October saw state's tax revenue continue to fall
SPRINGFIELD – Tax revenue to state government continued to tumble in October, a report by the Illinois Commission on Government Forecasting and Accountability says.
Overall state tax-source revenue declined 10.5 percent, continuing a trend that began more than a year ago. The steepest drop continues to be in sales tax collections, which were down 15 percent, or $90 million, from the October 2008 collections. The $515 million in sales tax revenue last month is the lowest amount in seven years. The state had $505 million in sales tax revenue in October 2002.
Personal income tax revenue – the state's largest single source of revenue – was down 8.5 percent last month from a year earlier. The $689 million collected is the least in an October in four years.
"Despite being in the early stages of a recovery," the commission report said, "the larger economically related sources such as income and sales continue to suffer from the recession's effect. As mentioned in previous revenue briefings, it will be some time before improvements in receipts can be expected."
There was one stunning increase in revenue last month. Corporate income tax revenue was $82 million, a 44 percent increase from a year earlier, and the greatest amount ever collected in October, according to state figures.
But University of Illinois economist J. Fred Giertz cautioned that the spike may be an oddity.
"It really doesn't reflect the way things are now," he said. "It does mean something in general. It's sort of a positive sign but it also may be an anomaly.
"There was a month several years ago when Commonwealth Edison sold a power plant and had a big capital gain that was reflected in corporate taxes. We don't know if something like that is what happened here."
Lottery and riverboat gambling revenue also climbed last month, up 11 percent and 20 percent, respectively.
But the overall economy still appears to be weak, said state Sen. Mike Frerichs, D-Champaign, a member of the legislative commission.
"There are some hopeful signs but it still feels like someone who had the flu and the temperature broke but there are still aches and pains," he said. "Some corporations may be doing well but it sure hasn't transitioned down into your personal finances. There are still a lot of people in Illinois who are hurting."
Through the first four months of the current fiscal year, overall base revenue into the state government is down $209 million. But that figure is inflated by $475 million more in federal aid. When federal aid is excluded, revenue is down $684 million.
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