ralph martire slide show 4 14-11
TRANSCRIPT
© 2011, Center for Tax and Budget Accountability
1
CENTER FOR TAX AND BUDGET ACCOUNTABILITY70 E. Lake Street Suite 1700 Chicago, Illinois 60601 direct: 312.332.1049 Email: [email protected]
Tax Increases, Spending Caps
and the FY2010 General Fund Budget in Illinois
For:
Campus Facility Association
University of Illinois (Urbana-Champaign)
UIUC YMCA
1001 S. Wright Street, Champaign, IL
Presented by:Ralph Martire, Executive Director
Thursday, April 14, 2011; 4:00 pm
© 2011, Center for Tax and Budget Accountability
2
Illinois’ Worst Fiscal Crises Since Great DepressionTh
e S
tart
ing
Poin
tRevenue Shortfall Entering FY2012
Without the January, 2011, Tax Increases (i) Revenues Amount*
Projected State Own Source Revenue (pre-tax increase) $20.026 B
Projected Federal Revenue $ 4.844 B
Other Projected Transfers In $ 1.810 B
TOTAL FY2012 PROJECTED REVENUE (without the tax increase)
$26.680 B
(ii) Hard Costs Entering FY2012
Carry Forward Unpaid Bills from FY2011 $6.05 B**
One-Time Revenue Used in FY2011 $3.00 B
Debt Service FY2012 $2.137 B
Pension Payment FY2012 $4.829 B***
Transfers Out FY2012 $2.317 B
SUBTOTAL HARD COSTS $18.333 B
(iii) Cost of Flat Funding Nominal Dollar Amount of FY2011 GF Appropriations for Services in FY2012
$24.313 B
(iv) TOTAL FY2012 REVENUE NEEDED TO PAY HARD COSTS & MAINTAIN FLAT FUNDING OF SERVICES
$42.646 B
(v) INITIAL FY2012 REVENUE SHORTFALL (Before 1/13/2011 tax increases)
(-$15.966 B)
* All data from the FY2012 Budget Book and GOMB 1/20/2011 plan, except as noted in *** below.
** FY2012 Budget Book, Chap. 2-14, Footnote 3
*** The pension contribution is from the March 10, 2011, update to the “Supplemental Digest to Retirement Systems’ Audits” issued by the State Auditor General.
© 2011, Center for Tax and Budget Accountability
3
Causal Factors
•Flawed Tax Policy• Irresponsible Fiscal
practices•The “Great Recession”
of 2008-2009
PR
OP
ER
TY
TA
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IAN
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PR
OP
ER
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Th
e S
tart
ing
Poin
t
© 2011, Center for Tax and Budget Accountability
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Knowing this, Springfield Passed The Taxpayer Accountability
and Budget Stabilization Act (P.A. 96-1496), which:
1.Raises Taxes
2.Limits Spending
© 2011, Center for Tax and Budget Accountability
5
New Annual Revenue Under P.A. 96-1496
Item New Annual Revenue to
General Fund Inc rease Personal Income Tax Rate from 3% to 5% $6.05 B
Increase Corporate Income Tax Rate from 4.8% to 7% $770 M
Decouple from the Federal Repeal of the Estate Tax $182 *
Temporarily Suspend the Net Operating Loss Carry Forward for Corporations $250 M
Annual Net to General Fund $7.252 B **
* In FY2013 and FY2014, GOMB increases this estimate to $240 M.
**NOTE: in FY2011 GOMB estimates the aforesaid tax increases will generate $2.88 B in new General Fund revenue.
© 2011, Center for Tax and Budget Accountability
6
Capitalist Tax Policy Should Be:
FAIR PROGRESSIVE
RESPONSIVE TO MODERN ECONOMY
STABLE DURING POORECONOMIES
EFFICIENT DOESN’T DISTORTPRIVATE MARKETS
EL
EM
EN
TS
OF
A S
OU
ND
AN
D
EL
EM
EN
TS
OF
A S
OU
ND
AN
D
FA
IR F
ISC
AL
SY
ST
EM
FA
IR F
ISC
AL
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ST
EM
WHY DID ILLINOIS NEED A TAX INCREASE?
