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Archive for the ‘Illinois Policy Institute’ Category

Illinois lawmakers are looking to expand sales taxes to include things such as streaming services, gym memberships, vehicle repairs, hair care and other services to bail out Chicago’s failing transit systems and put more money in government budgets.

By  Bryce Hill and Dylan Sharkey | Illinois Policy Institute

Illinois lawmakers are looking to collect $2.7 billion statewide by expanding sales taxes from mainly goods to many services such as streaming services, rideshares, gym memberships, car repair and more.

Members of the Illinois General Assembly said their Democratic peers are in stealth mode trying to pass the massive tax increase before adjournment May 31. They are claiming the money is needed to solve Chicago’s Regional Transit Authority fiscal crisis.

“We want you to be on alert. It is time for taxpayers to guard your wallet in the state of Illinois. We are already taxed to the max,” said state Rep. Ryan Spain, R-Peoria.

Illinoisans would find themselves paying sales taxes on:

  • Netflix and streaming services.
  • Rideshare services such as Über and Lyft.
  • Gym memberships.
  • Barbershops and beauty salons.
  • Car washes and car repair.
  • Plumbing, electrical and other repair.
  • Lawn care and landscaping.

Spain said a longer list of the taxable services is found at StopILServiceTax.com.

The money generated would mean nearly $2 billion for the state, $50 million for county governments, $390 million for municipal governments and $315 million for the RTA at current baseline tax rates. Other proposals would raise the RTA sales tax rate or cut the statewide rate.

Read more here.

Editorial note: “Complete list of over 80 service tax hike categories being proposed for Illinois:

  • Aircraft lease or rental (≤ 60 days)
  • Alteration and garment repair
  • Armored car services
  • Bank & financial institution service charges
  • Barber and beauty services 
  • Battery, tire, and allied services
  • Boat repair
  • Camera repair
  • Campgrounds
  • Carpentry repair and installation
  • Carpet, rug, and upholstery cleaning or repair
  • Communication services
  • Dance schools and studios
  • Dating services
  • Demolition
  • Dry cleaning, pressing, dyeing, laundering 
  • Electrical & electronic repair or installation
  • Employment and executive search agencies
  • Excavating and grading
  • Extermination services 
  • Farm implement repair of all kinds
  • Flying service and flight instruction
  • Furniture repair and cleaning
  • Fur storage and repair
  • Garbage collection & disposal (nonresidential commercial)
  • Golf & country club dues and other commercial recreation fees
  • Gun repair
  • House & building moving
  • Household appliance, TV, and radio repair
  • Investment counseling
  • Information services
  • Janitorial & nonresidential building maintenance/cleaning
  • Jewelry and watch repair
  • Landscaping, lawn care, tree trimming & removal 
  • Machine operator fees
  • Machine repair of all kinds 
  • Massages (unless by a licensed massage therapist)
  • Mini storage
  • Motor repair
  • Motor vehicle, RV, and recreational boat rental (without driver)
  • Motorcycle, scooter, and bicycle repair
  • Oilers & lubricators (vehicles and machines)
  • Office & business machine repair
  • Painting, papering, interior decorating 
  • Parking facilities 
  • Pay television (incl. streaming, VOD, pay per view)
  • Personal transportation services 
  • Pet grooming
  • Photography & photo retouching services
  • Pipe fitting
  • Plumbing (incl. drain cleaning, pipe unplugging) 
  • Reflexology
  • Retouching photographs
  • Roof, shingle, and glass repair
  • Security & detective services
  • Sewage services 
  • Sewing and stitching
  • Shoe repair and shoeshine
  • Sign construction and installation
  • Services related to installing/maintaining/upgrading specified digital products
  • Software as a Service (SaaS)
  • Storage warehouses/lockers for raw agricultural products 
  • Storage of household goods
  • Storage of tangible or electronic files/documents/records
  • Swimming pool cleaning and maintenance
  • Tanning beds or salons
  • Taxidermy
  • Telecommunication services
  • Telephone answering services
  • Testing laboratories (excludes human, animal, environmental tests)
  • Tin and sheet metal repair
  • Tree trimming and removal
  • Turkish baths & reducing salons
  • Vehicle repair 
  • Vehicle wash and wax 
  • Video game services and tournaments
  • Water conditioning and softening
  • Weighing
  • Welding
  • Well drilling (repair only)
  • Wood preparation (stripping, cleaning, sealing)
  • Wrapping, packing, packaging of merchandise (except processed meats/fish/fowl/vegetables)
  • Wrecker and towing”

