COGFA: “Perfect storm” slams April revenues
Tuesday, May 5, 2020 - Posted by Rich Miller
* COGFA…
A combination of COVID-19 impacts, delayed tax filing deadlines, and comparative drop-off due to 2019’s “April Surprise”, all conspired to dramatically derail receipts as base revenues fell $2.740 billion. After managing to avoid much of the virus’ effects on March revenues, as foreshadowed in last month’s briefing, the impact on April’s receipts was unavoidable. In addition, the “tax day” deadline change to July 15th delayed approximately $1.3 billion in final payments into next fiscal year. And finally, the one-time nature of 2019’s “April Surprise” related to a surge in non-wage income taxes and federal sources, exacerbated this month’s comparative decline. April had the same number of receipting days as last fiscal year. […]
Gross personal income taxes fell a whopping $1.977 billion, or $1.678 billion on a net basis, while gross corporate income taxes dropped $482 million, or $377 million net. Again, the decreases were fueled by effects of COVID-19, tax day deadline changes, and the phenomenally strong performance of income taxes in April 2019. Sales taxes, after holding up in March due to receipts in “the pipeline”, couldn’t escape the economic shut down, as gross receipts dropped $143 million, or $146 million net. […]
Overall transfers fell $35 million for the month. Lottery transfers dropped $21 million as ticket purchases were likely impacted by stay at home orders. Other miscellaneous transfers were off $10 million, while no riverboat transfers were recorded as the Gaming Board has suspended casino operations [and video gaming] until further notice. Federal sources suffered a sizable $490 million downturn in April, despite increased Medicaid reimbursement percentages rising 6.2% due to the recently federally passed Families First Act. The decline in federal sources is largely tied to the “April Surprise” of 2019, whereby a voluminous amount of reimbursable spending was made possible due to the one-time surge of income tax receipts.
Personal income tax receipts dropped 48.5 percent below last April. Corporate income tax receipts fell 57 percent. Sales taxes were off 19.6 percent. Lottery receipts fell 29.6 percent.
* Fiscal year to date…
Excluding proceeds from the Treasurer’s Investment program as well as interfund borrowing, after incorporating April’s dramatic falloff of receipts, base general funds revenues have turned negative for the year—dropping $1.001 billion below last year’s levels [when those two items are included, the decline grows to $1.139 billion]. […]
With two months remaining in the fiscal year, gross personal income taxes are now down $1.113 billion, or $913 million net. Gross corporate income taxes are off $377 million, or $273 million net. While gross sales taxes are clinging to a $61 million gain [$102 million net], it is also expected to soon fall into negative territory. The performance of the remaining revenue sources continue mixed, but have experienced a combined $126 million decline.
Aided by gains associated to Refund Fund and Capital Projects Fund transfers, overall transfers to the general funds are still up $404 million. Federal sources, which have experienced wide monthly swings in performance this fiscal year, are now down $195 million.
Fiscal year to date, personal income taxes are down 5.8 percent, corporate income tax receipts are down 15.2 percent and sales taxes are up 0.8 percent (but that’s a lagging indicator because of how the taxes are remitted). Lottery receipts are down 17.2 percent and the state’s casino take is off 15.2 percent.
Income tax proceeds for the Local Government Distributive Fund were down $129 million in April vs. last April. Proceeds are down $75 million fiscal year to date.
* Related…
* $37.2 million in recreational pot sales in April
- Candy Dogood - Tuesday, May 5, 20 @ 11:06 am:
I can’t wait to hear from a group of legislators that didn’t think a revenue shortfall was a problem when Rauner was a governor.
- Rich Miller - Tuesday, May 5, 20 @ 11:13 am:
===can’t wait to hear from a group of legislators===
Or a certain editorial board.
- Oswego Willy - Tuesday, May 5, 20 @ 11:18 am:
The damage that needed correcting of the past four years will seem “manageable” compared to the loss of revenues here.
