Illinois tax revenue to top forecast by $1.3B
CHICAGO – Illinois was able to pay some overdue bills this spring because of an unexpected influx in tax revenues as businesses and individuals rushed to sell assets before federal taxes increased, Gov. Pat Quinn said Tuesday.
Income tax revenue for 2013 was expected to top forecasts by $1.3 billion, Quinn said. The state has received part of this money throughout the tax season, and the comptroller’s office has used it to pay off part of the state’s debt with vendors and service providers. Illinois currently owes these groups about $5 billion – $4 billion less than it did in the fall
The state’s debt was expected to rise in the upcoming months as tax revenue coming into the state decreases during the summer, a spokesman for the comptroller’s office said.
Quinn said that the money is welcomed but a one-time bump in revenue will not help fix the problem in the long run.
“This revenue will be used to help knock down our backlog of bills, but we must continue to focus on pension reform and restoring Illinois to full fiscal stability,” Quinn said in a statement.
Illinois owes billions to businesses, charities and local governments performing some of the state’s most essential services. The debt is a result of years of financial mismanagements.
The backlog of bills adds to the state’s overall huge financial crisis, which includes a $97 billion public pension emergency.
Federal tax rates increased in January 2013. Anticipating this increase, various businesses and individuals paid bonuses and dividends planned for tax year 2013 in 2012 to take advantage of 2012’s lower federal tax rates, the governor’s office said. Others sold investments to have their resulting income taxed at 2012 rates.