Editorial | State's improving economy

Editorial | State's improving economy

It may be fleeting, but as 2018 ended, there was reason for some optimism about the Illinois economy. Strong employment levels produced impressive increases in income and sales tax revenue for the year.

In the last six months of 2018, overall tax receipts flowing into Illinois government coffers showed a nearly 10 percent hike, according to the Legislature's Commission on Government Forecasting and Accountability. Sales tax revenue was up 7.5 percent statewide, personal income tax collections were up 11 percent and corporate income taxes jumped 17.7 percent. Through the first six months of the year, all state revenue sources were up nearly $1.5 billion more than a year earlier. As UI economist J. Fred Giertz noted last week, it was an odd ending for outgoing Gov. Bruce Rauner, who spent much of four years belittling the performance of the state's economy.

"Most politicians in his position grossly overstate the positive," Giertz said. "Unemployment stood at 6 percent when he entered office and fell to the current 4.2 percent, yet the governor consistently highlighted the state's ills."

Here's another measure: In January 2015, the month Rauner took office, the state collected $669 million in sales taxes. Last month, it took in $815 million.

The booming national economy is a good part of the reason that Illinois' economy is so strong. And there's reason to believe, the COGFA economists say, that an economic slowdown is ahead.

"Overall, the economy appears to be ending 2018 on a strong note, but the future is more uncertain," wrote analyst Benjamin Varner. "Economic prognosticators see a slowing of the economy in 2019, with further deterioration in 2020."

Amid all the numbers, there's a lesson for both Republicans and Democrats in Illinois: This is still a big state with a big, balanced, productive economy. But it needs to be tended carefully, especially if this welcome growth is to persist. That $1.5 billion (or more) in revenue growth this year is already claimed because the state still has a bill backlog estimated at $7.1 billion. And the Democratic Legislature and new Democratic governor have to be cautious about spending beyond the state's means.

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