Illinois' Positive and Negative Fiscal Condition
The Illinois Capitol in Springfield.
In our discussion last week with Comptroller Susana Mendoza, we discussed the improved financial condition in the state. There seem to be two schools of thoughts. Democrats in charge tell you things are on the up-and-up. There are some on the right that focus on the worst credit rating of any of the 50 states and an outlandish pension debt.
I was looking through the latest briefing from the bicameral, bipartisan Commission on Government Forecasting and Accountability (COGFA) and Chief Economist Benjamin Varner had some interesting notes on the state of the economy.
“In 2021 the GDP of Illinois was $945.7 billion. This was the fifth largest economy in the U.S. behind California, Texas, New York, and Florida. Illinois’ economy has averaged growth of 3.5% per year since 1997. This is well below the country as a whole’s growth of 4.3% per year. Illinois ranked 42nd among the states for economic growth during this time period.”
While there is obvious improvement improvement, we’re still behind the pace of other states.
Cannabis revenue is down around $500,000 from the second quarter of FY22 to FY23 (Oct-Dec).
Legal sports wagering revenue fell slightly ($113 million to $111 million) from FY21 to FY22 (the fiscal year that ended June 30.) COGFA anticipates those revenues to grow.
The General Assembly repealed the roughly two cent per gallon inflation adjustment in the gas tax for the final six months of 2022. COGFA estimates that cost roughly $70 million in tax revenue (and didn’t provide a lot of relief for taxpayers.)
COGFA’s Eric Noggle also wrote that many of the state’s revenue sources are beginning to slow.
“After months of robust levels of growth for much of the fiscal year, two of the major State sources, personal income tax and sales tax receipts, experienced a noticeable slowdown in December,” Noggle wrote. “Personal income tax revenues grew a meager $13 million on a gross basis, or $9 million after the subtraction of non-general fund distributions. Sales tax gross receipts fell for the first time this fiscal year, falling $13 million from last December’s levels, or $56 million net. While this weaker performance is noteworthy, it will take a couple more months of data to see whether this is the start of a significant downward trend in these receipts, or if the slowdown is simply due to a timing element related to the reporting of receipts over the last month.”
Overall, though, the state’s general fund receipts are up over $1.7 billion dollars from last year.
Read the report here.
