Senate President Cullerton Taxpayers Federation Slideshow
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Transcript of Senate President Cullerton Taxpayers Federation Slideshow
What we’ll discuss
• Some of the successes we’ve had despite the economic downturn
• The state of the current budget• And what path we can take in the
upcoming budget year
What Illinois Encountered
• Climbing Pension Costs Due to 1995 Pension Law and 2008 Market Collapse
• More People Qualifying for Entitlement Programs Like Medicaid
Active Membership, Years of Service in the Big Three Systems
Active Membership, Years of Service Distribution*
As of June 20, 2011
System/Years Service
< 15% of Total 15-19
20-24 25-29 30+ Total
TRS
92,836 67.4%
17,753
11,384 7,827 7,911
137,711
SERS
36,463 54.9%
8,971
9,734 6,118 5,077
66,363
SURS
56,344 74.1%
8,123
6,515 3,531 1,486
75,999
Total
185,643 66.2%
34,847
27,633 17,476 14,474
280,073 66% of all Active Members have 15 or fewer years of service in TRS, SERS or
SURS*JRS has 966 total actives. GAS has 180 total actives. No distribution available in the actuarial reports.
Pension Cost as % of Total GRF Spending
Growth in Unfunded Pension Liability
Growth in Unfunded Pension Liability: Impact of Market Collapse
Medicaid Full Benefits Enrollment
Medicaid Full Benefits Enrollment – Type of Enrollees
State and Federal Contributions to the Medicaid Program Including Federal Match Rate
What Did the 2011 Tax Increase Do?
• Purpose: Budget Stabilization and Correcting the State’s Structural Deficit
• Increased for four years the State’s personal income tax rate by 2 percentage points
• Increased for four years the State’s corporate income tax rate by 2.2 percentage points
2011 Budget Stabilization Plan
• There is no personal property tax in Illinois like in Wisconsin, Indiana, Kentucky, Missouri and most states.
Personal Income Tax Rate
Corporate Income Tax Rate
Prior Rate 3.0% 4.8%
2011-2014 5.0% 7.0% (not 9.5%)
2015-2024 3.75% 5.20% (not 7.75%)
2025 3.25% 4.80% (not 7.3%)
History of Illinois Individual Income Tax
• 1969: Gov. Ogilvie Creates a State Income Tax at a 2.5% Rate
• 1983: Gov. Thompson Raises the Rate to 3%; the Rate returns to 2.5% in 1984
• 1989: Gov. Thompson Approves Another Temporary Increase to 3%; the Rate was Expected to Fall to 2.75% by 1993
• 1993: Gov. Edgar Makes a Permanent Increase in the Rate to 3%
• January 2011: Gov. Quinn Approves a Temporary Increase in the Rate to 5%
How Illinois Compares to Neighboring States
Personal Income
Brackets
Personal Tax Rates
Corporate Income
Brackets
Corporate Tax Rates
ILLINOIS Flat 5.0% (through 2014)
Flat 7.0% (through 2014)
Wisconsin 5 4.6% to 7.75%
Flat 7.9%
Indiana Flat 3.4% Flat 8.5%
Iowa 9 0.36%-8.98%
4 6%-12%
Missouri 10 1.5%-6% Flat 6.25%
Kentucky 6 2%-6% 3 4%-6%
How Illinois Compares to Neighboring States
• Wisconsin: Income over $10,180 is taxed at 6.15% and up
• Iowa: Income over $13,221 is taxed at 6.12% and up• Missouri: Income over $9,000 is taxed at 6.0%• Kentucky: Income over $5,000 is taxed at 5.0% and up• Indiana: Counties can levy a personal income tax on top
of the Statewide rate
How Illinois Compares to Neighboring States
Illinois Remains the Only State Listed That Does Not Tax Retirement Income