Week in Review for March 15, 2019

Tax Foundation finds Pritzker tax proposal would have devastating effect on Illinois economy. Illinois, which is already one of the highest-taxed states in the nation in terms of sales taxes and local property taxes, would add income taxes to this dismal list of rankings. Under Gov. Pritzker’s proposed Illinois tax rates on individual and corporate income – rates that could be subject to revision – corporate income would be taxed at 10.45%, the third-highest rate among the 50 states. Pass-through business income used by a wide variety of farmers and small businesses would be taxed at 9.45%, the fourth-highest rate for pass-through small-business income among the 50 states.

The Tax Foundation’s publication of the true tax rates to be charged under the Pritzker plan reflects one of the levels of skullduggery indulged in by the plan’s proponents. Under existing Illinois income tax law there is a substantial “hidden” income tax on businesses called the “personal property replacement tax.” This is a supplemental tax created in the early 1970s by the Illinois General Assembly after a former, pre-1970 tax, the personal property tax, was abolished by law. The Constitution of 1970 forbade the State from charging and collecting a tax on personal property, and ordered Illinois to phase it out. Of course everyone collecting the old tax continued to need the money, so the General Assembly enacted a personal property replacement tax on business income and ordered that it be slapped onto all business income tax filings and payments as a hidden supplement.

Supporters of Gov. Pritzker proposal have so far ignored the existence of the personal property replacement tax and have tried to publicize tax rates that continue to hide the tax, but the Tax Foundation has ceased to play this game and has chosen to publish a new, corrected tax table that includes the full cost of the tax proposal. Under Pritzker’s plan, Illinois job creators would have to pay: (a) all of their existing income taxes, whether corporate or pass-through as individual taxpayers; (b) all of the tax increase included in the Pritzker proposal; and (c) the “hidden” personal property replacement tax.

Under the Pritzker plan, Illinois’ tax status would drop, in the eyes of the Tax Foundation, to 48thof the 50 states.

General Assembly passes bill to raise minimum age to purchase tobacco from 18 to 21. House Bill 345 also covers nicotine-vaping products such as e-cigarettes. Supporters pointed to soaring vaping rates among younger Illinoisans and the continuing danger of nicotine addiction and exposure to cigarette smoke. In House floor discussion of the measure, supporters shared stories of their own concerns with cigarettes and nicotine. Some House members expressed their opposition to the measure, pointing to the fact that 18-year-olds are legally allowed to vote and enlist in the U.S. armed forces. In addition, the bill decriminalizes possession of tobacco products for minors.

Reducing the sale of tobacco products will also reduce Illinois tax revenues. Tobacco taxes are a significant piece of the State’s overall budget picture, and the measure could reduce Springfield’ tax intake by up to $40 million/year. However, the House passed HB 345 on Tuesday, March 12, by a vote of 82-31-0. After the Senate passed the bill on Thursday, March 14, by a vote of 39-16-1, the measure was cleared for transmittal to the Governor and signing into law.

“Lincoln Yards” development moves through Chicago City Council. The significant-sized development will adaptively re-use Clybourn Avenue space formerly oriented towards railroad sidings, truck parking lots, light-industry buildings and a steel mill as a high-value urban footprint. Developer Sterling Bay says the name “Lincoln Yards” celebrates the site’s location between the neighborhoods of Lincoln Park and Bucktown. The development will occupy a large slice of Chicago’s North Side centering on the site of the former A. Finkl steel mill. Sterling Bay and its chief ally, retiring Chicago mayor Rahm Emanuel, says the $5 billion development will create 10,000 construction jobs, 24,000 permanent jobs, and 21 acres of parkland. Many of these new jobs would be specialized professional working positions rather than the industrial jobs on which Chicago once based its economy. Critics say the site occupies a stretch of irreplaceable Chicago River waterfront.

Illinois State Museum receives highest national recognition. The Illinois State Museum has again achieved accreditation by the American Alliance of Museums, the highest national recognition afforded the nation's museums. Accreditation signifies excellence to the museum community, to governments, funders, outside agencies, and to the museum-going public. The Illinois State Museum has been accredited since 1972. All museums must undergo a reaccreditation review at least every 10 years to maintain accredited status.

