Progress Illinois

If you need to renew your driver's license, it just got a little bit more expensive. This week, Illinois tripled the license renewal fee from $10 to $30, the first increase since 1983. By January, the cost of acquiring an annual registration sticker and correcting car titles will also jump, all in an effort to fund the state's capital construction plan.

While they understand that money for the "badly needed" capital plan had to come from somewhere, the editorial board at the Decatur Herald & Review isn't too happy that lawmakers used a host of vehicle fees to do so. In fact, the paper argued on Monday that if lawmakers want to close the state's deficit, "there aren't many of these 'hidden taxes' left the state can increase."

Is it true? Does Illinois rely too heavily on revenue from licenses and fees? Not according to data from the Tax Foundation. In their new paper (PDF) detailing where state governments get their tax revenue from, the think tank shows that licenses and fees account for just 6.6 percent of Illinois' total general fund receipts, almost two percentage points below the national average. Here's a graphical breakdown of the Illinois totals compared to nation as a whole:

Because the data does not provide information about how each of these taxes are structured, it's difficult to judge the equity of the varying tax systems. But we can certainly make some broad assessments about Illinois. First, our general revenue fund boasts the eighth highest reliance on property taxes nationwide. While that's not problematic in and of itself, it has wreaked havoc on our education system; as state lawmakers have pulled back on per-pupil spending, local districts have been forced to tap local property tax funds, creating a system where poor and working people pay a larger share of their income to the government but get less out of the schools that service them.

What else does the data show? Our sales tax policy, which exempts taxes on services, is definitely outdated. Illinois takes in just 16.6 percent of its revenue via the general sales tax, eight percent less than the national average.

And as regular readers can probably guess, our individual income tax receipts are woefully low too. Only 13 states generate less revenue through income tax collection, seven of which do not collect individual income taxes at all. There's a lesson here: You can only take in so many dollars when you place a heavy tax burden on the poor but let the rich coast by.

The budget approach being pushed by the Responsible Budget Coalition would make major strides towards righting the ship. Now it's just a matter of convincing rank-and-file lawmakers to support it as well.