May 5, 2024 – With about three weeks to go before the Illinois General Assembly is scheduled to adjourn its spring legislative session, supermajority Democrats showed their strength last week as fiscal forecasters noted state revenues remain on track.
April is typically a make-or-break month for state coffers, as income tax filings can often yield higher- or lower-than-expected returns, affecting the current budget just as lawmakers sit down to approve a spending plan for the year ahead.
But for fiscal year 2024, which ends June 30, revenues are generally on track with where Gov. JB Pritzker’s office predicted they would be in his February budget address. That means as budget negotiations enter the final stretch, any new state spending would largely rely on redistributing funds the governor proposed allocating elsewhere, rather than on new, unexpected revenues.
The Commission on Government Forecasting and Accountability, which is the legislature’s fiscal forecasting agency, noted that April revenues finished $373 million ahead of last year’s output. But that’s partially due to the month having two more weekdays to process tax collections this year.
Read the report: COGFA’s April monthly briefing
“While this is welcomed growth to State coffers, the overall increase seen this month is largely in line with the Commission’s latest forecast,” Revenue Manager Eric Noggle said in the commission’s monthly report. “In other words, there is no ‘April Surprise’ from final income tax payments contained in this month’s numbers that will significantly modify this year’s revenue outlook.”
COGFA’s current outlook anticipates the year to end with $52.6 billion in revenue. That’s about $2 billion more than what lawmakers projected when they passed the fiscal year 2024 budget last May, and $374 million more than Pritzker estimated in February’s budget address.
But that doesn’t mean lawmakers will have a sudden multi-billion-dollar revenue surplus to spend. Pritzker accounted for excess revenues in his budget proposal in February and planned for $1.2 billion in supplemental spending.
Noggle, however, noted there’s still room for the needle to move, but it doesn’t appear likely.
“While some adjustments (both positive and negative) to individual revenue lines is possible, these potential changes may not necessitate an official revision, as it appears, at this time, that the bottom-line revenue totals will not see a significant modification,” Noggle wrote in the report.
Pritzker, meanwhile, said on Wednesday he was encouraged by the revenue performance.
“We’re always pleased, you know, to know that our revenues seem to be on track,” he said, later adding, “I feel pretty good about where we are.”
Pritzker also downplayed any concerns that the state’s fiscal landscape was worsening after several years of revenue growth.
“People have made more of what I said in the State of the State (Address) than I think is appropriate,” he said. “You know, it’s a tight year. But this is not like, it’s not like we’re running a massive deficit and we need to panic about how we’re going to balance the budget.”
The governor’s office is projecting about $53 billion in revenue for the upcoming fiscal year 2025 when including several of Pritzker’s proposed tax law changes, such as increasing the tax that sportsbooks pay and extending a cap on corporate net operating losses that businesses can claim on taxes. Factoring in those changes, the estimate is right on par with COGFA’s latest projection.
Lawmakers are scheduled to adjourn on May 24 this year, but they have until May 31 to extend the session without requiring a higher vote threshold to pass a budget in time for the July 1 start of the fiscal year.
By JERRY NOWICKI
Capitol News Illinois
jnowicki@capitolnewsillinois.com
