Understanding Illinois: Exploring Roots of Illinois Budget Crisis
•March 2, 2016•
By Jim Nowlan
NP Guest Columnist
Illinois residents are paying significantly more in taxes and getting less in spending for public schools and state colleges than four decades ago.
How does that compute?
The answer is that health care costs for the low income (and state workers), pension appropriations and debt service have skyrocketed since 1978, squeezing other government programs.
From the pie charts here, readers can see that the slices of the budget spending from all funds for Medicaid and pensions have expanded while those for education and state colleges have shrunk dramatically. Ouch.
We must appreciate that the budget pie for 2014 is actually larger than the one for 1978 because of population growth (13 percent in the period covered) and increased tax burden. In 1978 the individual income tax rate was 3 percent, whereas from 2011-2014 the rate was 5 percent.
I also thought real, inflation-adjusted per capita personal income would have grown somewhat during the period as well, but no.
According to the handy-dandy inflation calculator Google found for me, 2014 per capita income in Illinois of $29,666 would have been worth less ($8,170) than the actual per capita income in 1978 of $9,202. (This may help us understand the Trump and Sanders phenomena.)
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