Wed June 6, 2012
Illinois tax revenue up 7.9% over last May
An increase was expected. But the revenue manager for the state's forecasting commission says income and sales taxes are exceeding expectations.
Jim Muschinske says it's too early to detect what's behind the 7.9 percent increase last month over May 2011 in revenues from personal income taxes.
He says some of that increase was expected, due to timing technicalities of the state income tax hike of 2011. But personal income tax growth exceeded expectations.
"In the end, it may prove to be related to bonus payments that some companies have paid to their employees, or it may just be higher withholding taxes. We just really don't know at this stage," Muschinske said.
Muschinske also says he's surprised by a continued pattern of more spending, leading to a nearly 5 percent increase in sales tax revenue coming to state coffers even though the state has been waiting for sales tax numbers to slow down. Again, Muschinske says he's not sure why.
"I'm thinking probably people feel a little more secure in where they are in terms of their economy and their jobs," he said. "Perhaps they were wondering for a longtime 'will I be the next to get a pink slip?' Maybe they don't feel that way any more."
Mushinske says even if his revenue numbers aren't showing it yet, other economic data paints a cautionary tale of tepid growth ahead.
"I'm just kind of waiting for the slowdown to eventually show up," he said, "but as of yet we haven't seen that. So the underlying economic growth has continued to do pretty well." The latest report from the forecasting commission shows Illinois also received additional money from the federal government. But Muschinske says that's expected to drop-off.