Eye popping figures
- Phenomynous - Tuesday, May 5, 20 @ 11:22 am:
Remember when the General Assembly was content to send unbalanced “spending plans” to the previous governor, arguing that he can manage and prioritize spending on his end?
Bet they don’t do that again.
- Merica - Tuesday, May 5, 20 @ 11:26 am:
The Cannabis Regulation Act is amazing. It’s a sea change and creating new businesses all around the State. Unfortunately, the revenue generated for recreational pot goes into a murky abyss. The act did not contemplate COVID 19.
Forget cannabis education and new programs for local law enforcement, re-write the bill and put cannabis revenue towards fixing the State’s budget!
- ISPRETIRED - Tuesday, May 5, 20 @ 11:32 am:
WOW 37 million.Now we know where a lot of the stimulus money was spent.
- Lucky Pierre - Tuesday, May 5, 20 @ 11:34 am:
The damage that needs correcting is the fantasy of the Pritzker budget that increases spending by 2 billion to 42 billion and proposes zero reforms of the drivers of the unbalanced budgets for the past 20 years.
- Oswego Willy - Tuesday, May 5, 20 @ 11:44 am:
=== proposes zero reforms===
“I’m frustrated too, but taking steps to reform Illinois is more important than a global pandemic that has no vaccine and isn’t trending downward”
Is that it - Lucky Pierre - or did I miss a harrumph… or a “fire Madigan” too.
Work shop it, lemme know when you get it on a t-shirt.
- Lucky Pierre - Tuesday, May 5, 20 @ 11:51 am:
Precisely!
The special interest groups that benefit from the increased spending and the unbalanced budgets aren’t the ones that are frustrated OW.
- RNUG - Tuesday, May 5, 20 @ 12:07 pm:
FWIW … because I had already budgeted for them, I sent my state tax payment in, and renewed the trailer plates on time. It’s only a drop in the bucket, but I figured the State needed every little bit.
- City Zen - Tuesday, May 5, 20 @ 12:08 pm:
Fund #0611: Fund for Illinois’ Future = $61,181
That sounds about right.
- McLincoln - Tuesday, May 5, 20 @ 12:10 pm:
“……..proposes zero reforms”
-Progressive income tax is a significant reform.
- RNUG - Tuesday, May 5, 20 @ 12:31 pm:
== proposes zero reforms of the drivers ==
Which drivers would you suggest be cut?
Pensions? Court took that off the table a while back, and we already have Tier 2 as the reform
Public Aid? Unemployment? Public Health? Social / Welfare programs in general? All those are needed more than ever right now.
State employee union raises and health care? You have to have people to run government … and you have to pay them to do so. Those wages and benefits were derived through contract negotiations, and are binding for the length of the contract.
Corrections? Law Enforcement? Did the public suddenly become 100% law abiding? They are already understaffed so where are you going to cut?
The above is close to 90% of the State budget. Remember, under Rauner’s no budget years, about 90% of the normal State budget ended up being court ordered or federally mandated spending.
About all that is left is regulatory agencies … Insurance, Financial, Human Rights, Aging, Natural Resources to name some of them. Unless you want to go back to the dog eat dog robber baron survival of the fittest decades, a number of those agencies serve as a check and balance.
Don’t get me wrong; I’m not saying some waste, fraud, abuse doesn’t exist. But the way budgets have been squeezed for many years, there isn’t all that much left. With a bunch of work, JB might be able to find another 2% - 3% overall to cut.
But right now the Governor has bigger things on his table: the pandemic, redistricting, tax reform, repairing the damage of the Rauner no budget years as just some of the big items.
- Spork - Tuesday, May 5, 20 @ 12:45 pm:
OW
What happened to the tshirt that reads Governors Own?
- Oswego Willy - Tuesday, May 5, 20 @ 12:48 pm:
=== What happened to the tshirt that reads Governors Own?===
So far… polling indicates that this governor does indeed own.., and getting great support by his decisions.
I cite Rich’s poll he released to the public here.
Anything else?