Illinois has a chronic, structural fiscal problem so huge that it cannot be eliminated by increases in economic growth alone, increases in taxes alone, or—alas— aggressive pension changes alone.1 In early December 2013 the General Assembly passed, and Governor Quinn quickly signed, a major...

The state of Illinois has operated for many years with a structurally unbalanced budget in the sense that, under the policies in place at the time, government revenue generated by the tax system was insufficient to pay for government spending under current law. This report from IGPA's Fiscal...

Are we looking at a crisis or a chronic condition? Illinois’ fiscal situation has been precarious for at least a decade – and much longer if pension liabilities are considered. From FY 2003 to 2008, which were good years for economic activity and revenue collection, the General Assembly and...

This paper provides an overview of the state-local government sector, a review of the short-run impact of the 2007-09 recession on state and local governments, and a brief summary of key long-run challenges state and local governments will encounter in the next decade. State and local...

When comparing marginal costs and benefits of a public project, most economists think in terms of adding together the marginal costs of production plus marginal costs of additional distortionary taxation. This paper clarifies how the "revenue effect" offsets the "distortionary effect." For...