Illinois Taxpayers Work One-Third of the Year for Government

View as PDF Chicago—April 29 marks Tax Freedom Day for Illinoisans, indicating the point in 2016 when taxpayers stop laboring to fund local, state, and federal governments with their taxes and finally begin to keep their hard-earned money.
“Illinois ranks 44th for its Tax Freedom Day in 2016, one of the latest in the nation” said Jared Labell, director of operations for Taxpayers United of America (TUA). “Sadly, Illinois appears near the bottom of the list this year, but that’s unsurprising as its 7,000 taxing bodies have transformed the Prairie State into the Government State.”
“Tens of thousands of taxpayers became Ex-Illinoisans since the temporary state income tax increase in 2011. That’s no coincidence. The U.S. Census Bureau data correlates with Tax Freedom Day falling later in Illinois annually as the tax burden for Illinois residents grows exponentially,” said Labell.
For Illinois taxpayers, Tax Freedom Day has been a day of mourning in recent years, occurring on April 15 in 2011, April 23 in 2012, April 25 in 2013, April 28 in 2014, and April 30 in 2015. The fact that Illinoisans are working for the government one day less this year can be attributed to the rollback of the temporary state income tax at the start of 2015, following the election of Gov. Bruce Rauner (R), but other local tax increases across the state prevented a better ranking.
According to the Tax Foundation’s annual “Tax Freedom Day” report for all 50 states, plus Washington, D.C., nationwide Tax Freedom Day fell on April 24, representing how long Americans have to work in order to pay the nation’s tax burden. However, if annual federal borrowing is included in the calculation, therefore factoring in future taxes owed, Tax Freedom Day would be pushed back more than two weeks to May 10.
By far, taxpayers will work the longest to pay local, state, and federal individual income taxes, totaling 46 days. Americans will pay $3.34 trillion in federal taxes in 2016 and an additional $1.64 trillion in state and local taxes, for an astonishing total tax bill of $4.99 trillion, or 31 percent of national income, according to the report. Americans will send more tax dollars to the government in 2016 than they will spend on food, clothing, and housing combined.
“Illinois is facing a $10 billion budget shortfall by this summer. The state has the lowest credit ratings nationwide and by far the worst-funded government pension system. Illinois has recorded fourteen straight years of budget deficits and is about to enter its eleventh month without a state budget,” said Labell. “The real question for Illinois taxpayers is simple. Taxes are revolting, so why aren’t you?”

Madison Record|No exit strategy from Illinois budget standoff

Director of Operations for Taxpayers United of America’s, Jared Labell, had his letter to the editor about Illinois’ budget featured by Madison Record.

To the Editor:
Eight members of Illinois’ General Assembly met on Monday at a forum to discuss the state’s prolonged budget impasse. Although the legislators agreed in general that reforms are necessary to break Illinois’ budget gridlock – now in its 10th month – there was no indication that the Illinois General Assembly, or these officials in particular, had formed a clear exit strategy.

The Illinois Budget: Defining & Funding the Essential Priorities, organized by The Illinois Campaign for Political Reform and Truth in Accounting, featured Representatives Bellock (R), Crespo (D), Davis (D), Harris (D), Morrison (R), and Pritchard (R), as well as Senators Murphy (R) and Steans (D).
Sen. Murphy and Rep. Morrison both called for amending the Illinois Constitution’s government-employee pension protection clause to solve the state’s towering unfunded government pension liabilities, which was the best measure offered at the forum, although also the one with the greatest difficulty to pass. The most worrying proposals for taxpayers were only abstract, and the suggestions varied, including increasing sales taxes or expanding the sales tax base, a graduated state income tax, hiking the state income tax, and imposing a new income tax on retirement benefits.
Tax hikes, however, will only worsen Illinois’ economic standing at a time when there is an opportunity for systemic reform of the state government.
It’s commendable for these members of the Illinois General Assembly to voice their concerns over the broken budgeting process in Springfield and speak out against their leadership. But words cannot compare to the very concerning numbers facing Illinois taxpayers, like a $10 billion deficit by summer, Illinois recording its 14th straight budget deficit, and the lowest credit ratings and the worst-funded government pension system in the country.
As related by the legislators, the degeneration of politics in Springfield is alarming, yet unsurprising; like a low-intensity conflict of news conferences, press statements and canceled meetings since Governor Pat Quinn (D) was thrown out of office by Illinoisans in favor of Bruce Rauner. The two entrenched sides, Speaker of the Illinois House Michael Madigan (D) and Governor Bruce Rauner (R), are both steadfast in their opposition to the other.
“I think this has been portrayed largely as a battle of wills between the governor and the speaker,” said Sen. Murphy. “And the reason for that is because it largely is,” drawing laughs from the crowd.
Madigan is protective of the political machine he has built while pillaging Illinois taxpayers for the last half-century, so he is willing to play hostage-taker over the budget with the constituency groups he has fostered, from teachers and colleges to government employees and social services organizations. But Rauner is willing to play the long-game, too, and seems quite ready to stake his governorship on reversing decades of cronyism and mismanagement throughout Illinois’ state government.
Taxpayers must be vigilant in holding members of the Illinois General Assembly accountable, especially at this unprecedented time without a state budget and as we approach the new fiscal year. Now is the time that legislators could propose the most dangerous solutions to the state’s financial crises, including hiking the state income tax or imposing a new, devastating income tax on retirement benefits.
If this forum was any indication of what’s currently happening – or not – in Springfield, then Illinois taxpayers should be distressed. There is no consensus developing to solve the budget impasse. The FY2016 gridlock could possibly be prolonged past the November elections and well into the FY2017 budget battle. All sides are at a standoff and there is no exit strategy, so taxpayers must make their voices heard and the politicians in Springfield react.
Jared Labell
Taxpayer Education Foundation

Alton Daily News|Tax On Drivers Postponed

Director of Operations at Taxpayers United of America’s, Jared Labell, was quoted by Alton Daily News about I Ride.

Amid an outpouring of angry reactions about a measure to tax Illinois drivers by the mile, Illinois Senate President John Cullerton, D-Chicago, says he won’t advance his proposal.
Cullerton took to social media late Friday to make the announcement.
“I filed legislation to start discussion and debate and get feedback on how the state could replace the gas tax. I’ve received a lot of constructive feedback that will help shape future policies. I do not intend to move forward with SB 3267,” Cullerton wrote.
Taxpayers United of America Director of Operations Jared Labell said he understands the frustration from Illinois commuters and that the bill would have been highway robbery.
“I think taxpayers are very motivated right now to push back,” Labell said. “Hopefully, as lawmakers in Springfield fight about the budget impasse, taxpayers can really make an impact now as things are coming to a head.”
Labell said taxpayers are beginning to make their voices heard.
“Sometimes they won’t react to a half-a-billion-dollar property-tax increase, but taxpayers and people in general will see these other little taxes and start to connect the dots and see how one tax increase leads to another,” Labell said.
A similar tax bill proposed by state Sen. Heather Steans, D-Chicago, would have raised the gas tax by 30 cents and would have included a vehicle-miles tax. Steans’ bill was postponed April 14.