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Archive for the ‘Illinois Policy Institute’ Category

A recent survey also shows that fully half of residents would move out of the state given the opportunity.

By Todd J. Behme | Illinois Policy Institute

Pocketbook issues concern Illinoisans significantly more than other issues and account for why so many would leave if given the chance.

More than half of Illinois voters polled cited high taxes as a top issue in a list of seven issues facing Illinois, according to a survey conducted for the Illinois Policy Institute.

Next was the economy, selected by 41% of respondents. That percentage has risen sharply in the past year, from 24% at the beginning of 2025 to 35% in the first quarter of this year. The percentage citing taxes fell from 58% in the first quarter.

Voter irritation with property taxes is high. Over 61% said they were somewhat or very dissatisfied with the value their community gets for those taxes. Fewer than 24% were somewhat or very satisfied.

Illinois is tied with New Jersey for the highest effective residential property tax rate. State residents pay the highest combined state and local tax rate in the country. Per-capita state and local taxes were in the top 10 in the country in fiscal 2023.

The resulting financial stress has more residents considering an out-of-state move. Just over 51% of poll respondents would leave Illinois if they had the opportunity, the highest percentage in the past six quarters. About 39% would stay — lowest since the beginning of 2025 — and about 10% were unsure.

Report continues here.

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The state saw a drop of over 10% in the period from 2014 to 2024, five times the national rate.

By Rich Witzel | Illinois Policy Institute

Illinois public schools are losing students at a faster rate than in nearly every other state.

From fall 2014 to fall 2024, public elementary and secondary school enrollment dropped 10% in Illinois, according to a recently released report by the National Center for Education Statistics. The national decline was 2%.

Public school enrollment is falling across much of the country, but some states are losing students at a far faster rate than others.

Illinois ranked fourth-worst in the nation for enrollment loss percentage in the period, behind only West Virginia, Mississippi and New Hampshire.

The struggling system

At least some of the drop can almost certainly be attributed to Illinois’ ongoing outmigration problem. Still, it is not difficult to guess why fewer Illinois families are choosing public schools for their children.

Report continues here.

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Gov. J.B. Pritzker’s 2019 “Rebuild Illinois” plan created automatic inflationary adjustments in the state gas tax, which could reach over $1 per gallon by 2056.

By Patrick Andriesen | The Center Square

Illinois’ state gas tax is slated to go up every year without lawmakers ever voting on the increases.

The state went almost 30 years without raising the tax, which was 19 cents a gallon from 1990 to 2019.

That year, as part of his “Rebuild Illinois” infrastructure program, Pritzker doubled the tax to 38 cents a gallon.

More consequentially, the law created automatic yearly increases linked to inflation. Because of that, Illinois drivers will likely pay more in state gas taxes each year for the foreseeable future unless lawmakers take action, as there’s no expiration date on the annual adjustments.

The gas tax could more than double in the next 30 years. By then, it could be over $1 a gallon, five times more than before Pritzker took office.

Report continues here.

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By Lilly Rossi | Illinois Policy Institute

While Illinois families won’t see gas prices increase July 1, they will see a record $55.9 billion budget with over $800 million in tax increases and new laws take effect.

Here are five laws effective July 1:

End-of-life option

Referred to as Deb’s Law, patients with a terminal disease may ask a doctor to prescribe aid-in-dying medication allowing them to end their life “in a peaceful manner.” Senate Bill 1950 was originally titled “Sanitary Food Preparation” and amended in the last week of the 2025 regular session to the “End-of-Life Options for Terminally Ill Patients Act.”

Cyber-bullying definition

House Bill 3851 adds to the bullying prevention section of the school code. “Posting or distributing sexually explicit images” is considered a form of bullying. Beginning in the 2026-2027 school year, “‘cyber-bullying’ also includes the posting or distribution of an unauthorized digital replica by electronic means” if the post creates fear or harm for the student, hurts the student’s physical or mental health, or interferes with the student’s academic performance or the ability to participate in other services, activities or privileges provided by the school.

