CHAMPAIGN, Ill. - Despite general reports of strength in the national economy, the Flash Economic Index for Illinois fell to 102.1 last month from 102.7 in November.
The December reading, while still indicating positive growth, did not detect in Illinois the strong Christmas buying that was widely reported by the news media.
Part of the sluggish performance in December may be explained by delays in corporate tax reporting over the holidays, said J. Fred Giertz, an economist at the U. of I. Institute of Government and Public Affairs. "Any technical problems with regard to the reporting of tax receipts in December should be resolved when the January index is compiled in early February," he said.
In addition, corporate tax receipts in Illinois have been affected by legislative changes in the way earnings are apportioned for businesses operating in more than one state. "So far, the change is having a negative impact on state corporate tax collections, but the Index has attempted to adjust to that change," Giertz said. Similarly, a three-year phase-in that increases the exemption allowance for personal income taxes has had "a more modest negative effect on collections," Giertz said, but again adjustments have been made in the Index.
The Illinois economy ended 1999 on a note of steady, if uninspired, growth with an average reading of 103.1 for the year. In 1998, the state economy boomed with a 105.6 point average reading. Any figure above 100 means the economy is expanding, while any number below 100 means the economy is contracting.
The Flash Index is a weighted average of growth rates in corporate earnings, consumer spending and personal income. The growth rate in state tax receipts for each component is calculated for the 12-month period using data obtained through Dec. 31.