economists: High Tax Burden Driving IL Families, Businesses Out of State

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Monday, February 20, 2023   

Studies show the tax burden on people and businesses in Illinois - and particularly those in Chicago - is among the highest in the country.

Economists warn that unless lawmakers change how they write budgets, Illinois is likely to continue its decade-long exodus of residents and businesses.

Reports show that the median Illinois household has a tax liability of $9,500, while Chicago's debt per taxpayer is almost $42,000.

Justin Carlson is a policy analyst for Illinois Policy Institute. He said the main driver of debt at both Chicago City Hall and the statehouse is underfunded pensions.

"It means higher taxes and higher fees, as the pension systems have required more funding," said Carlson. "That's less funding that you have for education or health care or social programs, or violence prevention, different things that communities rely on."

Carlson said the watchdog group Truth in Accounting reports Chicago's debt totals almost $49 billion, with two-thirds of that owed to the city's pension fund. In recent years, the city has almost doubled its property taxes to make its annual payments.

Carlson said across the state, the annual effective tax rate is just over 15%, making it the largest among the 50 states and Washington, D.C.

He said the high taxes are taking the biggest bite out of the incomes of people in marginalized neighborhoods and communities of color.

"That burden shifts even more to the people who can't afford to leave or don't want to leave," said Carlson. "Your taxes are just going to continue to go up, and that kind of feeds this vicious cycle where you have less money to draw from, and then the people who are left need to pay for higher and higher burdens."

He said part of the problem is that the formula for funding public pensions is spelled out in the Illinois Constitution, giving lawmakers very little leeway in how they write the budget.

"If you wanted to reform public pensions in Illinois, you would need to advance a constitutional amendment in order to change the benefits that are currently being offered," said Carlson. "So it's the case really locally and statewide of pensions being over-promised."


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