Report shows Iowa ahead of Illinois in tax policies

A top executive in an eastern-Iowa-based taxpayer rights group says comparing Iowa and Illinois tax policies shows the Hawkeye State is ahead of the Land of Lincoln. Jeff Boeyink, executive vice president of Iowans for Tax Relief, says since the organization’s offices are based in Muscatine, they get a first-hand look at the economies of both states. Boeyink says during the recent recession, Iowa and Illinois went in opposite directions in solving their fiscal problems. While Iowa policymakers controlled spending and dipped into reserve funds to balance the state budget, Illinois lawmakers passed “significant” tax increases. For state fiscal years 2002 through 2005, state taxes in Illinois were increased by one-point-four billion and state spending increased by 31 percent according to Boeyink. He says the state of Iowa, by comparison, saw state tax collections decrease slightly due to the reduction in the sales tax on utility bills. In addition, the State of Iowa’s budget during that three year time frame grew just three-point-three percent, which Boeyink says is below the rate of inflation. Boeyink says you can look at other economic indicators, like the taxes Iowa and Illinois are now collecting from individuals and businesses, to judge the health of each state’s economy.”Our economy surges while theirs struggles,” Boeyink says. During the first half of the most-recent state fiscal years, Iowa’s individual income tax collections were up nearly seven-and-a-half percent, while Illinois’ were down almost three percent. Corporate tax collections showed a huge difference, too. Corporate tax collections were up 31 percent in Iowa, while there was an eight percent decline in corporate taxes paid to the State of Illinois during that same time frame. He credits the difference to Iowa policymakers who decided that Iowa would be among the only two states in the country that did NOT raise taxes during the recession.