Where Our Money Came From, 1950-2005

A look at how Illinois has tried to pay for itself over the years—mostly income and sales taxes, though riverboats have kicked in. The real revenue expansion was from 1960 to 1970, when the state got an income tax and a corporate income tax to pay for the wave of baby boomers and new social programs.

Though it unfortunately doesn’t include federal revenues, this is still a nice breakdown of where the state’s money came from for 50+ years (PDF), and in constant 2005 dollars no less.

It’s a big leap from 1960-1970, but there was a lot of new stuff to pay for, like “baby boomers":

The jump from 1960 to 1970 is likely explained in large part by four things happening in the 1960s:  (1) a long U.S. economic expansion; (2) maturation of early Baby Boomers into adolescence and early adulthood; (3) creation of Medicaid and other social programs; and (4) enactment of a state income tax in 1969, which helped fund those programs.  The more than doubling of sales tax revenues (after adjustment for the CPI-U) during that decade suggests the large contributions that economic and population growth made.

The biggest decade-over-decade jump in the state’s history was 1950-1960, when it added over 1.3 million people (15 percent growth); it added another one million from 1960-1970 (10 percent growth), one of only three decades in the state’s history when it added more than a million souls.



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