If the country goes off the so-called “fiscal cliff” at the end of the year, it could have a drastic effect on Illinois. That was the word Monday at a legislative hearing in Springfield. Brian Mackey has more.
Most of the attention on the “fiscal cliff” has been focused on the federal government. But a sudden increase in federal tax rates combined with federal spending cuts would likely have a significant effect on Illinois state government.
Natalie Davila is research director at the Illinois Department of Revenue. She says there could be a significant drop in economic growth, retail sales, and workers’ wages.
DAVILA: “Under a non-fiscal cliff scenario, we have wages and salaries growing at a projected 3.3 percent in fiscal year 2014. Under a pessimistic fiscal cliff scenario, that number falls to 1.1 percent.”
On top of that, Davila says 90,000 people stand to lose unemployment benefits at the end of the year, which would mean a loss of tens of millions of dollars in tax revenue.
— Brian Mackey