BUT ILLINOIS ISN’T
© 2011, Center for Tax and Budget Accountability
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ST
RU
CT
UR
AL
DE
FIC
ITS
TR
UC
TU
RA
L D
EF
ICIT
WHICH CREATES:Illinois Structural Deficit
Assuming FY2000 to FY2008 Economic Conditions and FY 2000 Balanced Budget Appropriation (adjusted for Inflation and Population Growth)
© 2011, Center for Tax and Budget Accountability
8
That $15.9 B shortfall entering FY2012 was a real problem
because……Over $9 out of $10 of G.F. are spent on:
• Education (k-12, plus Higher Ed) 35%
• Healthcare 30%
• Human Services 21%
• Public Safety 5% 91%
HIS
TO
RIC
AL
LY
:
HIS
TO
RIC
AL
LY
:
© 2011, Center for Tax and Budget Accountability
9
But why’d Illinois Raise Taxes Rather than Cut
Spending?
© 2011, Center for Tax and Budget Accountability
10
IS I
LL
INO
IS P
RO
FL
IGA
TE
?IS
IL
LIN
OIS
PR
OF
LIG
AT
E?
WELL - - - - - -The ongoing Deficit Problems were Not Caused by Wasteful Spending
Categor y FY 2000 Actual
FY2000 Adjusted to FY2011 for CPI &
Population
FY2011 Enacted
Difference FY2000 -FY2011 CPI &
Population
FY2000 -FY2011 ECI &
Population
Difference FY2000 -FY2011 ECI &
Population
Gener al Fund
$21.29 B $28.46
-Pension (- $1.23 B) (- $3.520)
Gener al Fund/Cur r ent Ser vices
$20.06 B $26.29 $24.94 (-$1.348 B)
(-5.1%)$29.98 B (- $5.035 B)
(-16.8%)
*NOTE: That after accounting for Inflation and Population Growth, the FY2011 GF of $24.94 B was 5% less than GF spending in FY1995, under Governor Jim Edgar
© 2011, Center for Tax and Budget Accountability
11
HE
AD
CO
UN
TH
EA
DC
OU
NT
© 2011, Center for Tax and Budget Accountability
12
AS FOR HEALTHCARE, WELL…….
Medicaid spending by Funding Source(Federal, State and Local)
© 2011, Center for Tax and Budget Accountability
13
Amount by Which Illinois General Fund State Spending on Human Service Programs Falls Short of Keeping Pace with Inflationary
Costs and Population Growth From FY2002 to FY2010
($393) ($413)($384)
($457) ($454) ($434)
($168)
($377)
($33)
($68) ($105)
($145)($186) ($235)
($270)
($310)
($800)
($700)
($600)
($500)
($400)
($300)
($200)
($100)
$0
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY2010
(mil
lio
ns)
By failing to account for annual inflationary costs, Illinois cut human service funding in real terms by a cummulative $3.1 B from FY2003 to FY2010. By failing to account for population growth, Illnois further shorted human service funding by approximately $1.4 B from FY2003 to FY2010. In total, state funding of human services over this period was approximately $4.4 B less than what was needed to maintain FY2002 service levels, adjusting for inflation and population growth.
Note: Commission on Government Forecasting and Accountabiity, Budget Summaries for FY2002 to FY2010. Final General Revenue appropriations for the Illinois Departments of Aging, Children & Family Services, and Human Services. Appropriations shortfalls necessary to maintain real value of FY2002 appropriation based on Mid-West CPI (MWCPI). MWCPI for FY2010 is assumed to be 0%, in all likelihood understateng the shortfall. Population growth estimate from Illinois Department of Commerce and Economic Opportunity. Key: Red Bar - MWCPI Shortfall; Blue Bar - Population Adjustment Shortfall
THE REAL IMPACT: $4.4 BILLION LOSTH
UM
AN
SE
RV
ICE
SH
UM
AN
SE
RV
ICE
S
© 2011, Center for Tax and Budget Accountability
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CORPORATE TAX RATES
Who’s Gonna Move?