Report continues here.

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By Eric Allie/Illinois Policy Institute. View more of Eric’s work via Instagram here.

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Actuaries say Illinois needs to put in $17 billion a year to fix the plans, but the 2027 plan calls for far less.

By LyLena Estabine | Illinois Policy Institute

Gov. J.B. Pritzker’s proposed budget gives Illinois’ five state retirement systems $5.4 billion less than what actuaries say they need.

House Bill 0131 and Senate Bill 2512, which contain the proposed budget for fiscal 2027, would appropriate about $11.6 billion to contributions for the five systems. These payments are required by a 1995 state law known as the “Edgar Ramp.”

But while that would satisfy the legal requirement, it would not — by a long shot — meet the fiscally responsible requirements determined by the state’s actuaries. They say the state’s pension plans need just over $17.02 billion this year — and annually for the next 20 years — to fully fund the system and begin paying down the state’s pension debt. That’s almost $5.4 billion more than proposed in the fiscal 2027 budget.

For every year the state fails to make a full, actuarially determined contribution, more money will be needed from taxpayers to pay down the debt. In 2023, COGFA determined that $14.9 billion a year for 20 years would be enough to pay down the debt. That increased by more than $2 billion to $17.02 billion in its most recent report.

The state’s pensions shortfall, or the difference between what the state puts in and what actuaries deem sufficient, has grown, too. In 2023, the difference between statutorily required contributions and the actuarially determined amount was $4.1 billion, more than $1 billion less than the $5.4 billion proposed for fiscal 2027.

Report continues here.

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The state again had the highest residential property tax rate in the U.S. in 2024, tied with New Jersey.

By LyLena Estabine | Illinois Policy Institute

Illinois remains at the top of the country in homeowner property taxes, tied with New Jersey.

Both states had an average effective rate of 1.88% of home value in 2024, more than double the national average of 0.86%.

That translates to a bill of roughly $5,452 on a house worth the 2024 Illinois median of $290,000. But the whole state isn’t affected evenly.

Residential property taxes are particularly burdensome in counties such as Kendall, McHenry, Lake and DeKalb, all four of which are among the 12 highest-rate counties in the country. Median household property taxes in those counties ranged from to $5,974 to $8,923. On top of income taxes and the highest combined state and local tax rate in the U.S., that’s a hefty bill to manage.

High taxes, particularly property taxes, were a top-two issue for 58.1% of likely Illinois voters in a recent poll. Neighboring states all have lower property tax rates, which can entice people to leave Illinois. In 2024, Illinois lost a net of nearly 12,000 people to Indiana, where the effective property tax rate was only 0.76%. Nearly a net 10,000 left for Wisconsin, with an effective property tax rate of 1.32%.

Illinois property taxes are driven by a combination of local and state decisions. Public schools are funded primarily by property taxes, but school districts are forced to rely so heavily on them in part because the state diverts a growing share of its education spending to pensions.

Report continues here.

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High chronic absenteeism will no longer hurt a school’s state rating.

By Hannah Schmid | Illinois Policy Institute

Illinois plans to eliminate poor attendance from school ratings at a time when a fourth of the state’s students miss a significant chunk of the academic year.

In an overhaul the State Board of Education approved in April, “chronic absenteeism,” or missing 10% or more of the school year with or without a valid excuse, will no longer ding a school’s rating. All nine current board members were appointed by Gov. J.B. Pritzker.

The new system will use the term “consistent attendance,” the percentage of students present 90% or more of the school year.

That semantic switch may confuse parents about what’s really being measured, though it’s just a different way of saying the same thing. But the revised system also changes attendance from a “core indicator” in the rankings to merely an “elevating indicator.”

Why that matters: Strong “consistent attendance” will raise a school’s rating, but a weak performance won’t hurt it.

The state calls this a “strengths-based” approach, but it means the high rates of students skipping class across Illinois won’t affect schools’ ratings.

Report continues here.

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By Brennan Park | Illinois Policy Institute

Illinoisans continue to pay the highest combined state and local tax rate in the country, according to WalletHub.