Source

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Illinois leaders keep using tax hikes as a budget quick-fix, but the state’s fiscal troubles – and the taxpayer burden – persist. Here are the 70 tax and fee hikes state leaders have imposed during the past 15 years.

By Lauren Zuar | Illinois Policy Institute

Seventy tax and fee hikes in 15 years haven’t stopped Illinois’ financial dysfunction – they’ve enabled it.

After at least 70 tax and fee increases since 2011, Illinoisans last year paid $17.3 billion more. Since 2010 all those increases in the state’s tax burden has cost Illinois taxpayers more than $110 billion in additional taxes paid.

The result of all that new money?

Illinois has the nation’s lowest emergency reserves. Its government pension crisis has worsened, with $143.7 billion in unfunded liabilities and four of the country’s worst-funded state-run systems. And forecasts show a potential $1.2 billion budget shortfall in 2026.

This isn’t because of a lack of revenue, something Gov. J.B. Pritzker has even admitted. Illinois’ core budget issue is chronic overspending, which consistently outpaces economic growth and shows no signs of slowing during the next five years.

While tax hikes haven’t saved state finances as promised, their proponents keep pushing them: a progressive income tax, higher gas and liquor taxes, expanding sales taxes to services and new levies on everything from Netflix to soda to storage units. The Chicago Teachers Union and its allies recently proposed a $7.3 billion tax plan for 2026, including new taxes on digital ads and capital gains.

The result of too many tax hikes and too few results?

Illinois’ combined state and local tax burden is the seventh-highest in the nation in one analysis and No. 1 in another, voter trust is eroding and residents and businesses are leaving for lower-cost states. Over 420,000 residents have left since 2020. New polling found 54% of Illinois voters said high taxes were the state’s top issue, and nearly half said they’d consider moving.

Before the General Assembly’s 2026 budget deadline concludes and lawmakers float new tax ideas, here’s a look at Illinois’ hikes since 2011.

Read more here.

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More than half of Illinois voters said high taxes were the No. 1 concern for the state, according to an Illinois Policy Institute poll. Of those polled, nearly half said they would also move out of the state if given the chance.

By Patrick Andriesen | Illinois Policy Institute

More than half of Illinois voters polled said high taxes were the No. 1 issue facing the state in April 2025, according to a survey conducted for the Illinois Policy Institute.

High taxes were the top issue impacting the state for 54% of the voters – an increase of 2 percentage points from January – according to the poll of 550 registered Illinois voters conducted April 10-13 for the institute by M3 Strategies.

The economy came in second place, being ranked as a top issue by 33% of the voters. The economy was tied for the No. 3 issue in the January poll.

Voters were unhappy with their home state: 49.5% said they would move out of Illinois if given the opportunity, a slight increase from January. Only 40% said they would rather stay in Illinois. The remaining 10.5% said they were unsure.

Past surveys have shown high taxes were the No. 1 reason most Illinoisans considered leaving the state. Polling from NPR Illinois and the University of Illinois found 61% of Illinoisans thought about moving out of state in 2019, and the No. 1 reason was taxes.

Similar surveys conducted by the Paul Simon Public Policy Institute in 2016 and Echelon Insights in 2023 also found high taxes were the single biggest reason Illinoisans wanted to leave.

Read more here.

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Illinois students will struggle throughout their educations when 7 in 10 third-graders cannot read at grade level. Illinois Policy supports and submitted testimony in favor of a bill to train Illinois teachers in ‘science of reading’ methods to boost early-grade literacy.

By Mailee Smith | Illinois Policy Institute

Many Illinois teachers were taught that reading was best fostered when youngsters guess at the words, but the traditional methods such as “sound it out” are key to improving literacy.

