Largest Decline in Tax Revenue in over 60 years

Observations and comments about state government by State Representative Robert W. Pritchard.

June 15, 2010

High Court Increases Fines; Helps Local Government

One of the bills that passed the legislature this spring caught a lot of local units of government by surprise.  Senate Bill 3695 created a source of revenue to pay state police and avoid the layoff of over 460 state police staff.  Not many realized that the revenue came from reducing fines that go to local units of government.

The bill now waiting for the governor’s signature directs $15 of fines assessed to defendants in any felony, traffic, misdemeanor, local ordinance, or conservation case to a special fund to pay the troopers and avoid closure of almost 25% of the Illinois State Police’s district headquarters.  This may not sound like a lot of money per case but it adds up to a third of the revenue from such tickets that would have gone to local police departments, circuit court clerks, county budgets and state revenue.

On June 3rd, the Illinois Supreme Court issued a ruling increasing the maximum fine amount to $120, effective September 15th.  Prior to the ruling, counties could only charge $75 as a maximum fine for traffic violations to individuals that pleaded guilty and did not appear in court.  The Supreme Court ruling directs that the $50 increased maximum fine go to issuing police department, counties and the state.

SB3695 will help assure enforcement of laws by keeping state police on duty and the court ruling makes certain the law does not detract from needed local government revenue.

Sales Tax Receipts Fall

With the depressed economy and reduced sales activity in many areas, those that depend on sales tax revenue are feeling the pinch.  The Commission on Government Forecasting and Accountability reports that sales tax revenue last year fell by 6 percent and this year will see a further decline.

The reduced sales activity and resulting drop in tax revenue in Illinois is the largest decline in over 60 years.  Feeling the loss are the state’s general fund which receives 80 percent of the sales tax revenue, and cities and counties which receive the remaining 20 percent.  In 2009, over $14 million in sales taxes went to Ogle County and its municipalities.  Over $78.6 million went to DeKalb County and its municipalities.  Revenue is shared on the basis of where sales occurred.

Illinois has one of the highest sales tax rates in the nation, tied for 10th place among states.  Four states do not impose a sales tax.  In our state, the sales tax is primarily a tax on real property.  Very few services are taxes.  Only 19 of the 168 types of service transactions are taxed in Illinois.  That low number is why some are calling for expanding the sales tax to more services as a way to balance the state budget.

The list of exemptions and reductions in the rate of tax on sales continues to grow.  Receiving some reduction in the 6.25 percent state tax rate are purchases for food and drugs, farm supply inputs, manufacturing equipment, and renewable fuels.  Charitable organization purchases are also exempted.

The sales tax rate can be increased by home-rule communities and by referenda for public safety.  The highest sales tax in a municipality goes to Rosemont with its 10.25 percent rate.  Chicago and many nearby communities tax at the 10 percent level.

The Internet has greatly affected virtually all facets of economic activity, including the states’ sales tax revenues.  Currently, online retailers are subject to Illinois sales taxes if they have a physical presence in the state.  The Department of Revenue estimated that over $143 million of sales taxes related to online commerce went unpaid in FY2008.  Uncollected taxes are expected to grow to $163 million this year.

Illinois is participating in the Streamlined Sales Tax Project to simplify and modernize sales and use tax collection and administration.  The goal is to substantially reduce or eliminate the costs and burdens of sales tax compliance for businesses through simplified laws and administrative policies.

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Robert W. Pritchard (R-Hinckley) is the Illinois State Representative for the 70th district, serving the residents in portions of DeKalb, Boone, and Kane Counties. Bob has been serving in the Illinois House since 2003. Pritchard, affectionately known as Bob, has been serving in the Illinois House since 2003. Biography Bob was born February 2, 1945. He grew up on a farm outside Hinckley, Illinois where growing corn and soybeans instilled in him hard work and a sense of dedication. Bob and his family continue to their hard work by farming. He is married to his wife Mary, Associate Dean at Northern Illinois University, and has two grown sons, Matthew and Gregory. Education Bob majored in communications from the University of Illinois (Urbana-Champaign) earning both his bachelors and masters degree. Bob’s passion for farming and his education in communication gave him the unique opportunity to enjoy working in both fields. Professional Life Beginning as a Radio and TV broadcaster for a local area stations, Bob delivered the farming updates and local weather reports. Bob took advantage of his skills and has worked for universities as well as filled marketing, public relations, and community relation roles at DeKalb Genetics Corporation and Monsanto. Community Leader Before becoming a member of the Illinois House of Representatives Bob was an energetic and busy contributor to the communities of DeKalb County. Getting his hands dirty in all parts of local government, Bob served on the Hinckley-Big Rock Board of Education. Bob was never far from his roots in the farming community, and was elected to a leadership position for the DeKalb County Farm Bureau. He also served as chairman for the DeKalb County Board. Legislative History Bob has diligently worked for the betterment on a wide gamut of issues from early childhood and education, healthcare, conservation and the environment, job creation, and protecting the manufacturing industry. The values of hard work and dedication that were instilled in Bob from his years of farming are reflected in his mentality of representing his constituents.


  1. Editor's note: Those who post nasty comments using pseudonyms (sock puppeting) are prohibited. The above IP address, belonging to a SprintPCS subscriber has been banned. The comment has been removed.

  2. This state will continue to lose dollars if they continue to refuse to let those who have a solid history of being productive workers work and make real money. It's pretty well known that the construction is dead in all comparisons to years like 2004 through very early 2008. Many of those who were involved in new home construction and land development have either lost most of what they had or very close to it. Of course come the problems when you don't have money. Things like not paying bills or filing of taxes.

    This state is refusing to issue out professional licenses so that many of these out of work contractors can retool and go back to work, yes, I am one of those. ATTENTION TO STATE OFFICIALS: How to you expect me to fulfill my obligations without a decent paying job? How do a pay for professional services to fulfill by tax obligations if I have no money to do so? How do I get my feet back on the ground if the red tape and beaurocracy of this state is so out of touch with the times that they would rather I go out and stand in line for goverment assistance instead of allowing me to go to work and provide as I once did. This is just complete BS! and I am nearing the point of exhaustion working 88 plus hours WEEKS and having no real check at the end of that work period to show for it. Let us go back to work and a once productive group will again become productive and start spending money again.