Illinois state spending has grown 3x population plus inflation since 1990

Some individuals would have you believe that Illinois has a “revenue problem” – that the state needs to increase taxes again because it doesn’t have enough money in its coffers. But don’t be fooled; Illinois’ revenue is at an all-time high. The Illinois comptroller reported that Illinois’ fiscal year 2012 revenue was $68.6 billion. Even...

Some individuals would have you believe that Illinois has a “revenue problem” – that the state needs to increase taxes again because it doesn’t have enough money in its coffers. But don’t be fooled; Illinois’ revenue is at an all-time high.

The Illinois comptroller reported that Illinois’ fiscal year 2012 revenue was $68.6 billion. Even after adjusting for inflation, that’s more money than the state has ever taken in.

The rapid growth in income tax revenue is a significant driver of the state’s record amount of resources. In fact, Illinois recorded the nation’s largest increase in personal income tax collections last year.

The Wall Street Journal reported that “revenue from income taxes in Illinois was up almost 40% last year. That’s because state legislators approved a massive tax hike in 2011 to ease Illinois’ budget woes.”

Between 1994 and 2012, revenue from personal and corporate income taxes alone increased by 104 percent after adjusting for inflation. Even before the Great Recession and the subsequent record tax hike, Illinois’ income tax revenue had grown by 46 percent since 1994 after adjusting for inflation.

The truth is Illinois has a spending problem. State spending has grown three times faster than population plus inflation since 1990. A responsible spending limit tied to inflation and population growth could have prevented the state’s many crises.

But political unwillingness to reform coupled with the push for even higher income taxes will only perpetuate Illinois’ spending problem. And there will never be enough income tax revenue to satisfy politicians who believe the only solution to Illinois’ problems is even more government.