Illinois: 7% until 2015, then 5.25%
Midwest Big States Iowa: 6 – 12% (12% @ $250,000) Pennsylvania: 9.99%
Indiana: 8.5% New Jersey: 9%
Wisconsin: 7.9% California: 8.84%
Missouri: 6.25% New York: 7.1%
Kentucky: 4.6% Florida: 5.5%
Michigan: 4.9%
CO
RP
OR
AT
E T
AX
RA
TE
SC
OR
PO
RA
TE
TA
X R
AT
ES
© 2011, Center for Tax and Budget Accountability
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IL State Own-Source Revenue Under Neighboring State Revenue Shares FY2008 Current $ Billions
State Own-Source Revenue as a
Percentage of Personal Income
Increase or Decrease in IL GF Revenue if Illinois Had Equal State-Based Tax Burden as a Percentage of State Income
Illinois 7.6%
Indiana 9.7% + $11.16 B
Iowa 9.7% + $11.16 B
Kentucky 10.7% + $16.48 B
Missouri 7.6% $0
Wisconsin 10.1% + $13.29 B
Sources: 1) 2008 State Revenue as a Percentage of Personal Income, Federation of Tax Administrators, updated July 19, 2010. 2) Increases based on BEA 2008 Illinois Personal Income of $531.591 B
Meanwhile, Pre-Tax Increase
© 2011, Center for Tax and Budget Accountability
16
Meanwhile, “Post-Tax Increase”
Share Own-Source Revenue as a Percentage
of Personal Income
Increase or Decrease in IL GF Revenue Revenue if Illinois Had Equal State-Based Tax Burden as a
Percentage of State Income
Illinois* 8.8%
Indiana 9.8% $5.5
Iowa 9.7% $5.0
Kentucky 10.7% $10.5
Missouri 7.6% ($6.7)
Wisconsin 10.1% $7.2
2) Increases based on BEA 2008 Illinois Personal Income.
* This overstates the actual new tax burden.
Sources:
IL State Own-Source Revenue Under Neighboring State Revenue Shares FY 2008 Current $ Billions After Passage of
the 2011 Tax Increase
1) 2008 State and Local Revenue as a Percentage of Personal Income, Federation of Tax Administrators, updated July 19, 2010.
© 2011, Center for Tax and Budget Accountability
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SPENDING CAPS LIMIT OF 2% GROWTH, YEAR-TO-YEAR
Fiscal Year Total CAP Increment Available
Under CAP 2012 $36.82 B ----- 2013 $37.55 B $730 M 2014 $38.31 B $760 M 2015 $39.07 B $760 M
*NOTE: ALL numbers have been rounded up or down to the ten million dollar line
LOOKING FORWARD. . . .
