The state doesn’t collect near as much money as its elected officials want to spend. But its has more than it anticipated.
Looks can be deceiving, and they often are. But a recent financial report paints a rosier — and likely temporary — picture of Illinois’ budget.
“Excluding borrowing-related activity, base receipts finished the fiscal year up a stunning $6.792 billion,” the state’s Commission on Legislative Forecasting and Accountability stated in its report for June finances. “In addition to a surge in federal sources, that exceptional growth also reflected the timing of income-tax receipts related to last year’s  filing deadline extension, as well as stronger underlying economic conditions as post-COVID normalcy returns by degrees. For the fiscal year, combined net income tax receipts were up $5.536 billion.”
Combined personal and corporate income-tax receipts came in at around $26 billion, $1 billion higher than estimates, while sales-tax receipts jumped up to $93 billion, $179 million more than was estimated.
The report’s authors said inheritance, insurance and corporate franchise taxes generated increases while “those gains were erased by lower-interest earnings, public utility tax receipts, as well as other miscellaneous revenues.”
The commission’s report is chock full of interesting numbers that give a complete picture of where the state is now. But, as demonstrated by both the commission’s and the administration’s previous inaccurate estimates, it’s not nearly so good at predicting where the state will be in six months or a year.
But, for a variety of reasons, Illinois’ fiscal situation is better than it was. That’s why analysts recently boosted its bond rating up from one notch above “junk” status to two notches above it.
The commission stated that strong revenue growth, federal bailout funds, paying down debts and a big reduction in unpaid bills were “some of the factors for improving” Illinois’ financial outlook.
The question, however, is what the future holds, and there’s no clear answer.
The economy, which is recovering from the lockdowns forced by the pandemic, looks relatively good, but still has considerable room to grow. Unfortunately, there are too many unfilled jobs in the private sector to be confident that Illinois’ economy will return to its pre-pandemic growth rate.
Circumstances, of course, could be much worse, and in fact, they have been. As has been stated previously, any little bit helps.
That’s why the report is welcome news. The trick, however, is to keep it going forward in our uncertain economic and fiscal environment, and that won’t be easy.