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* Let’s take a quick look at the Governor’s Office of Management and Budget’s revised projections as compared to GOMB’s forecast back in February, when the governor first released his proposed Fiscal Year 2021 budget.
Here are the revised FY2020 numbers…
Sales tax receipts - ($737 million) or 8.4 percent below February estimate
Total individual income tax receipts: ($1.336 billion) or 6.9 percent below February estimate
Individual income tax filing extension to July: ($1 billion)
Individual income tax receipts: ($336 million)
Total corporate income tax receipts: ($299 million) or 12 percent below February estimate
Corporate income tax filing extension to July: ($100 million)
Corporate income tax receipts: ($199 million)
Lottery: ($150 million)
Casino gaming: ($57 million)
Federal Sources: $459 million
All other changes: ($77 million)
GRAND TOTAL REVENUE CHANGE: ($2.198 billion)
————————–
GO Bond Debt Service Transfer Increase to Cover Decreases to the Capital Projects Fund: ($120 million)
Actions to Reduce FY20 Deficit
Defer Repayment of Treasurer’s Investment Borrowing: $400 million
Interfund Borrowing: $323 million
Short Term Borrowing Proceeds: $1.2 billion
Spending Controls: $25 million
Total Changes: $1.948 billion
REVISED SURPLUS/DEFICIT: ($255 million)
* FY2021…
Individual Income Taxes: ($1.765 billion) or 8.8 percent below February estimates
Corporate Income Taxes: ($442 million) or 17.8 percent below February estimates
Half-year revenue from potential graduated income tax: ($261 million) or 18.2 percent below February estimates
Sales Taxes ($1.585 billion) or 17.5 percent below February estimates
Lottery Proceeds ($92 million)
Casino Gaming ($7 million)
Other sources and transfers in to the general funds: ($472 million)
GRAND TOTAL REVENUE CHANGE: ($4.625 billion)
Short-term bond repayment and pay off rollover from the Treasurer’s investment borrowing: ($1.6 billion)
TOTAL PROJECTED DEFICIT: ($7.4 billion) without graduated income tax; ($6.2 billion) with graduated income tax
I gotta figure that’s too low, but whatevs.
To put this into context, back in June of 2017, a month before the logjam finally broke and the General Assembly passed a budget and an income tax hike over Gov. Bruce Rauner’s veto, Illinois’ FY17 budget deficit was estimated by COGFA to be $6.2 billion.
So, we’re right back to square one without help from the federal government. Or even worse if the constitutional amendment fails.
Ducky.
* Coverage roundup…
* Illinois coronavirus revenue loss pegged at more than $7 billion
* Pritzker: Virus will cost state budget billions
* Pritzker admin forecasts multi-billion-dollar budget hole
* Pritzker: Illinois could face budget deficit due to COVID-19
* COVID-19 numbers crunch packs one-two punch: Pritzker sees $2.7B budget jab now, $6.2B later* Pritzker says state could face $7.4 billion budget gap in 2021
posted by Rich Miller
Thursday, Apr 16, 20 @ 12:55 pm
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Where is the scenario with his proposed 6.5% cuts?
“1) Propose in your annual submission to GOMB an actionable scenario that includes
operational efficiencies reflecting a 6.5% reduction from an estimated maintenance.”
https://www.nprillinois.org/post/gov-agencies-prepare-budget-cuts#stream/0
Comment by Donnie Elgin Thursday, Apr 16, 20 @ 1:04 pm
This is much worse than the Great Recession. 6.5 percent cuts will barely scratch the surface.
Absent large federal grants, we will see a dismantling of state government. It was hollowed out going into this disaster. Or we will see large, probably temporary, tax increases.
I expect pension holidays are coming.
Comment by Last Bull Moose Thursday, Apr 16, 20 @ 1:21 pm
==Where is the scenario with his proposed 6.5% cuts?==
That scenario is out the window. Even the assumptions for that would have changed. Don’t worry, there will be more scenarios that will be worked up.
