Illinois’ Commission on Government Forecasting and Accountability has an interesting recent report. Tax revenues surged in April maintaining their historically high rate. But the good news won’t likely hold up. Taxpayers, it says, crammed as much income as they could into 2012 tax returns to avoid higher pending Federal rates for 2013, and 2012 taxes account for the surge. The effect will reverse as 2013 returns are filed.
Employment weakness will probably further depress tax revenue. Both the number of jobs and the average wage in Illinois are down for the first three months of 2013 from 2012, according to the report.
The Commission could have added that wealthy taxpayers continue to flee the state, except that the state does not track that. Anecdotal evidence, however, is overwhelming. The very wealthy — loosely defined as those with a second home elsewhere — are changing their residences or just moving, as tax preparers, estate planners and the wealthy themselves consistently report.