Increase in personal income tax: more than 5%
Expenditure per capita (2008): $3,772 (16th lowest)
2009 budget shortfall: 15.1% (11th highest)
Home price decline from peak: 21.7% (13th largest)
Illinois consistently has had among the largest budget shortfalls in the country since 2009. It also was hit extremely hard by the recession. Since its prerecession peak, home values have declined by more than 20%, which is among the worst declines in the country. GDP grew a relatively modest 8.2% between 2006 and 2010, while the average state’s GDP grew at least 10%.
In 2011, the state’s continued financial problems led to a $13.5 billion budget gap, representing 40.2% of the state’s general fund. It was the second-worst budget gap in the country. The state was forced to make spending cuts in all five major categories, including $311 million in cuts to school education in 2011. The state also increased the corporate tax rate from 4.8% to 7% and increased personal income tax from 3% to 5% as part of the fiscal year 2012 budget agreement. The state estimates these measures will raise approximately $7 billion.
(iStock Photo) More From 24/7 Wall St.: America’s Disappearing Restaurant Chains American Cities Where Manufacturing Is Booming States Where Seniors Cannot Afford to Live The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.