Taxes

Part of the federal economic stimulus created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, involved increasing the tax relief businesses could claim under the existing net operating loss and excess business loss tax breaks. Among other things, the Cares Act made these tax cuts retroactive, meaning businesses can claim losses and reduce their tax liability for years in which the pandemic had no impact on their profitability.

Because the Illinois income tax code is predicated on federal law, whenever Congress increases existing tax relief already received by businesses at the federal level, that tax relief automatically applies under Illinois law, resulting in a concomitant reduction in tax revenue for the state. According to State Representative Mike Zalewski, this change in federal law could result in Illinois losing anywhere from $500 million to $1 billion in tax revenue this year, unless Illinois “decouples” from the federal change, as requested by the Pritzker Administration.  The following Issue Brief provides CTBA’s reasoning for supporting decoupling from Federal CARES Act Tax Breaks.

An introduction to public transit in Illinois: what it is, how it’s funded, who the major stakeholders are and how to get involved. Includes a glossary of transit terminology.

A presentation on the Illinois economy, and how it relates to education funding.

An overview and charts of the potential revenue options for Illinois, and what that revenue could be used for.

This Issue Brief explains why increased revenue is needed to address Illinois' budget deficits.

Funding Our Future is a thorough analysis and overview of the Illinois’s long-term spending patterns, budget problems and tax policy. This Report also includes an analysis of the two major gubernatorial candidates’ respective budget proposals. Funding Our Future has been peer reviewed by independent PhD economists that are university-based, think tank-based, and working for the federal General Accounting Office.

Illinois faces a structural deficit, which is not caused by over spending or generous pensions. Instead, it is caused by Illinois' poorly designed tax system, which does not create enough revenue to sustain the state’s expenditures. This problem cannot be solved by cutting spending. This is because 9 out of 10 general fund dollars is spent on providing core-services. The better solution is tax reform. 

Presentation on why Illinois needs tax reform, and the case for a graduated income tax.

The Citizen's Guide to the Illinois Budget and Tax System reviews the technical elements of the Illinois budget and tax system.  It provides in-depth analysis of historical spending and revenue trends, major budget pressures, deficit spending, bonds and debt, pensions and how the state shares revenue with local governments.

Illinois decision makers are confronted with two immense challenges. On the one hand, state government is facing the largest deficit in its history, with published estimates of the hole ranging from $4 billion to $9 billion. At the same time,  the U.S. and state economies are suffering through what looks like the worst recession since the Great Depression. How the state elects to resolve its record deficit will have a meaningful impact on the size and duration of the recession in the state's economy. Given this scenario, the state's best hope of growing its economy and countering the recession is to close its deficit by raising taxes progressively and maintaining or expanding spending on services.