Those methods are known as the “science of reading,” and they would get a boost under House Bill 1368 by mandating they be part of teacher professional development. The bill unanimously passed the Illinois House April 8 and received a Senate Education Committee hearing April 29.

Illinois Policy staff attorney and Senior Director of Labor Policy Mailee Smith filed written testimony in favor of the bill. Her testimony is below.

The bill then was passed out of the committee unanimously and will next be considered by the full Illinois Senate.

Testimony in support of House Bill 1368, amending the Educator Licensure Article of the School Code

Thank you to Chairperson Loughran Cappel, Vice Chair Lightford and members of the committee.

I am Mailee Smith, staff attorney and senior director of labor policy at Illinois Policy.

The first years of school are critical years during which students must build a firm foundation of skills to become strong readers. Being a strong reader then helps children develop into strong learners.

In other words, strong reading skills early on set up students for success.

Smith’s testimony continues here.

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Just over 5% of the average state income tax return supports economic development and public safety, while almost 28% goes to government worker pensions and benefits. Here’s a breakdown of how Illinois will spend your state income taxes.

By Lauren Zuar and FJ Hilgart | Illinois Policy Institute 

With the highest combined state and local tax burden in the nation, Illinoisans are right to ask: What are we paying for?

The average Illinois personal income tax return was about $4,030 for fiscal year 2024. About half of that is split between public education and state worker pensions and other employee and operating costs.

The state taxes income at a flat rate of 4.95%. The number of returns has held roughly steady at 6.2 million, but the total tax collections have jumped from $17.3 billion in 2017 to $25.6 billion in 2024. Collections this year are projected to hit $27.75 billion and then $28.73 billion in 2026.

The amount per return has grown by $1,589 from 2017 to 2024.

Individual income taxes are just part of the load placed on Illinois families. When you consider Illinois’ combined state and local sales, excise, income and property taxes, the average household this year will pay $13,099, costing more than 16.5% of a family’s income.

The state distributes income tax dollars through the general funds budget to support everything from pensions to prisons to public health. How this money is allocated reveals the state’s financial priorities and whether taxpayers are getting value in return.

Here’s a breakdown of how Springfield spends Illinoisans’ income tax dollars:

Read on here.

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Bill sponsors for a second time amended the ‘Homeschool Act’ as they tried to blunt the heavy criticism of the constitutional, parenting and privacy rights it could trample. Illinois Policy expert testimony showed the changes create more problems with the bill.

By Mailee Smith | Illinois Policy Institute

The “Homeschool Act” was amended in an effort to curb some of the historic opposition to it and the government overreach it would enable, but some of the changes make the bill even worse.

The changes quickly drew new opposition: 41,000 people in less than 24 hours used the Illinois General Assembly’s website to publicly oppose the changes. That followed 51,328 opponents on the bill’s first amendment and 42,393 on the original version of the bill – all records for any bill since the legislature implemented the witness system.

The following written testimony by Illinois Policy Senior Director of Labor Policy and Staff Attorney Mailee Smith was filed April 9 to the Illinois House Education Policy Committee on House Bill 2827, Amendment 2.

Testimony in opposition to HB 2827

I am Mailee Smith, staff attorney and senior director of labor policy at Illinois Policy. Thank you for this opportunity to provide testimony.

As I testified previously, I am before you today not only in my official capacity as an attorney, but also as the mother of three children whose experiences include having been in public high school since 2020, in a private K-8 school from 2011-2024, and one who is currently being homeschooled. I also spent nearly a decade as a school board member of a private school.

