Pritzker's 5-year fiscal forecast for Illinois has $1.7 billion revenue increase
SPRINGFIELD, Ill. - An unexpectedly robust rebound in post-pandemic Illinois tax revenue reported Tuesday by Gov. J.B. Pritzker’s administration bodes well for the state’s future economic outlook.
But the five-year fiscal forecast by the Governor’s Office of Management and Budget is still marred by budget deficits in the out years, indicating a continued fundamental imbalance in revenues and expenditures.
Projected revenue has jumped so much that the Democratic governor intends to use more than $1 billion to pay down overdue bills and re-establish an emergency fund.
The current year, which ends June 30, 2022, should see an increase in revenue of $1.7 billion, including healthy increases in the big two revenue generators: Income taxes, up $837 million and a $596 million jump in sales tax revenues. Billions of dollars in federal pandemic relief has helped too.
But the state continues to grapple with a structural deficit, a built-in imbalance of expenditures over revenue. So in spite of the tightfisted monetary policy to which Pritzker lays claim, the GOMB notes the deficits will return in 2023. They’ll be much smaller than originally predicted, but will range from $406 million to over $1 billion in the five-year period.
The hot economy means that what was estimated to be a break-even 2022 budget will have a $418 million surplus. That’s a word unheard of in at least a half-decade, since the showdown between former Republican Gov. Bruce Rauner and legislative Democrats left the state without a spending plan from 2015-2017.
The 2022 surplus would be the balance after paying a chunk toward back-due bills, now at $7 billion, and re-establishing the Budget Stabilization Fund drained in 2017 and never replenished.
Pritzker will seek legislative approval for $913million to pay back-due bills to health care providers and $300 million to reload the rainy day fund, GOMB spokeswoman Carol Knowles said.
Another state albatross, a $144 billion gap in what is owed to state pension systems, should also benefit from a recharged economy and the pension funds’ portfolios perform better in a friendly market.
The Commission on Government Forecasting and Accountability, the legislative counterbalance to GOMB, issues a multiyear report in the spring. But its monthly report for October notes similar revenue increases for the current year’s first quarter over the last quarter of the previous year.