Illinois Economy Hampered By Low Consumer Spending
Illinois government has been collecting a lot less money since an income tax rollback took effect at the beginning of last year. On Tuesday, officials warned that problems in the broader economy could make things even worse.
Jim Muschinske, a non-partisan budget analyst, says Illinois sales tax collections have been mostly flat. That’s surprising, because with the tax cut, people ought to have more money to spend. The thing is — they’re just not spending it.
“When the consumer starts to fade, bad things typically follow," Muschinske says.
He says when you combine slower spending with the epic drop in gas prices, Illinois is expected to lose $230 million in sales taxes. To put that in context: $230 million is more than Illinois normally spends on Chicago State, Eastern, Western and Northern Illinois universities, combined.
Overall, tax revenue for the current budget year could be off by more than $440 million — putting the possibility of a balanced budget that much more out of reach.