* As if the state’s problems aren’t bad enough, the Commission on Government Forecasting and Accountability has revised its Fiscal Year 2016 General Funds revenue projections down from $32.139 billion last July to $31.697 billion now. Click here for the full report.
COGFA hasn’t changed its personal income tax projection, but the corporate income tax revenue projection is now $130 million lower, sales taxes are projected to be $230 million lower than first estimated and the public utility tax forecast has been revised downward by $32 million…
Sales tax is forecast to grow only 1.9%, or $153 million. The relatively modest growth reflects lower fuel prices that have not translated into other consumer activity. Also, a modest rate of growth is appropriate given other conditions that may lead to a continued cautious consumer i.e. lack of a state budget and increased possibility of recession.
Emphasis added.
* The newly revised projections are more in line with the governor’s budget office projections, differing now by just $15 million. However…
In terms of the “Big Three”, the Commission is $372 million above levels forecast by GOMB. The estimates of corporate income tax are very similar, while the Commission’s outlook for sales taxes are $90 million less than GOMB as there appears little reason to expect growth over the remaining third of the fiscal year.
It is in the forecast of personal income tax that fairly significant differences can be found. While both agencies anticipate declines in final payments due to what appears to be the surprisingly strong performance earlier in the fiscal year as some taxpayers may have been slow to adjust to the lower rates, the Commission is quite comfortable at this stage in retaining its earlier forecast. Only until final payments are made in the coming months will this uncertainly be removed. If necessary, an adjustment can be made in early May.
- Norseman - Thursday, Mar 3, 16 @ 3:43 pm:
“Short term pain for … ”
The severity and duration of the pain is geometrically increasing as the hostage holding continues.
- Juvenal - Thursday, Mar 3, 16 @ 3:44 pm:
Republicans:
You have been handed a rare opportunity to act surprised and for the first time concede/admit/recognize that a tax increase is needed.
Don’t blow it.
- cdog - Thursday, Mar 3, 16 @ 3:46 pm:
Could we be seeing the evidence of the start of the RAUNER RECESSION?
I believe we just might be seeing the undeniable effects of this dastardly way of running a state.
- Beaner - Thursday, Mar 3, 16 @ 3:49 pm:
Not a problem for the Superstars, they’ll just ‘Executive Manage’ the opportunity.
- Huh? - Thursday, Mar 3, 16 @ 3:53 pm:
If only my turnaround agenda had been passed, none of this would be happenin’. Makin’ the State more business friendly will grow the economy.
- Omega Man - Thursday, Mar 3, 16 @ 4:05 pm:
A greater level of crisis just creates more opportinities for Rauner.
- Fusion - Thursday, Mar 3, 16 @ 4:05 pm:
We need to raise taxes.
- Michelle Flaherty - Thursday, Mar 3, 16 @ 4:09 pm:
Finally some new talking points for Republicans.
$36 billion in spending …
$31.697 billion in revenue.
They’ll have to spend all weekend practicing their new lines.
- Chucktownian - Thursday, Mar 3, 16 @ 4:19 pm:
“They’ll have to spend all weekend practicing their new lines.”
The GOP doesn’t have any new lines. They haven’t had any new lines in 30 years. It’s just the same old same old no matter what the situation.
And, for some reason, there are people who vote for them despite the fact that they never change.
- M Python - Thursday, Mar 3, 16 @ 4:21 pm:
Not a “Rauner Recession”, but a continuation of Madigan’s long term “leadership”
- Arizona Bob - Thursday, Mar 3, 16 @ 4:22 pm:
@Juvenal
=You have been handed a rare opportunity to act surprised and for the first time concede/admit/recognize that a tax increase is needed.=
Surrre we will, as soon as you Dems recognize that we need to take action to freeze increases in government salaries and benefits until this crisis is over, public union strikes (especially CPS) should be prohibited for the sake of fiscal sanity and “for the children”, we need to end unfair an unnecessary cost expenses for schools and municipalities by suspending “prevailing wage” featherbedding, we need to end pension spiking that unfairly increases pensions by massive amounts for which teachers didn’t pay their fair share over time, and we need to shift new pension costs back to the school districts since it was their decisions to overpay that led to much of the pension crisis.
While you’re at it, you can also come up with a plan so that Illinois spends about the same per pupil as national average, without losing quality, instead of spending 18% per pupil above that amount with no better than national outcomes.