© 2011, Center for Tax and Budget Accountability
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Projected Annual Revenue Shortfalls Under Spending Caps
(Current $ in Billions)
Revenues 2012 2013 2014 2015 State Own Source 1 $22.18 $22.34 $22.98 $23.39 Federal 1 $4.84 $5.13 $5.44 $5.77
Individual Income Tax 2 $6.05 $6.22 $6.39 $2.40 Corporate Income Tax 3 $0.77 $0.80 $0.84 $0.17 Estate Tax 4 $0.18 $0.24 $0.24 $0.24 Suspension of Net Operating Loss Carryover 4 $0.25 $0.25 $0.25 $0.25 Loss of Federal Medicaid Match 4 ($0.20) ($0.30) ($0.40) ($0.40) Loss of Tobacco Litigation Proceeds 4 ($0.14) ($0.14) ($0.14) ($0.14)
Total Revenue projected to be available 5 $33.93 $34.55 $35.61 $31.68
Annual Spending Caps $36.82 $37.55 $38.31 $39.07
Annual Revenue Shortfall ($2.89) ($3.00) ($2.70) ($7.39) Notes: See Appendix
Which is Funny — Because:
© 2011, Center for Tax and Budget Accountability
19
Estimated FY 2012 Revenue with Tax Increase
$7.3
Bil
lion
in N
ew R
even
ue
$7.3
Bil
lion
in N
ew R
even
ue
from
Tax
In
crea
sefr
om T
ax I
ncr
ease
Projected FY2012 Revenue ($ in Millions)
Revenue Source FY2012 GOMB Estimate from Budget Book
(i) Without 1/13/2011 Tax Increase
Pre-Existing Own-Source Revenue $20,026 *
Transfers In ** $1,810
Federal Sources $4,844
Subtotal State AND Federal Sources Before 1/13/2011 Tax Increases
$26,680
(ii) New Revenue from 1/13/2011 Tax Increases
Increase in Individual Income Tax Rate from 3% to 5% $6,050
Increase in Corporate Income Tax Rate from 4.8% to 7% $770
Decoupling from Federal Repeal of Estate Tax $180***
Temporary Suspension of Net Operating Loss Carry-forward for Corporations
$250
Subtotal of New Revenue $7,250
(iii) Total FY2012 Revenue from All Sources $33,930
* Total Own-Source Revenue calculation based on reconciliation of the FY2012 Budget Book and Governor’s Spending Plan published on January 20, 2011.
** Transfers-In include items such as Lottery and Gaming.
*** GOMB estimates that this amount will increase to $240 M annually in FY2013 and FY2014.
**** Note, Figure 2 does not include any debt proceeds from the proposed bond issuance filed under SB 3, because that bill has not passed.
Which Brings us to FY2012
© 2011, Center for Tax and Budget Accountability
20
Despite Recent Tax Increase, The FY 2012 Budget has an Operating Revenue Shortfall
of over $ 1 Billion
Bu
t a R
emai
nin
g O
pera
tin
g B
ut a
Rem
ain
ing
Ope
rati
ng
Def
icit
of
Ove
r $
1 B
illi
onD
efic
it o
f O
ver
$ 1
Bil
lion
FIGURE 3 FY2012 Operating Deficit Walk Down
($ in Millions) Category Amount*
(i) Spending
General Fund Appropriations for Current Services
$25,931
Pension Payments** $4,829
Statutory Transfers Out *** $2,317
Pension Obligation Bonds $1,559
Capital Projects Debt Service $578
Total Proposed Expenditures
$35,214
(ii) Total Projected Revenue $33,930
(iii) Base Operating Deficit (-$1,284)
* All data from the FY2012 Budget Book, except pension payments.
** This pension contribution amount is from the March 10, 2011, update to the “Supplemental Digest to Retirement Systems’ Audits” issued by the State Auditor General.
*** Statutory Transfers Out include items such as the Local Government Distributive Fund, the Common School Fund, and the General Obligation Bond Retirement and Interest Fund.
© 2011, Center for Tax and Budget Accountability
21
Lack o
f R
even
ue
Sti
ll a
n I
ssu
e
GRF Deficit = $7 Billion
FY2012 Minimum Accumulated Deficit Walk Down ($ in Millions)
Category Amount Deficit as % of
Revenue
FY2012 Proposed Expenditures $35,214
Total Projected Revenue $33,930
Initial Operating Deficit (-$1,284) -3.8%
Carry-Forward Deficit from FY2011 (unpaid bills)
$6.05
TOTAL FY2012 REVENUE SHORTFALL (-$7,334) -21.6%
© 2011, Center for Tax and Budget Accountability
22Hu
man
Ser
vice
s w
ould
su
ffer
$ 4
71 M
H
um
an S
ervi
ces
wou
ld s
uff
er $
471
M
(-8.
7%)
cut i
f F
Y 2
011
$ 26
0 M
su
pple
men
tal
(-8.
7%)
cut i
f F
Y 2
011
$ 26
0 M
su
pple
men
tal
to H
um
an S
ervi
ces
is p
asse
d.
to H
um
an S
ervi
ces
is p
asse
d.
