Gov. J.B. Pritzker once again is making his case for Illinois voters to support a progressive income tax amendment.
A report issued this week by Gov. Pritzker’s office prompted a lot of hand-wringing about the poor state of Illinois’ finances.
No surprise there, because the governor used the report to bolster his stance that the state needs higher taxes. He again urged voters to support his proposed progressive income tax hike amendment to the Illinois Constitution in November 2020.
But the Illinois Economic and Fiscal Policy Report contained plenty of good news, too.
Even if the state’s finances remain problematic — what else is new? — the state’s economy is doing well.
Budget director Alexis Sturm reported that the “current U.S. economic expansion is the longest on record, reaching 121 months and surpassing the previous record of 120 months ... the unemployment rate is at a near 50-year low and wages are near historic highs in real terms.”
Simultaneously, she reports, Illinois is “benefitting from a tight labor market and accelerating economic growth.”“... Illinois’ unemployment rate (3.9 percent) has hovered around this historic low, Illinois’ wage growth has accelerated above average growth seen in bordering states. Wage growth in Illinois has exceeded its neighbors and the U.S. over the last 15 months,” Sturm’s report states.
That, of course, is what’s happening now. But what of the future?
Sturm mentioned a series of negatives as possibilities, including the ongoing trade dispute as one potential economic drag that could undermine continued future growth.
But she cited IHS Markit’s prediction that downplayed the possibility of a “recession,” even though it does “project slower economic growth.”
Illinoisans have certainly heard far worse economic news in past years.
Unfortunately, the state of the state is not nearly as good as the state of the state’s economy.
The report predicted “sizeable deficits” for fiscal years 2021-25 and estimated the amount of unpaid bills will jump from the current $6.9 billion to $19.2 billion over that same time period.
Obviously, the state report contained mixed messages. But forecasts are just that, predictions of how future events will play out.
It is, of course, easy to see why the governor would use this report to promote a policy change — the progressive income tax hike amendment — he’s long supported. He did the same thing recently after releasing information on his 2018 state and federal income taxes.
But not everyone agrees that Pritzker’s graduated income tax plan is the best way to go. Indeed, some assert that increased taxes will make current problems worse.
The people of Illinois will hear spirited arguments on both sides of the equation in the months leading up to November 2020 election. But many other things also will be happening between now and then that make forecasts like these interesting, but certainly not dispositive, about what lies ahead.