Also get a plan to defer all non-urgent or cost necessary capital work, and cancel all capital work that isn’t under contract for all capital work that isn’t life or safety related.
Juvenal, do this and perhaps we can come to an agreement on increased sacrifice from taxpayers for the state.
Of course Ronald Reagan tried doing this in good faith when he first came into office. A Dem Congress agreed that they’d cut $3 in spending for every $1 in taxes he raised. The tax increase came, but the spending reduction never did.
Tip O’Neil was a heckuva lot more honorable than Madigan or Cullerton, and its tough to trust that new tax dollars won’t just wind up in crony’s pockets without solving the problem….
- Lucky Pierre - Thursday, Mar 3, 16 @ 4:30 pm:
What are the Democrats new lines?
- @MisterJayEm - Thursday, Mar 3, 16 @ 4:38 pm:
“Not a ‘Rauner Recession’, but a continuation of Madigan’s long term ‘leadership’.”
There’s no need to argue over this question. Let’s just look at the facts: COGFA has forecast modest growth due to “lack of a state budget”.
And who does the Constitution specifically hold responsible for preparing and submitting a budget?
See?
COGFA forecasts low growth due to the governor’s failure to prepare and submit a budget.
Easy peasy.
– MrJM
- Rich Miller - Thursday, Mar 3, 16 @ 4:39 pm:
===COGFA forecasts low growth due to the governor’s failure to prepare and submit a budget.===
Madigan and the economists he controls.
- Norseman - Thursday, Mar 3, 16 @ 4:42 pm:
Rich for the win!
- Soccermom - Thursday, Mar 3, 16 @ 4:53 pm:
Of course sales tax revenues are down. When people lose their jobs because the State is not paying its bills and supporting programs that make it possible for other people to hold jobs, they can’t buy things. And when people stop buying, sales tax revenues fall.
This is not actually rocket science.
- Ghost - Thursday, Mar 3, 16 @ 5:06 pm:
how much tax revenuenisnlost from inpaid vendors and employees who are notmpaying in taxes (since thy havent been paid) or sales tax since they have no money to spend
- Arizona Bob - Thursday, Mar 3, 16 @ 5:31 pm:
@Soccermom
Of course state revenues are down. With businesses with good paying jobs leaving the state in droves because of Springfield workman’s comp and pro-labor/anti business statutes and having the GA just sitting back and waiting for the balloon of state costs they inflated to burst, just about everyone who’s a producer who’s not on the dole or has a government job is either leaving or preparing an exit strategy.
You drive the income producers and those who contribute more than they take from the state coffers out, and guess what? Revenues go down.
A sustainable plan for increased revenue with serious cost control is necessary, but increasing revenue to Springfield without an economic recovery and cost control plan is just like giving a heroin addict just “one more fix” and expecting them to rehab themselves.
it just….don’t….work.
- yo - Thursday, Mar 3, 16 @ 5:34 pm:
Bruce
The village is showing signs of being on fire. Are you really going to let it burn down in order to save it? I understand you are dealing with political hacks, but get it done, man. Incremental change is the hallmark of democracy.
Sincerely
John Q Taxpayer and Proud Illinois Citizen
- nixit71 - Thursday, Mar 3, 16 @ 5:39 pm:
According to a previous COFGA report that provided historical numbers, revenue from personal income tax, corp income tax, and sales tax were as follows:
FY 2006 = $19.7B
FY 2016 = $25.9B
So the “Big 3″ revenue generators are up 30% in 10 years. But if you take inflation into account, revenues are only up 10%. That sounds good, until you realize the tax hike amounted to 25%. Pretty bad payback for such a large hike.
- anon - Thursday, Mar 3, 16 @ 6:00 pm:
I know I’ve cut back on spending due to all the uncertainty.
- wordslinger - Thursday, Mar 3, 16 @ 6:24 pm:
–A sustainable plan for increased revenue with serious cost control is necessary, but increasing revenue to Springfield without an economic recovery and cost control plan…–
Gee AB, you sound like some kind of Marxist central-command economist.
- AnonymousOne - Thursday, Mar 3, 16 @ 6:31 pm:
Crain’s seems to think our state is doing well in attracting businesses.
http://www.chicagobusiness.com/article/20150619/EMPLOYMENT/150619769/illinois-among-top-states-in-creating-businesses
- Tone - Thursday, Mar 3, 16 @ 6:59 pm:
Chicago had record retail sales last year. Too bad most of Illinois is an economic basket case of declining population and jobs.