FY 2012 Proposed Nominal Dollar Change from FY 2011
Category FY2012 Proposed
FY2011 Revised (Feb 2011)4
Diff FY2012 Proposed –
FY2011 Revised
% Change FY2011 Enacted Approp
(July 2010) General Fund Excluding Pension $25,931 $24,313 $1,618 6.7% $24,940 PreK-12 Education $7,245 $7,020 $225 3.2% $6,997 Higher Education $2,149 $2,124 $25 1.2% $2,116 Health Care1 $7,749 $7,134 $615 8.6% $7,777 Human Services2 $4,917 $5,128 ($211) -4.1% $4,929 Public Safety3 $1,553 $1,391 $162 11.6% $1,403 Notes: 1) DPH and DHFS
2) Aging, DCFS and DHS 3) Corrections and State Police 4) FY2011 Revised Budget assumes that the Fiscal Stabilization Fund will be replenished and $505 M of interfund borrowing repaid in FY2011.
Source: FY2012 GOMB Proposed Budget Book (2/17/2011)
© 2011, Center for Tax and Budget Accountability
23
Ch
an
ge in
Pro
posed
Gen
era
l R
even
ue F
un
d A
pp
rop
riati
on
s
to H
um
an
Serv
ice A
gen
cie
s Three Agencies Provide Human Services:
Category FY2011 Enacted
FY2012 Proposed $ Change
% Change
Department of Aging $628 $798 $170 27.1%
Department of Child and Family Services $836 $843 $7 0.8%
Department of Human Services $3,663 $3,274 (-$389) (-10.6%)
Total Across Agencies $5,128 $4,917 (-$211) (-4.1%)
Data from GOMB FY2012 Operating Budget
One agency bears all the cuts:
DHS
© 2011, Center for Tax and Budget Accountability
24
In 2
008
Illi
noi
s w
as 1
3th in
per
cap
ita
inco
me
bu
t 34
th in
per
cap
ita
hu
man
ser
vice
s fu
nd
ing Cuts in specific Department of Human
Services Programs
Category FY 2012
Proposed FY 2011 Enacted % Change $ Change
Circuit Breaker Pharmaceutical Credit $0 $24 -100.0% ($24) Addiction Treatment and Services $41 $97 -57.4% ($56) Child Care Services $285 $618 -53.9% ($333) Domestic Violence Shelters $9 $11 -19.2% ($2) Teen Parent Services $1 $3 -51.0% ($1) Mental Health Grants $112 $146 -23.0% ($33)
Total Across Programs $449 $899 -50.1% ($450)
Data Source: GOMB FY2012 Operating Budget.
© 2011, Center for Tax and Budget Accountability
25
Eve
ry M
ajor
Cat
egor
y of
Rea
l E
very
Maj
or C
ateg
ory
of R
eal
Fu
ndi
ng
for
Cu
rren
t Pu
blic
Ser
vice
s F
un
din
g fo
r C
urr
ent P
ubl
ic S
ervi
ces
has
bee
n C
ut S
ince
FY
200
0 h
as b
een
Cu
t Sin
ce F
Y 2
000
Category FY2012 Proposed
FY2000 Adj (ECI and Pop
Growth) 4
Diff FY2012-FY2000 Adj
(ECI and Pop Growth) 4
% Change
General Fund Excluding Pensions
$25,931 $30,829 ($4,898) -15.9%
PreK-12 Education $7,245 $7,443 ($198) -2.7%
Higher Education $2,149 $3,306 ($1,157) -35.0%
Health Care1 $7,749 $8,952 ($1,203) -13.4%
Human Services2 $4,917 $7,066 ($2,150) -30.4%
Public Safety3 $1,553 $2,075 ($522) -25.2%
Notes: 1) Department of Public Health and Healthcare and Family Services(Public Aid in 2000 and 2012)
2) Aging, Department of Children and Family Services and Department of Human Servcies
3) Corrections and State Police
4) Index value for FY2000 has been approximated by using 2001 and 2001 ECI. For Health Care Medical Care Midwest CPI (MCMWCPI) has been used.