Alliance Accreditation brings national recognition to a museum for its commitment to excellence, accountability, high professional standards and continued institutional improvement. Developed and sustained by museum professionals for over 45 years, the Alliance's museum accreditation program is the field's primary vehicle for quality assurance, self-regulation and public accountability. It strengthens the museum profession by promoting practices that enable leaders to make informed decisions, allocate resources wisely, and remain financially and ethically accountable in order to provide the best possible service to the public.

Of the nation's estimated 33,000 museums, over 1,070 are currently accredited.

Accreditation is a very rigorous but highly rewarding process that examines all aspects of a museum's operations. To earn accreditation a museum first must conduct a year of self-study, and then undergo a site visit by a team of peer reviewers. AAM's Accreditation Commission, an independent and autonomous body of museum professionals, considers the self-study and visiting committee report to determine whether a museum should receive accreditation.

The Illinois State Museum inspires discovery and caring about Illinois' cultural and natural resources and heritage. The Museum's extensive collections and research activities provide the foundation for exhibitions and public programs that tell the story of the land, life, people, and art of Illinois. The Illinois State Museum is headquartered in Springfield. ISM facilities are located in Springfield, at the Dickson Mounds Museum near Lewistown, and at the Illinois State Museum Lockport Gallery in Lockport. For more information on the ISM, go online to www.illinoisstatemuseum.org.

More college students leaving Illinois to study in other states. Figures gathered by the Illinois Board of Higher Education (IBHE) show a high percentage of Illinois public high school graduates are moving on to four-year institutions, but of the graduates who have progressed on to four-year colleges, 48.4% are studying at out-of-state institutions.

This is a major increase from 29.3% in 2002, a figure posted prior to the major downturn of 2009-10 with its associated budget cuts and sharp increases in Illinois public-university tuition. Many Illinois families no longer find Illinois public universities to be an affordable option. Even those students who stay in Illinois often find themselves carrying significant student debts when they start their working lives. The IBHE is concerned that high-achieving students who leave Illinois will never return and will live productive professional lives in other states. Many state university systems try to lure highly qualified high school graduates out of Illinois by offering competitive scholarships and discounted tuition packages.

January 2019 unemployment up in many metro areas. The year-over-year trends were negative in thirteen separate Illinois metropolitan areas. While some of these areas were successful in creating new jobs, local increases in the numbers of people looking for jobs outweighed the number of jobs created. Metro areaswith higher unemployment rates in January 2019 than had been posted in January 2018 included Bloomington-Normal, Carbondale, Champaign-Urbana, Lake County, Peoria, Springfield, and the Metro-East region of greater St. Louis. In four metro areas – Decatur, Elgin, Kankakee, and Rockford – Illinois unemployment rates were more than one full percentage point higher in January 2019 than they had been in January 2018.

Unemployment decreased in the Chicago metropolitan area during the same twelve-month period, falling from 4.9% to 4.4%. This marked a continued widening of the “jobs gap” between Chicago and the rest of Illinois, in which jobless figures higher than Chicago were posted not only Downstate but also in outer suburban areas such as Elgin and Lake County. The January 2019 unemployment rate in Kankakee, only 60 miles south of Chicago, was 3.1% higher than the jobless rate in greater Chicago.

Illinois to celebrate St. Patrick’s Day on March 16-17. The unofficial holiday and parade day has moved from an observance of Illinois’ Irish-American heritage to a celebration of all ethnic backgrounds. The color is Kelly Green, though, and clovers, tinted water and bowler hats are the watchwords of the day. The city of Chicago’s longtime tradition of adding green vegetable dye to the Chicago River has made the City of the Big Shoulders the unofficial national capital of St. Patrick’s Day. Parades and festivals can be found all over Illinois.

Illinois’ Irish-American heritage has spread throughout Illinois ever since the digging years of the Illinois and Michigan Canal of the 1830s, the infrastructure project that was one of the new state of Illinois’ first big achievements that brought our state recognition on a national platform. Much of the huge project was built by Irish-American workers, including refugees who had fled brutal conditions in what was then a colonial-occupied homeland. Canal centers include not only Chicago at the waterway’s northeastern end, but also La Salle-Peru at the southwestern end and Joliet in the middle. Joliet, La Salle-Peru, and many other Illinois communities will join Chicago to celebrate St. Patrick’s Day this weekend.

Law enforcement has announced their intent to strictly enforce safe-driving laws throughout Illinois this weekend. The Illinois Department of Transportationurges St. Patrick’s Day celebrants to designate a safe driver.

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