As both an attorney and a homeschooling mother, I have many concerns with the amendment to House Bill 2827. It is arguably more problematic than the version that passed out of this committee on March 19. Here are nine of the most concerning provisions in this bill:

  1. The required “homeschool notification form” not only includes personal information, it “may” also mandate a list of “any curriculum purchased or used for the homeschool.” It is left to the whim of the state board of education to determine what is in the form, and it could require a list of curricula. Requiring parents to file an annual list of curricula is burdensome and confusing. The bill doesn’t even give a date specification – is it the curricula of the current year? The previous year? Ironically, this is not something public schools are even required to list or post.
  2. Parents who decide to homeschool a child in the middle of the year because of bullying or health issues are at risk. They have just three business days to file the form, even in the midst of major upheaval in their lives. Our own homeschool story includes this type of situation. Our daughter has a medical condition that causes brain inflammation. Our decision to homeschool came because of a massive flare. I can assure you that getting a form to a regional office about homeschooling would not have been at the top of our priority list as we dealt with a life-altering health issue. Yet my family could have been targeted for truancy under this bill. As I will explain later on, my daughter even could have been interviewed – alone – by a truancy officer.
  3. There is still an element of criminality in the bill. The amendment provides multiple scenarios in which a truancy officer could refer a family to the local state’s attorney. In addition, truancy officers could enforce these provisions differently from region to region. That differential treatment raises constitutional red flags. It’s a basic tenet of constitutional law that a reasonable person must understand what a law requires and how it will be enforced. It cannot be written in a way that invites arbitrary enforcement as it is here.
  4. Children’s gender will be required on the homeschool notification forms. Each regional office of education must make an annual report to the state superintendent of education that includes the total count of students homeschooling in the area, broken down “by grade level and gender.” That indicates a child’s gender must also be required on the “homeschool notification form,” even though the bill doesn’t outline “gender” as required information. This ability of the state board of education to require anything it wants on the form is underscored by the bill’s additional provision allowing the board to “adopt any rules necessary to implement and administer the Act.”  There is no limit on what the board could require.
  5. Anonymous reports could start the investigation of homeschooling families. Reports of truancy or educational neglect that are referred to a regional office of education are to be further investigated by a truancy officer. But that begs the question: where do these reports of truancy originate? The bill states the Illinois Department of Children and Family Services shall refer reports of truancy to the relevant regional office of education. But again, where is DCFS getting a report that a family may be homeschooling and hasn’t submitted a form or isn’t providing an “adequate” education? That’s 59 pages into the bill, where it amends the “Abused and Neglected Child Reporting Act” to add the following requirement: Whenever DCFS receives a report of suspected truancy via its toll-free hotline, the department shall notify the caller that the report must go to the local regional office of education and provide a website to find the contact information. So DCFS is to direct people who call its hotline reporting suspected truancy to the regional office of education. This appears to be the mechanism that triggers everything: a potentially anonymous report. A nosy neighbor. Or someone who just doesn’t agree with homeschooling.
  6. Truancy officers can demand to meet with children, without their parents, just to establish whether there is “cause” for an investigation: The bill provides that a truancy officer notified of a homeschool in violation of Section 30 – which is the section entitled “accusation of truancy” – “shall meet with the child or children complained of and make an initial determination of whether there is cause to start a truancy investigation.” The section says he may demand to meet with the children – not their parents, and not the children in the presence of their parents. Just to make an initial determination of whether there even is “cause” to start an investigation. We’re not talking about an ongoing investigation but an inquiry into whether there should be an investigation at all. Even if a determination of “no cause” is made, the damage is already done – children have already been interviewed by a stranger without their parents present. If the truancy officer finds no cause, he is to assist the family in submitting the homeschool notification form – which indicates all of this could be initiated just because the family didn’t fill out a form.
  7. The costs to the regional offices of education remain: During the March 19 hearing, Gary Tipsord, the executive director of the Illinois Association of Regional Superintendents of Schools, testified the bill would increase the regional offices’ workload. He stated, “There’s likely to be additional costs. Those currently are unknown. We just don’t know what the cost would be,” and “You would anticipate additional cost or moving resources from one area to another.” The amendment does not change these potential costs.
  8. The bill still creates lists of families’ religious affiliations: By requiring a log of homeschool families’ curricula in the homeschool notification form and the educational portfolio, the state would be gathering a list of families that use specific religious curricula. This is akin to the state creating a list of parents and the religions to which they subscribe. That is unconstitutional and sets a dangerous precedent of tracking what religions or worldviews are being taught.
  9. Private schools are still regulated: The amendment still mandates that private schools register every year, but it adds that they must confirm or deny the enrollment and attendance of a child when asked by a truancy officer. There are potential privacy violations involved. In addition, it is unclear from the bill what would trigger a truancy officer to start investigating a private school family or how he would know to go to a particular school. Most of the bill’s procedural provisions involve homeschool families. It’s possible an anonymous report to a regional office could trigger this sort of investigation as well.