Sources: COGFA Illinois State Budget FY2000, and GOMB Illinois State Budget FY2012.
FY 2012 Proposed Appropriations Compared to FY2000 Actual Appropriations Adjusted for Inflation and Population Growth
($ in Millions)
© 2011, Center for Tax and Budget Accountability
26
Accrued Net Unfunded FundedSystem Liability Assets Liability Ratio
TRS $77,293.2 $31,323.8 $45,969.4 40.5%
SERS $29,309.5 $9,201.8 $20,107.6 31.4%
SURS $30,120.4 $12,121.5 $17,998.9 40.2%
JRS $1,819.4 $523.3 $1,296.2 28.8%
GARS $251.8 $54.7 $197.1 21.7%
TOTAL $138,794.3 $53,225.1 $85,569.2 38.3%
($ in Millions)FY 2010
Summary of Financial ConditionState Retirement Systems Combined
Assets at Market Value / Without Asset Smoothing
SOURCE: Commission on Government Forecasting and Accountability. The funded ratios for each of the five State retirement systems may be compared to the aggregate funded ratio of 38.3% for the five systems combined. Although the Judges' Retirement System and the General Assembly Retirement System have the poorest funded ratios, these two systems are much smaller and their unfunded liabilities are thus more manageable than the three larger systems.
FU
TU
RE
PR
ES
SU
RE
SF
UT
UR
E P
RE
SS
UR
ES
© 2011, Center for Tax and Budget Accountability
27
The "Ramp" before the 2008 Economic meltdown!Required Yearly Pension Payments:
FY 2006 - FY 2045
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
$ in
Mill
ion
s
TH
E R
AM
PT
HE
RA
MP
© 2011, Center for Tax and Budget Accountability
28
Making up the Revenue Shortfall By Cutting Services = $ 7.3 B (or 28.3%) cut in $26 B appropriation
Op
tion
s
© 2011, Center for Tax and Budget Accountability
29
JOB
LO
SS
JOB
LO
SS
© 2011, Center for Tax and Budget Accountability
30
Divorced from RealityP
relim
inary
An
aly
sis
of
Illin
ois
S
en
ate
GO
P B
ud
get
Pro
posal
They Claim: “approximately $ 5B in spending reductions and
economic expansion will allow lawmakers to restore the income tax to historic levels.” (p. 2)
Our Analysis Shows:• FY 12 deficit without $7.3 B tax increase was
$16.0 B • Existing state revenue barely covers current
general funds Expenditures – even with the tax increase
• $5B in cuts are not a replacement for $7.3 B in increased revenue and not enough to pay back $16 B in accumulated deficit.
© 2011, Center for Tax and Budget Accountability
31
Proposed Reforms Do More Harm Than Good
Pre
lim
inar
y A
nal
ysis
of
Illi
noi
s S
enat
e G
OP
Bu
dge
t P
rop
osal
They Propose:$1.3 B savings from Medicaid cuts by shifting costs to
recipients and reducing eligibility “to bring Medicaid eligibility into line with the National Average” (p. 10)
Resulting in:• the State forgoing $650 M in federal matching
funds, reducing budget savings• doubling the health care impact of these cuts
to vulnerable Illinoisans.
© 2011, Center for Tax and Budget Accountability
32
Proposed Reforms Do More Harm Than Good
Pre
lim
inary
An
aly
sis
of
Illin
ois
S
en
ate
GO
P B
ud
get
Pro
posal
They Propose:• more $1.35 B “targeted savings” from
pension cuts (in addition to the savings already targeted from the 2009 pension changes for future workers)
Our Analysis Finds:• Their pension cuts would reduce pension
benefits for existing state workers in direct violation of the state constitution
© 2011, Center for Tax and Budget Accountability
33
Pre
lim
inary
An
aly
sis
of
Illin
ois
S
en
ate
GO
P B
ud
get
Pro
posal
Proposed Reforms Do More Harm Than Good
They Propose:• state funding for K-12 education be cut by
$725 M
Our Analysis Finds:• Their education cuts would increase the
funding gap for an “adequate education” to above its current $2000 per child.
