From State Rep. Dan Ugaste:
Revised State revenue forecasts.
The Commission on Government Forecasting and Accountability (CGFA), the Illinois General Assembly’s revenue-tracking and budget-forecasting arm, released a new report this week containing revised numbers for FY21, the fiscal year that began on July 1, 2020 and will end on June 30, 2021.
CGFA published its revenue projections for FY21 in May 2020 to assist the General Assembly as it enacted an emergency budget for FY21.
The May numbers reflected the weeks of Illinois economic activity that came with Gov. Pritzker’s spring 2020 “stay at home” order, which halted many sections of the State’s economic activity.
Since May 2020, many facets of Illinois life have reopened. Some, but not all, Illinois workers who had been laid off or furloughed have gone back to work.
Paychecks have restarted, and Illinois workers are paying income taxes. Illinois workers and their families are also buying taxable goods and services, and paying sales taxes.
The CGFA November 2020 revenue estimates show a sharp improvement in State income tax receipts and sales tax receipts from the levels that had been expected in May of this year.
These updated projections come on the heels of the budget projection revisions issued by the Governor’s Office of Management and Budget (GOMB) at the end of last week.
State-sourced revenues from FY21 State income taxes are now expected to come in at a level that will be almost $1.5 billion/year higher than the numbers expected in May 2020.
Sales taxes are expected to come in at a level that is $730 million higher than the May 2020 estimate.
CGFA sees an additional $2.3 billion in General Funds revenues for FY21.
At the same time, these revised numbers do not come close to solving the State of Illinois’ continuing budget crisis.
The partisan budget enacted by the Democrat majority in May 2020, contained a budget deficit of $6.1 billion for FY21.
The Democrats’ budget could only be “balanced” by borrowing $5 billion in emergency loans from the U.S. Federal Reserve System, and a mix of $1.2 billion in additional emergency borrowing or revenue that had been hoped for from the now-failed graduated tax constitutional amendment.
Most of this multi-billion deficit remains as an urgent threat to Illinois’ economic future.
CGFA currently expects the FY21 budget, even with the new projected revenue increases briefly described here, to be $4.1 billion out of balance – compared to GOMB’s updated estimate of $3.9 billion.
Furthermore, with the statewide Tier 3 mitigation orders starting Friday, November 20, these numbers could again worsen.