Comment by Demoralized Thursday, Apr 16, 20 @ 1:23 pm
1) Feds temporarily cut the payroll tax by 2 percentage points. The vast majority of the workforce benefits, including employers.
2) State temporarily raises the income tax by 2 percentage points. Not only is the deficit covered, but it’s a progressive solution because those earning above the social security limit end up paying more.
Vast majority of working families break even or come out slightly ahead because, unlike payroll taxes, retirement contributions and state income taxes are tax deductible.
Comment by City Zen Thursday, Apr 16, 20 @ 1:26 pm
I’m wondering if the estimates take into account that UI benefits are considered taxable income, and with the additional weekly PUC benefits added, a few people might even exceed their current weekly withholding amounts. Granted that the taxes are not deducted from weekly benefits, they do become due and owing next April.
Comment by Commonsense in Illinois Thursday, Apr 16, 20 @ 1:27 pm
Yep. Going to be bad. Already seeing complaints about cutting workers benefits. They just won’t quit.
Comment by Generic Drone Thursday, Apr 16, 20 @ 1:31 pm
As far as cuts, we should not speak avidly in favor of those. Who practically salivates at the prospect of whacking the poorest, sickest, most vulnerable, students, state workers, merit comp and many others? Never mind, I know, but let us please tread as lightly as we can on that ground.
A flat tax hike is a far worse option than passing the graduated income tax and a modest hike on sufficiently-high incomes (see neighboring progressive tax states’ rates). We’d truly be “crushing” the middle class and small businesses with a flat tax hike. And then harsh cuts on top of that?
Comment by Grandson of Man Thursday, Apr 16, 20 @ 2:00 pm
This is going to affect most states similarly, especially those that are more reliant on sales tax receipts. This might be a good time for the Federal Reserve Bank to provide some zero interest loans to get states through this liquidity crisis.
I mean, we did it for Wall Street banks. Keeping states solvent seems to be a national priority to me.
Comment by 47th Ward Thursday, Apr 16, 20 @ 2:49 pm
==As far as cuts, we should not speak avidly in favor of those.==
There are around 5,000 state university faculty members making over $100,000. What financial sacrifices will they make to protect the poorest, sickest, most vulnerable, students, state workers, merit comp and many others?
Have any university presidents, chancellors, and officers stepped up to take a pay cut this year? That would be a nice start.
Comment by City Zen Thursday, Apr 16, 20 @ 3:37 pm
“There are around 5,000 state university faculty members making over $100,000.”
If they earn over $250,001/year, they should get a tax hike. If not, it’s still less fair to cut them than taxing those who earn above $250,001.
Until the graduated income tax question is answered at the polls, there’s zero reason why we should cut one person while upper-income earners don’t pay a higher state income tax. But, you propose a temporary flat tax hike, raising the rate on everyone. Anything but taxing the rich more. Understood.
Comment by Grandson of Man Thursday, Apr 16, 20 @ 4:11 pm
47th Ward. I don’t see how no interest loans help meet a balanced budget requirement. They might help with skipping pension payments.
Comment by Last Bull Moose Thursday, Apr 16, 20 @ 4:13 pm
==you propose a temporary flat tax hike, raising the rate on everyone.==
Only if it coincided with an equal temporary payroll tax cut. The point was to shore up state finances at the expense of the feds without raising the taxes on the vast majority of taxpayers, which that plan would accomplish.
Comment by City Zen Thursday, Apr 16, 20 @ 4:18 pm
The most damaging actions are further shred our social safety net, cut jobs and raise taxes on everyone. Single folks earning over $120K /year, couples earing over $220K per year can pay a little extra to keep things going. Those earning over 250K can pay more. The graduated income tax can put us on the road to solvency. Budget cuts will deepen the downward spiral.
Comment by Froganon Thursday, Apr 16, 20 @ 6:25 pm