New revenue estimates for the State of Illinois are out from COGFA, the state’s Commission on Government Forecasting and Accountability.

For the current fiscal year, which ends on June 30, revenues look good. “Through the first two-thirds of FY 2022, overall base receipts are up an impressive $2.125 billion [over the previous fiscal year],” says COGFA.

The problem is next year. For the fiscal year starting this July, COGFA projects a 4.5% decrease in revenue. That means an overall reduction in revenues of $2.171 billion. That falloff includes the one-time impact of money from the federal government under the American Rescue plan.

Importantly, however, it also includes a forecasted drop of $671 million in general funds revenues.

There’s plenty of uncertainty in these projections in light of recent economic chaos. As COGFA said, understatedly, “recent history shows that unpredictable events could alter the landscape and impact on these forecasts.”

What has been clear to us, however, is that current tax revenues have been artificially spiked by the astonishing amount of money pumped into Illinois by the federal government under the guise of pandemic relief, which now totals some $180 billion. That includes not just the $8.1 billion that went directly to the state, but all private sector assistance that helped generate current tax revenue.

Gov. JB Pritzker recently testified before a Congressional oversight committee and claimed that Illinois now has budget surpluses projected “for years to come.” We’ve never seen any such projection from any office in Illinois. Once the federal pandemic relief ends, Illinois’ fiscal crisis will return, unchanged.

-Mark Glennon