© 2011, Center for Tax and Budget Accountability
34
-$100
-$1,944
-$2,500
-$2,000
-$1,500
-$1,000
-$500
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
FY Difference
CU
T E
DU
CA
TIO
N —
RE
AL
LY
?C
UT
ED
UC
AT
ION
—R
EA
LL
Y?
$ Difference in Per Pupil Foundation Level Funding
EFAB vs. ACTUAL
The Illinois State Board of Education estimates it would cost $3.1 billion to increase the current Foundation Level to the EFAB recommendation.
© 2011, Center for Tax and Budget Accountability
35
Cut Education—Really?
Illinois ranks 49th out of 50 states in portion of education funding covered by the state
But Education now matters more than ever to economic prosperity:
Generally: unemployment rates are highest for those with the least education.
EX
HIB
IT “
A”
IS E
DU
CA
TIO
NE
XH
IBIT
“A
” IS
ED
UC
AT
ION
© 2011, Center for Tax and Budget Accountability
36
Cut Education — Really?Impact of Education
on WagesIn real (2006) dollars, between 1980 and 2006, only those with at least a college degree experienced any gain in hourly income, with growth of 14.3%
Real median hourly wages for all other education categories declinedLess than a high school diploma fell by (-28.7%)Only a high school education declined (-8.7%)Some college but no degree declined (-4.3%)You gotta learn to earn!W
AG
E D
IFF
ER
EN
CE
SW
AG
E D
IFF
ER
EN
CE
S
© 2011, Center for Tax and Budget Accountability
37
Illinois GDP Growth Lags
TH
E I
LL
INO
IS E
CO
NO
MY
TH
E I
LL
INO
IS E
CO
NO
MY
Source: Bureau of Economic Analysis, US Dept. of Commerce
© 2011, Center for Tax and Budget Accountability
38
Wages for Minorities lag Whites
Real wages for Whites increased modestly between 1980 and 2007, but :
The White-Hispanic wage gap is larger in amount, but increased by a smaller percentage, growing from $3.82 in 1980 to $5.34 in 2007, an increase of 39.7% over 1980
Real wages for African-Americans declined. The hourly wage gap between Whites and African-Americans grew from $1.52 in 1980 to $3.44 in 2007, an increase of 126.3% over 1980
WA
GE
DIF
FE
RE
NC
ES
WA
GE
DIF
FE
RE
NC
ES
© 2011, Center for Tax and Budget Accountability
39
Still Separate. . . . Illinois is the third most
segregated state in K-12 education for blacks
82% of black children attend majority/minority schools
90% of white children attend virtually all white schools
(*Source: 2006 Education Trust study on segregation)
SE
GR
EG
AT
ION
SE
GR
EG
AT
ION
© 2011, Center for Tax and Budget Accountability
40
. . . . Still UnequalMinority school districts
start out with $1,154 less per child to spend on education
That’s the second worst gap in the nation
(*Source: 2006 Education Trust study on segregation)
SE
GR
EG
AT
ION
SE
GR
EG
AT
ION
© 2011, Center for Tax and Budget Accountability
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Illinois Property Tax Revenue Growth vs. State Median Income Growth
4.92%
-5.33%
23.21%
53.71%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1990-2007 2000-2007
Property Tax Revenue Grow th
State Median Income Grow th
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*NOTE: It’s a fixed cost for business as well.
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Other Proposed options :
• Borrowing from financial institutions to pay overdue bills and cover operating costs
• Continued deferment of payments owed providers
• Further cutting FY2012 appropriations for services
• Raising Revenue:– Expanding sales tax to services.– taxing some retirement income– a progressive income tax.
Op
tion
s
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For More Information:
Center for Tax and Budget Accountabilitywww.ctbaonline.org
Ralph M. MartireExecutive Director(312) [email protected]
Ron Baiman, Ph.D.Director of Budget and Policy Analysis(312) [email protected]
Yerik KaslowResearch Associate(312) [email protected]
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