Like the original bill and the first amendment to HB 2827, this version includes numerous constitutional and other legal pitfalls, not to mention trauma to families. Families could be investigated based on anonymous complaints. Children could be interrogated by a truancy officer before there’s even “cause” for an investigation.

Read more here.

Related: “9 things Illinoisans should know before letting ‘Homeschool Act’ become law”

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House Bill 2827 would regulate both homeschool families and private schools in Illinois. Its extensive provisions have generated historic opposition. Here are nine things you should know about how it will impact education, privacy and your family.

By Mailee Smith | Illinois Policy Institute

A bill that would regulate the families of nonpublic school students has generated historic opposition in the Illinois General Assembly.

House Bill 2827, filed by state Rep. Terra Costa Howard, D-Lombard, would impose extensive regulations on homeschooling and private schools.

It’s been downplayed as simply filling out a form, but the “Homeschool Act” involves much more. Here are nine things you should know about HB 2827:

  1. The homeschool regulation creates a child registry, including children’s gender.
  2. Failing to file the form carries jail time.
  3. An “education portfolio” can be demanded at any time from homeschool families, allowing government abuse of power.
  4. The homeschool regulation requires more of homeschool administrators than the state does of public schools.
  5. The bill isn’t clear on how the regulate on would be enforced, creating substantial legal questions.
  6. The regulations would eat into education funding or other resources.
  7. The bill also regulates private schools.
  8. The bill creates a registry of residents’ religions.
  9. The bill has generated historic opposition.

You can tell your lawmaker to vote “no” on HB 2827 by using our Take Action tool.

1) The homeschool regulation creates a child registry, including children’s gender

The current version of HB 2827 requires homeschool families to file a “homeschool declaration form” each year with their local school district. But it’s much more than a simple form.

Instead, it mandates the reporting of personal information including, at a minimum, the child’s name, birthdate, grade level and home address, as well as the name, birth date, contact information and home address of the homeschool administrator.

But there is no limit on what information could be required on the form. The Illinois State Board of Education is simply tasked with creating the form and could require any information it wants. Other provisions in the bill indicate additional information will be required for government authorities to generate required annual reports.

For example, each year the regional office of education must create an annual report that includes the total count of homeschooling students broken down by grade level and gender. While a child’s gender is not required in the initial provision outlining the minimum requirements in the form, the form is clearly intended to gather more than just the information explicitly mentioned in the bill. And the state board of education is given the extensive authority to “adopt any rules necessary” to implement and administer the act.

With name, age, grade, address and gender already included, there’s no reason to think other questions – such as race, ethnicity or other affiliations – would not also be included.

There is no provision allowing parents to opt out of having their children and their personal information tracked by state and local authorities.

Read much more here.

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Illinois will impose the nation’s seventh-highest state and local tax burden on residents in 2025. Taxpayers on average will pay over 10% of their annual income to support government, according to WalletHub. | AP Photo/Nam Y. Huh

By Patrick Andriesen | Illinois Policy Institute

Tax Day is coming, but the income tax represents just one of the many taxes Illinois will impose as part of the nation’s seventh-highest state and local tax burden in 2025.

Income, property, sales and excise taxes combined will cost each taxpayer 10.2% of their annual income, according to a new WalletHub report.

Of the three major tax categories tracked in the national analysis, WalletHub found property taxes consumed the largest portion of Illinoisans’ yearly earnings at 3.81%, followed closely by state excise and sales taxes at 3.78%.

Illinois’ flat income tax consumed the smallest portion of residents’ annual income. It saved the state from earning a higher overall spot on the list by landing Illinoisans almost exactly in the middle when only the state income tax was considered.

