President Cullerton Civic Federation presentation.
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President Cullerton Civic Federation presentation.
- 2. What we’ll discuss • Some of the successes we’ve had despite the economic downturn • The state of the current budget • And what path we can take in the upcoming budget year
- 5. What Illinois Encountered • Climbing Pension Costs Due to 1995 Pension Law and 2008 Market Collapse • More People Qualifying for Entitlement Programs Like Medicaid
- 7. Pension Cost as % of Total GRF Spending
- 9. Growth in Unfunded Pension Liability
- 10. Growth in Unfunded Pension Liability: Impact of Market Collapse
- 11. Medicaid Full Benefits Enrollment
- 12. Medicaid Full Benefits Enrollment – Type of Enrollees
- 15. State and Federal Contributions to the Medicaid Program Including Federal Match Rate
- 16. What Did the 2011 Tax Increase Do? • Purpose: Budget Stabilization and Correcting the State’s Structural Deficit • Increased for four years the State’s personal income tax rate by 2 percentage points • Increased for four years the State’s corporate income tax rate by 2.2 percentage points
- 17. 2011 Budget Stabilization Plan Personal Corporate Income Tax Income Tax Rate Rate Prior Rate 3.0% 4.8% 2011-2014 5.0% 7.0% 2015-2024 3.75% 5.20% 2025 3.25% 4.80%
- 18. History of Illinois Individual Income Tax • 1969: Gov. Ogilvie Creates a State Income Tax at a 2.5% Rate • 1983: Gov. Thompson Raises the Rate to 3%; the Rate returns to 2.5% in 1984 • 1989: Gov. Thompson Approves Another Temporary Increase to 3%; the Rate was Expected to Fall to 2.75% by 1993 • 1993: Gov. Edgar Makes a Permanent Increase in the Rate to 3%
- 19. How Illinois Compares to Midwestern States Personal Personal Tax Corporate Corporate Tax Income Rates Income Rates Brackets Brackets ILLINOIS Flat 5.0% (through Flat 7.0% (through 2014) 2014) Wisconsin 5 4.6% to 7.75% Flat 7.9% Indiana Flat 3.4% Flat 8.5% Iowa 9 0.36%-8.98% 4 6%-12% Missouri 10 1.5%-6% Flat 6.25% Kentucky 6 2%-6% 3 4%-6% Michigan Flat 4.35% Flat 4.95% Minnesota 3 5.35%-7.85% Flat 9.8% Ohio 9 .587%-5.925% Flat 0.26%
- 20. States with Graduated Rates and Gross Receipts Taxes • Wisconsin: Income over $10,180 is taxed at 6.15% and up • Iowa: Income over $13,221 is taxed at 6.12% and up • Missouri: Income over $9,000 is taxed at 6.0% • Kentucky: Income over $5,000 is taxed at 5.0% and up • Ohio: Income over $102,100 is taxed at 5.451% and up • Michigan and Ohio charge a form of a Gross Receipts Tax on corporate income
- 21. How Illinois Compares to Midwestern States • Indiana, Iowa, Kentucky, Michigan, Missouri and Ohio Allow Local Governments to Charge an Additional Local Personal Income Tax Rate • Illinois Remains the Only State Listed That Does Not Tax Retirement Income
Editor's Notes
- The law that took effect is designed to not really kick in until FY 11 and unfortunately the collapse of the markets in 2008 precipitated a spike in the pension contribution.