Governor's Budget Arm Projects $1.4 Billion Surplus
The Illinois State Capitol in Springfield.
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The state budget passed by the General Assembly in May left a razor thin margin between a projected surplus and deficit. But a new report from the Governor’s budget arm shows the state may be getting some breathing room.
The report from the Governor’s Office of Management and Budget (GOMB), is estimating $1.4 billion in revenue more than what was budgeted by the legislature in May.
The projection includes:
$214 million in higher than projected corporate income and sales tax revenue
One time $255 million bump from higher-than-expected income tax revenue (from last fiscal year)
$41 million in stronger-than-expected lottery sales
$405 million in one-time federal reimbursements
“State revenue growth has been notably strong for sources tied to economic activity, particularly collections of income taxes, sales taxes and investment income,” wrote GOMB Director Alexis Sturm. “Growth in income taxes has largely occurred due to wages and salaries that are rising well above historical trends.”
GOMB is not projecting a recession in the short term.
Meanwhile, State Comptroller Susana Mendoza announced Monday the state’s rainy day fund, which had been run dry in recent years, just hit a balance of $2 billion.
The state deposited $11.5 million Monday to top the $2 billion mark, what Mendoza called “on the road to respectability.”
“Whatever you think Illinois’ most important program is – funding our schools, policing our highways, caring for the elderly – that program is in jeopardy when a crisis strikes if Illinois has not built up a strong reserve,” Mendoza said. “The bond rating agencies have been telling us this for years and part of the reason we got our 9th credit upgrade last week is because we are building up our Rainy Day Fund.”
The Comptroller’s office says a $2 billion rainy day fund would operate government for 15 days.
Many advocates believe the state should have reserves as high as $5 billion.
Though, there has been growing pressure by some progressives in Springfield to tap into the fund to pay for pet projects or the migrant crisis facing the state.
Higher revenue estimates may quiet some of those concerns for a while.
