Illinois
Illinois is leaving money on the table with structurally unsound tax policy
The Illinois General Assembly just enacted a $55.2 billion General Fund budget for the upcoming 2026 fiscal year. A sizable chunk of that budget, $16 billion, covers mandatory spending obligations Illinois is required to pay either by law, such as debt service owed to bond holders, or contract, like health insurance for state workers. That leaves around $39 billion for services, over 94% of which goes to education, health care, social services and public safety, the core services families rely on across Illinois.
Most of the commentary since the budget passed has highlighted one of three things: what the incremental increases were for various items, like the state’s school-funding formula, which got $307 million instead of the $350 million originally proposed; what got cut, like $330 million in health care for noncitizens between the ages of 42 and 64; or what didn’t get addressed at all, like the $771 million fiscal cliff facing the Regional Transportation Authority. Certainly, this short-term stuff matters. That said, it doesn’t paint a complete picture of state finances.
For instance, while the $307 million bump for K-12 is welcome, the shortfall in what the evidence shows every school needs to provide an adequate education to all students will grow from $2.6 billion this year to $2.7 billion next year. Meanwhile, fiscal year 2026 appropriations for higher education will be around $2 billion, or 42% less, in real, inflation-adjusted dollars than they were 26 years ago. In fact, while year-over-year spending will increase slightly, total FY 2026 General Fund appropriations for the four core services are 12% less in real, inflation-adjusted terms than they were back in FY 2000.
Despite cutting real spending on services for decades, the state still couldn’t balance its FY 2026 budget without bumping a number of taxes and fees by $482 million, sweeping some $237 million from other state funds, not making a $171 million scheduled transfer to the Road Fund, and creating a tax amnesty program to raise a quick $228 million.
So why does Illinois, which has an economy of over $1 trillion, the fifth largest of any state, have to manufacture a combined $1.1 billion in revenue to balance its budget, even though real spending on services will be less next year than at the start of this century?
No short-term budgetary analysis will explain that. However, a review of the long-term data does. And that data shows the Illinois General Fund has a structural deficit. A structural deficit exists when over time, tax revenue growth doesn’t support the inflationary cost of maintaining the same level of public services from year to year. The long-term data also shows that flawed tax policy caused this structural deficit, and those policy flaws are clear: Neither of Illinois’ two primary revenue sources — the income and sales taxes — are designed to respond to the modern economy. This has created a tax system that’s both unsound and unfair.
Start with the Illinois sales tax, which applies primarily to purchase of goods, not services. That’s a losing proposition, given that the sale of goods accounts for just 17% of state gross domestic product, while the sale of services accounts for 74%. Failing to levy sales taxes on most of the largest and fastest-growing segment of the economy means the revenue it generates can’t grow with the economy. Fixing that requires assessing the Illinois sales tax to the purchase of all consumer services, like neighboring Iowa and Wisconsin do. That reform would generate over $2 billion in new revenue.
Then there’s the income tax, which is supposed to create some tax fairness and respond to how income growth is actually shared among taxpayers over time. Since 1979, the real incomes of the bottom 10% of earners has declined. Folks in the middle realized a modest 8% growth in income, while the wealthiest 10% saw their incomes jump by 30%. So to respond to reality and tax people fairly, the income tax should vary with ability to pay, by imposing higher tax rates on higher levels of income and lower rates on lower levels of income.
Except the Illinois income tax can’t, because the state Constitution requires utilization of only one, flat rate. To fix this, the state’s flat income tax rate should be increased by 1.5 percentage points, to 6.45%. That’s enough to generate about $4.4 billion in net new revenue, after covering the cost of implementing a new, refundable tax credit to offset the impact of the aforesaid tax increases on low- and middle-income families. Collectively, these reforms would eliminate the structural deficit, while simultaneously making state tax policy fairer for people.
Bottom line: Getting Illinois’ fiscal house in order is the only way to fund core services sustainably over time, and getting there requires aligning Illinois tax policy with today’s economy.
Ralph Martire is executive director of the Center for Tax and Budget Accountability, a nonpartisan fiscal policy think tank, and the Arthur Rubloff professor of Public Policy at Roosevelt University.
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Illinois
PPP Loan Scandal Busts Joliet Woman Working For Illinois Department Of Corrections: AG Kwame Raoul Reveals
JOLIET, IL —Attorney General Kwame Raoul issued a press release on Monday is alleging a Will County woman fraudulently received a Paycheck Protection Program (PPP) loan for more than $20,000 while employed by the Illinois Department of Corrections.
