SPRINGFIELD – Revenues flowing into state coffers surged in the fiscal year that ended June 30, spurred largely by an influx of federal funds, the delayed deadline for filing income tax returns last year and an economic recovery that boosted income and sales tax collections beyond what had been estimated. A report from the Commission on Government
SPRINGFIELD – Revenues flowing into state coffers surged in the fiscal year that ended June 30, spurred largely by an influx of federal funds, the delayed deadline for filing income tax returns last year and an economic recovery that boosted income and sales tax collections beyond what had been estimated.
A report from the Commission on Government Forecasting and Accountability, a legislative agency that monitors the budget and state revenues, showed base receipts to the General Revenue Fund jumped nearly $6.8 billion, or 17.8 percent, during the fiscal year, fueled by big increases in personal and corporate income taxes and retail sales taxes.
That growth does not include money the state borrowed from the Federal Reserve last year or any of the money the state routinely borrows on a short-term basis from other state funds.
Combined net income tax receipts, both individual and corporate, grew by more than $5.5 billion over the previous year, to a total of just over $26 billion. That was more than $1 billion more than CGFA had estimated as recently as May, and it was over $1.7 billion more than the Governor’s Office of Management and Budget had estimated.
Part of that growth, about $1.3 billion, was the result of the 2020 tax filing deadline being pushed back to July due to the pandemic, but the rest was the result of economic growth as life gradually started returning to what the report called “post-COVID normalcy.”
Sales tax receipts also grew by $1.1 billion as consumer demand, boosted by federal stimulus payments as well as an improved job market, helped lift retail spending. That was $179 million more than CGFA had forecast and $250 million more than GOMB’s estimate.
All other sources of revenue, totaling about $3.1 billion, came in lower than the previous year and below what forecasters had expected.
Transfers to the general revenue fund from the state lottery also grew by 23.3 percent, to $777 million. But that was partially offset by the fact that the no revenue from riverboat casinos was transferred to the general revenue fund during the fiscal year. In the prior fiscal year, $195 million in casino revenue was transferred to the GRF.
Illinois also saw a big increase in federal receipts, which totaled more than $4.7 billion.
“Overall, FY 2021 proved to be another challenging year for revenue estimating,” the report stated. “While the Commission performed better in the estimates related to the larger economic related sources such as personal and corporate income tax as well as sales tax, the GOMB’s projections of transfers as well as federal sources ended the fiscal year closer to actuals.”
The report also noted that Illinois borrowed $1.2 billion at the end of the past fiscal year through the Federal Reserve’s Municipal Liquidity Facility to make up for revenue the state lost during the initial phase of the pandemic. The proceeds were used to pay down Medicaid-related bills that had been pending in the comptroller’s office.
Starting in November, the state began paying back that loan and the final payment was made on June 5.
The state borrowed another $2 billion from the Fed in December to pay additional Medicaid-related bills, which drew down an additional $1 billion in federal matching funds. That borrowing is due to be paid back over three years but state officials have said that due to growing revenues, they plan to repay it entirely within the current fiscal year, which ends June 30, 2022.
The past fiscal year was also the first full year of legalized recreational marijuana in Illinois. Overall, the state took in $186 million in cannabis-related revenue, including $177 million in excise taxes and $9 million in license and registration fees.
Of that, $55.3 million was transferred to the general revenue fund, $39.5 million was used to fund criminal justice information projects and $15.8 million went to the budget stabilization fund.
Leave a Comment
Your email address will not be published. Required fields are marked with *