Illinois moved one spot higher for tax burden among U.S. states. It was No. 7 this year after ranking No. 8 in the 2024 survey.

Despite Illinoisans contributing a little over one-tenth of what they earn in a year to fund state and local governments, six states ranked ahead of Illinois when it came to tax burdens. Hawaiians will pay the most.

WalletHub found Hawaii residents paid nearly 14% of their annual earnings to fund government operations. Alaska had the nation’s lowest tax burden at 4.9%.

Read more here.

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Fears have grown that more efficient cars mean less money for Illinois to fund roads. But the state already collects higher revenues than ever while burdening drivers with high taxes and fees. | Photo by Patrick Gorski/NurPhoto via AP

By Ravi Mishra | Illinois Policy Institute

Illinois is collecting more money from gas taxes and driving fees than ever, but concerns are growing about electric cars and fuel efficiency limiting funds for roads and bridges.

Illinois has an efficiency problem rather than a funding problem – and it’s not fuel efficiency that’s the problem. According to the latest report from the Reason Foundation, Illinois ranked 45th in the nation in capital and bridge disbursements, which are the costs of building new roads and bridges and widening existing ones. This ranking shows inefficiencies in how the state allocates funds as it spends $98,000 per lane-mile while it’s expected to spend $68,000 based on factors such as urbanization.

Burdening drivers to cover costs for ballooning inefficient budgets is nothing new for Illinois. Below is an overview of fees and taxes Illinoisans face for owning and operating a vehicle.

Gas taxes

In 2019, Illinois Gov. J.B. Pritzker doubled the per-gallon gas tax from 19 cents to 38 cents. Since then, it has grown to 47 cents per gallon. Illinois is also one of the few states to apply sales taxes to gas after the motor fuel tax is charged, essentially taxing drivers on the taxes they are paying.

As a result, Illinois drivers pay the second-highest combined state, federal and local gas taxes in the country, only behind California. About 85 cents of every gallon of gas goes to these taxes, nearly double what some of Illinois’ Midwest neighbors, such as Missouri, charge.  The average Illinois driver pays $323 annually in state gas taxes alone.

Read on here.

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Student literacy is in trouble nationally. Illinois is one of 41 states where just 1 in 3 or fewer of its fourth-graders met reading standards in 2024.

By Hannah Schmid | Illinois Policy Institute

Fewer than one-third of Illinois fourth-grade students met or exceeded reading proficiency standards on a recent national assessment, part of a nationwide literacy crisis in which students are already behind in fourth grade.

Students failed to meet or exceed reading standards in most states in 2024.  Illinois joined 40 other states and Washington, D.C., in which 1 in 3, or fewer, fourth-grade students met or exceeded reading standards.

Research has pinpointed third grade as a critical reading milestone because students need to have learned to read by then or they will not be able to absorb curricula during the remainder of their school years. If they cannot read, social studies, math and other subjects become incomprehensible and their futures bleak.

But there’s hope: Many states, including Illinois, have passed laws aimed at aligning reading instruction with evidence-based practices to improve the literacy and academic achievement of students. Still, Illinois could and should do more.

Just 30% of Illinois fourth graders are proficient in reading

Every two years, fourth- and eighth-grade students across the nation take the National Assessment of Educational Progress. According to the Nation’s Report Card, it is “the only assessment that allows comparison of results from one state with another, or with results for the rest of the nation.”

On the most recent national exam in 2024, Illinois ranked 29th in the U.S. for the percentage of fourth graders at or above proficiency in reading – down from 17th in 2022. It went from being in the top half of states to the bottom half in just two years.

The national percentage of students meeting or exceeding reading standards was just 31%, with 26 states seeing proficiency above that level. But Illinois didn’t even meet that low bar, missing the national average by one-tenth of a point. But four other Midwestern states were above that level: Indiana, Ohio, Wisconsin and Minnesota.

Leading the nation was Massachusetts, where 40.4% of fourth graders were at or above proficiency in reading. Following were New Jersey with 38.3% and Utah at 36.3%.

At the bottom: New Mexico with 20.3%, followed by Alaska at 21.7% and Oklahoma at 22.7%.

Read more here.

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