The Attorney General’s office charged Jamilah Franklin, 48, of Joliet, with one count of loan fraud of more than $10,000, a Class 2 felony punishable by up to seven years in prison; and three counts of forgery, Class 3 felonies punishable by up to five years in prison. Sentences are ultimately determined by the court. Franklin’s first court appearance is June 18.
“Federal assistance programs served as a lifeline for small businesses and unemployed Americans during the COVID-19 pandemic, and it is unacceptable that government employees would abuse that vital support,” Raoul said. “I will continue to collaborate with other agencies to hold public workers accountable for abusing these programs.”
Attorney General Raoul’s office alleges Franklin was employed by the DOC as a lieutenant when she fraudulently applied for a PPP loan from the U.S. Small Business Administration by falsely claiming she owned a business. According to Raoul’s office, Franklin received $20,516 in 2021 as a result.
The Attorney General’s office is prosecuting this case based on a referral by the Office of Executive Inspector General and following an investigation by the Illinois State Police Division of Internal Investigation.
“The Illinois State Police pursues any state employee committing criminal behavior and will continue to work with Attorney General Raoul’s office to hold employees accountable and ensure justice,” said ISP Director Brendan F. Kelly.
Raoul’s office has prosecuted dozens of individuals for PPP loan fraud and referred other investigations to the appropriate state’s attorneys for further evaluation.
Deputy Chief Jonas Harger is prosecuting the case for Raoul’s Public Integrity Bureau.
Illinois
Thousands of birds could migrate over the Chicago area this week, and here’s how to protect them
Thousands upon thousands of birds are expected to cross over Illinois as part of their spring migrations in coming days.
Thursday night saw the highest migration totals of the season so far, but researchers at Cornell believe that Sunday and Monday nights could see even more avian traffic in the skies over the Chicago area, with hundreds of thousands of birds expected to traverse the area.
According to estimates from Birdcast, Sunday night and into Monday morning there could be “medium” activity for migrating birds, with thousands of birds per kilometer flying over the area.
Even more birds are expected to take flight Monday night and into Tuesday morning thanks to favorable weather conditions, with a “high” number of birds expected to take to the skies over the Chicago area.
According to estimates, up to 383 million birds could be in flight over the central United States during the peak of the migration overnight.
On Thursday night the Chicago area experienced its busiest night of the spring migration season so far, with more than 367,000 birds having been estimated to have passed over Cook County alone.
In all, more than 23,000,000 birds are believed to have crossed the state of Illinois so far during the spring migration.
Among the primary birds expected to be flying through the area are American Redstarts, Magnolia Warblers, Baltimore Orioles and Indigo Buntings, according to researchers at the CornellLab.
As millions of birds continue visiting the Chicago area, here are some steps that residents can take to keep them safe.
When do birds typically migrate?
Peak migration for birds over the state of Illinois occurs in mid-to-late May, with hundreds of different species heading north for the summer breeding season.
Those migration flights for songbirds and other species typically take place in the overnight hours. According to experts, birds typically take flight 30-to-45 minutes after sunset, with the greatest number of birds in flight typically seen approximately two-to-three hours later.
When should residents turn lights off?
One of the best ways to help protect birds is to turn off lights during peak migration times.
According to Birdcast, the best time to turn off or dim exterior lights and interior lights is between the hours of 11 p.m. and 6 a.m., when most birds are active.
Bright lights can disorient and attract birds, making them vulnerable to collisions and to predators on the ground, according to the website.
Hundreds of millions of birds are killed each year in collisions with buildings, and residents and businesses are being asked to do their part to keep the creatures safe.
In addition to turning off unneeded exterior lights, residents and businesses are also asked to dim or turn off lights in lobbies, and to draw blinds to help keep light from escaping through windows.
Finally, exterior lights should be aimed downward and be well-shielded so that birds aren’t attracted to them.
Are there other steps?
Another key step in protecting birds is to bring pet cats inside during overnight hours.
According to the American Bird Conservancy, cats kill an estimated 2.4 billion birds in the United States every year, and during migration season those impacts can be even more devastating, as exhausted birds typically seek refuge in plants and trees to rest on their journeys, making them vulnerable to attack.
Since cats like to hunt at night, active migrating birds can be a target, leading to experts asking residents to keep animals inside when possible.
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