Conronavirus Puts Illinois Finances Up the Creek without a Paddle

From Wirepoints:

State of Illinois provides first look at possible revenue impact from downturn – Quicktake

By: Mark Glennon*

COGFA, Illinois Commission on Government Forecasting and Accountability, on Tuesday released its three-year budget forecast. That forecast itself means little because it does not reflect the likely impact from the new downturn.

However, COGFA did provide some rough guidance on that impact: A revenue loss of $8 billion is a reasonable scenario – about 20% of the state budget – though it likely would be spread over several years. Specifically, COGFA said,

While the certainty of the country, and world, plunging into recession seems to grow each day, attempting to value the impact of COVID-19 on State revenues is virtually impossible.  With that caveat, it seems reasonable to offer a scenario with more devastating impacts on revenues in the near-term than even the “Great Recession”.  As a result, should revenues experience a peak-trough decline of 20%, a revenue reduction of over $8 billion would be experienced, although likely spread over multiple fiscal years.

That’s obviously very significant. For a little perspective, the estimated additional annual revenue from the pending progressive tax increase is about $3.5 billion, and it has already been promised away on other things.

COGFA provided this additional background from recent downturns:

[During the recession between FY 2001 and FY 2003] overall tax revenues fell a combined 5.5% (see following graphon page 7).  Revenues from the “Big 3” fell a similar 5.7% during this time frame.  The Commission estimates that if the State were to experience a similar recession over the upcoming fiscal years, a falloff in revenues of near $2 billion would be expected.  Again, the timing of how this would affect particular fiscal years is difficult to predict, but it is likely that the impact would be felt over more than one fiscal year.

[During the Great Recession] overall revenues fell a combined 8.7% between FY 2008 and FY 2010 (see graph  on  page  7).  During this timeframe, net revenues from the “Big 3” (personal income tax, corporate income tax, sales tax) fell a combined 16.6%.  Since that time, due to recent income tax increases, their composition of overall revenues has grown from around 60% to near 78%.  Because of the increased reliance on these sources, significant changes in these taxes will have a greater impact on overall revenue performance.  Because of this, the Commission estimates  that  if  Illinois  were  to  have  another  severe  recession  similar  to  the “Great Recession”, the decline in total receipts could reach 11%.  In terms of receipts, this would equate to a revenue loss of around$4.5 billion.  This revenue reduction would likely be spread over multiple fiscal years.

It’s all a moving target, of course, because we don’t know how long the shutdowns will last.

*Mark Glennon is founder of Wirepoints.


Conronavirus Puts Illinois Finances Up the Creek without a Paddle — 17 Comments

  1. Poor pensioners won’t be hurt unless they live in Illinois or own property here in this wasteland.

    BTW, no county fair this year.

  2. I just watched a very insightful video from 12 doctors who claim this CoVid19 crisis is blown way out of proportion.

    The doctor from Germany clearly shows why the mortality rates are higher in certain geographical areas.

    For more information please go to I am not suggesting we shouldn’t heed the advice from the government, but we need to look at the facts.

    Stay well and God bless!

  3. If you haven’t figured out that this is all a total ruse to kill the economy and keep your enslaved completely under the thumb of big brother, then there is no hope for you whatsoever. You will never be allowed to exercise your free will again because you have accepted their brainwashing. Nothing has been learned from history. The reset is happening before your very eyes and you are welcoming the beast system that is rising with your ignorant compliance.

  4. Illinois is in such a horrible financial situation, does it really matter anymore what the incompetent politicians do anymore in Springfield?

    It’s like that scene with the engineer on the Titanic in the movie; once you calculate the ship will sink, there is no reason to attempt to try to keep her afloat.

    Unless Illinois dramatically reduces the pension benefits and changes course on public pensions, the USS Illinois is going to the bottom of the sea. It’s just a matter of when.

  5. That’s why Pritzker wants the open ended “fair tax” increase.

    If he gets his way, I would bet a $50k a year worker would have a state tax rate of 8.5%

  6. A good source of revenue to cover shortfall could be for State government workers and State government retirees on pensions to contribute some of their monthly income to help the State. Only those with very high salaries or pensions would be asked to step forward.

    They could do just as rich people who serve in government who donate their salary to government of charity. Such as Donald Trump who donates his entire $400,000 yearly salary. He has set the example.

    Time for other government workers, pensioners to step up. Do as the last good and credible Democrat President JFK asked of Americans. Today, JFK would say to Illinois government workers, “Ask not what the State can do for you but what you can do for the State of Illinois and its people.”

  7. Time for Mr. Pritzker to redirect some of the $45 billion he has earmarked for the unions that created the “Rebuild Illinois” program.

  8. Paul Revere = Diane Evertsen.

    Yes, Diane, you’ve been outed!

    Shame on your piss poor strategies. RINOS like you should face extinction. And it won’t be for your tusks.

  9. And all Fred Flintstone can do is put his hand out for mo money Mr. President we need mo money even tho I can’t even organize a dam thing here in this hole!

  10. Bred, do you believe for a NY minute any of those pension pigs would contribute? Dream on, sonny.

  11. My Political Science and Sociology professor continues to unload his sewer septic tank all over this sunshine blog. His newest clever idea: ask public employees and retirees to contribute more. The most moving argument? JFK! I have another idea. How about private sector employees showing some patriotism and contributing, let’s say…more, much more, perhaps all more. Show some patriotism. Let’s see the private sector stand up, hug the American flag, and help free markets and capitalism. How about unloading those 401k funds into the hands of the homeless? Who cares about that penalty for retiring funds before turning 59? Let’s get that budget under control once and for all. How about enacting a nationwide program called “Adopt a banker.” How about “Adopt a CEO?” Stay tuned…tic, tock, tic, tock, tic, tock, hug your neighbor, tic, tock, tic, tock, tic, tock, meeeeeeoooooooowwwwwwwwwwwww…

  12. Mexican border closed Angel!

    Boo boo!

    Why ain’t you on the Narco state side of it?

  13. That’s going to be true for all the states, we just started out in the hole unlike some other state.

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