ILLINOIS TAX FACTS

by Maurice Scott Executive Vice President Taxpayers' Federation of Illinois

(Editors Note: The following are excerpts from the Newsletter of the Taxpayers' Federation of Illinois.)

Four Constitutional amendment proposals to permit increases in the current corporate State income tax rate without simultaneous increases in the personal income tax rate were rejected by the House Revenue Committee on March 3 by a vote of 13 to 5. Current laws provide for a 4% tax on corporate income and a 2.5% rate on income of individuals, and future increases must retain this 8 to 5 ratio on rates. Defeat of these proposals by the House Revenue Committee is one of the best things the General Assembly can do in 1976 for the economy. What Illinois business climate needs is more jobs, not higher costs and the movement of business from Illinois.

Do corporations pay their fair share of total State income tax receipts? The answer is "yes" when the percentage of the total paid by Illinois corporations is compared to percentages paid by corporations to treasuries in other States. In fiscal year 1975 Illinois corporations paid 21% of the total, Indiana 16%, Iowa 15%, Kentucky 32%, Michigan 21%, Minnesota 19%, Missouri 15%, Ohio 36%, and Wisconsin 15%.

S.J.R. 60, a State Constitutional amendment proposal that would return Illinois to biennial budgeting in 1979, was favorably passed out of Senate Executive Committee on March 2. The mechanics of the resolution are these for 1979, providing the resolution is successful in the Legislature and approved by the voters in November 1976: (1) The General Assembly would convene to organize on January 10, 1979 and the session would only hear bills relating to appropriations and State revenue; (2) On February 7, 1979, the biennial budget for fiscal years 1980 and 1981 is submitted by the Governor to the Legislature, and the appropriation bills would be introduced on the same date; (3) From February 7, 1979 to April 25, 1979, the General Assembly would consider and enact appropriation and State revenue bills. Budget session adjourns on April 25, 1979; (4) By May 9, 1979, the General Assembly shall present all such bills to the Governor; (5) By June 8,1979, 30 days after the General Assembly reconvenes to consider its action on vetoed bills; (7) By June 25, 1979, the budgetary process will have been completed; (8) The even-year general session would convene January 9, 1980 for consideration and enactment of bills other than those making appropriations or those relating to State revenue.

Merits of this resolution seem to be: (1) Legislators and their staffs would have more time to analyze budget and appropriation bills; (2) Directors of departments and agency heads would have more time to spend on administrative duties; (3) Pressures for more spending could be less because of less opportunity to push such bills; (4) Legislators would have more time to spend back in their districts listening to their constituents; and (5) There would be more stability for lawyers, public officials and citizens in knowing what the law is.

This resolution and S.J.R. 26 and other similar proposals deserve serious study and consideration by the General Assembly.

Illinois Parks and Recreation 19 May/June, 1976