Effective state and local tax rates totaled almost 17% for a median Illinois household last year, compared with the national average of just over 11.02% and higher than No. 2 New York, at 14.95%.

The median amount of state and local taxes for an Illinois household was $12,538 last year, fourth-highest in the country. The national median was around $8,949. (These amounts use a different household measurement.)

Illinois’ burden is driven by property, sales and excise taxes that exceed national averages and those in neighboring states.

Property taxes are especially high, with an effective rate of 1.92% of the value of a typical home, more than double the national median of 0.89%.

Sales taxes are also elevated in Illinois, with a 6.25% state rate and a nearly 9% combined state and local rate on average.

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Matt Paprocki

By Matt Poprocki | Posted to the Daily Herald

Gov. JB Pritzker is marketing himself as a champion of affordability. A proposal to impose the largest passenger toll increase in state history cuts directly against that message.

The plan would raise tolls 45 cents for passenger vehicles and 30% for commercial vehicles. If approved, it would generate an additional $1 billion annually starting in 2027, with automatic increases tied to inflation every two years beginning in 2029, capped at 4% annually.

State leaders have framed the proposal as forward-looking, but in reality it’s another cash grab — for a system that doesn’t need the money.

State leaders approved the potential toll hike in November 2025 to secure labor support for a broader transit funding agreement. But the tollway does not need more money: Toll revenues have exceeded operating and maintenance costs for decades. In 2024 alone, the tollway collected nearly $1.44 billion — the most in its history.

With cost of living a top concern in Illinois, residents and businesses do not need something disconnected from necessity or announced projects.

The Illinois Tollway board has a choice. It can approve a record-setting unnecessary increase that drivers and businesses cannot afford, or it can decline the increase and recognize that Illinoisans already pay enough. Nothing will change; the state still has enough money to run road projects and has a surplus sitting in tollway reserves right now.

Since 2019, Illinois drivers have paid roughly $1,500 more in gas taxes and vehicle fees. Higher tolls would affect not only commuters, but ripple through the broader economy.

Commercial tolls are set to rise by 30%, and those costs will be passed on to consumers through higher prices on everyday goods. Nearly everything purchased in Illinois travels by truck at some point, making this toll increase a broad, indirect tax on households statewide.

The proposal is even more troubling because of its automatic inflation-linked increases. That lets lawmakers avoid future accountability. Costs will simply rise in the background, removed from public debate or oversight.

This approach raises serious concerns about how transportation dollars are being managed. Voters approved the 2016 transportation “lockbox” amendment to ensure money would be used appropriately. While this proposal may comply with that framework, it undermines its spirit by layering on new, permanent revenue streams instead of emphasizing the efficiency and restraint voters were looking for.

Illinois has seen this pattern before. In 2019, Pritzker and lawmakers tied the state’s gas tax to inflation, creating automatic annual increases. The result has been one of the highest gas taxes in the nation and billions in surplus revenue. Now, the same approach is proposed for tolls, despite clear evidence that existing funds are more than sufficient.

Spiking fees beyond what’s needed for road maintenance is unfair to drivers, who should pay only for the actual cost of maintaining infrastructure. Using fees collected from residents and businesses to set aside billions to satisfy unions is directly opposed to improving affordability and economic growth in Illinois.

State leaders could pursue meaningful relief. Georgia and Indiana implemented temporary gas tax holidays to help offset rising fuel costs. With Illinois’ transportation funds running a surplus, lawmakers could provide similar relief without jeopardizing long-term funding.

The board responsible for approving the hike is composed of Pritzker appointees, and the governor himself sits on it as an ex-officio member. If the increase moves forward, it will do so with the backing of the same leadership that claims to want to ease the burden on families.

Will Pritzker allow another unnecessary cost increase on Illinoisans, or will he step in and stop it?

For a governor who says he’s focused on affordability, the answer should be clear.

     – Matt Paprocki is the president and CEO of the Illinois Policy Institute

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