Capitol Fax.com - Your Illinois News Radar » IGPA claims state revenue losses not as bad as expected
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
IGPA claims state revenue losses not as bad as expected

Tuesday, Jan 26, 2021

* IGPA

A new report from the University of Illinois System’s Institute of Government and Public Affairs (IGPA) found that Illinois’ state tax revenues have fared much better through the COVID-19 pandemic than originally projected last spring

The report, titled Data Indicate COVID-19 Impact on State Revenue Not as Severe as Feared, comes from IGPA’s Task Force on the Impact of the COVID-19 Pandemic. Report lead author Kenneth Kriz, who is the University Distinguished Professor of Public Administration and the director of the Institute for Illinois Public Finance at the University of Illinois Springfield, analyzed state data on tax receipts through November 2020.

What Kriz found may be good news for the state’s budget. The net loss to the General Funds from major revenue sources during the pandemic was $868 million. That’s less than 2% of total receipts for the General Funds, the state’s main accounts for general spending on things like education, healthcare, operations and more.

Several early projections, including an earlier report from the task force, anticipated much larger revenue losses. Most forecasters were predicting a prolonged recession that would cause revenue losses of up to 20%.

“There was a General Funds revenue loss in fiscal year 2020, but much of that was caused by the delay of the federal tax filing deadline,” said Kriz, who is an IGPA affiliate and a faculty lead for the Economic and Fiscal Impact Group of the task force. “Well over half of that revenue loss has been recouped in fiscal year 2021, and General Funds revenues are actually running above what might have been expected for fiscal year 2021.”

The loss across all state funds was $1.44 billion, which is still less of a loss than even conservative estimates projected in the spring.

Kriz said that the economy recovered more quickly than expected, with help from federal stimulus and recovery programs. The report also considered credit card spending data, and what it showed aligned with the findings on revenue. “There was a steep fall in spending in most categories in April and May, then a recovery toward pre-COVID-19 levels. Spending has not recovered completely, but it is near what it likely would have been in the absence of COVID-19,” Kriz wrote.

Still, Kriz warns that as long as COVID-19 is a threat, tremendous uncertainties remain. “If the virus surges again and the economy must be locked down, there will be another round of revenue losses,” he said.

The report notes that the unequal impact of the pandemic on low-income households was also a potential factor in the lower-than-expected revenue losses. “The labor market effects of the virus and mitigation measures fell more heavily on low-income households. High-income households have maintained their income levels or even seen them rise,” Kriz wrote. “And stimulus programs have buffered low-income household finances. Therefore, aggregate incomes and consumption have continued to grow, leading to stable or increased state revenue.”

OK, but just remember that revenues are only part of this equation. Illinois has borrowed billions that have to be repaid. And there’s still the matter of the structural deficit that was supposed to be addressed by the graduated income tax.

- Posted by Rich Miller        

11 Comments
  1. - Donnie Elgin - Tuesday, Jan 26, 21 @ 3:11 pm:

    =Impact on State Revenue Not as Severe as Feared=

    This report is like equating the current economic situation in Illinois to a swimmer trying to reach the surface. On this try the swimmer got so much closer to the surface, the bad news is we still drowned.


  2. - Chicago Cynic - Tuesday, Jan 26, 21 @ 3:20 pm:

    “OK, but just remember that revenues are only part of this equation. Illinois has borrowed billions that have to be repaid.”

    I hear ya, but hey, it’s good news for a chance and I’ll take it.


  3. - 1st Ward - Tuesday, Jan 26, 21 @ 3:21 pm:

    “OK, but just remember that revenues are only part of this equation. Illinois has borrowed billions that have to be repaid”

    Have other states? If not, then the current issues aren’t pandemic related are they?


  4. - North Park - Tuesday, Jan 26, 21 @ 3:24 pm:

    Thank our lucky stars that we started collecting sales tax from Amazon…


  5. - Candy Dogood - Tuesday, Jan 26, 21 @ 3:42 pm:

    ===And there’s still the matter of the structural deficit that was supposed to be addressed by the graduated income tax. ===

    Let’s just pull an Edgar and write a law that says to pay it later on after the magic growth occurs.


  6. - Ducky LaMoore - Tuesday, Jan 26, 21 @ 4:16 pm:

    “Let’s just pull an Edgar and write a law that says to pay it later on after the magic growth occurs.”

    That’s only a partial truth. The ramp did not work in part because it wasn’t followed.


  7. - RNUG - Tuesday, Jan 26, 21 @ 4:39 pm:

    Good short term news. Long term we will have to see. It will depend on the spending patterns of the more affluent; if they have gotten used to the convenience of the on demand delivery economy with its associated extra fees and continue the pattern, it might be good news for state revenue … as long as they are dealing with local / Illinois vendors. It’s probably too early to know if this on demand economy is a permanent shift of buying patterns.

    Anecdotally, a couple of families I know have gotten used to online purchase and delivery of their groceries. One family is lower income who you might not expect to pay extra for delivery; they claim the lack of impulse buying offsets the fees. So it might be permanent change. Guess we’ll know in a year or two.


  8. - Candy Dogood - Tuesday, Jan 26, 21 @ 4:43 pm:

    ===The ramp did not work in part because it wasn’t followed. ===

    The whole intent of the ramp was to make up for smaller payments at the start with huge payments by the time none of the elected officials involved were anticipating being in office or alive.

    “Not following it” is sort of a moot point because it originally called for an increase of almost no funding of the pension to 15 billion by 2044 and I have a hunch they didn’t really adjust for inflation when they came up with that.

    The only way for that to not be callously irresponsible is to sincerely believe that in that same time span your economy was going increase in size several times over and now we’ve got a generation of Illinoisans waiting in the wings that have to pay for their personal college debt, that have to figure out a way to address climate change without going extinct, while also paying for the public goods and services their grand parents received.

    That was the plan. I don’t see the merit in debating whether or not the bag we’re holding is larger than it was supposed to be.


  9. - Cool Papa Bell - Tuesday, Jan 26, 21 @ 6:44 pm:

    Guess $600 checks and enhanced unemployment actually works to help keep an economy afloat during a massive economic crisis.


  10. - Candy Dogood - Wednesday, Jan 27, 21 @ 12:23 am:

    ===enhanced unemployment actually works ===

    In some parts of the State the COVID-19 related unemployment benefits represents the biggest economic boost they’ve seen in a long, long time.


  11. - Touré's Latte - Thursday, Jan 28, 21 @ 8:28 am:

    “The ramp did not work in part because it wasn’t followed.”

    Please…


TrackBack URI

Sorry, comments for this post are now closed.


* Durbin, Duckworth outline Illinois-specific provisions in Senate's "American Rescue Plan" bill
* *** UPDATED x1 *** Pritzker's new EO includes change in eviction moratorium
* Reader comments closed for the weekend
* Pritzker to extend eviction moratorium
* Rate the state's new vaccination ads
* Question of the day
* 1,442 new confirmed and probable cases; 33 additional deaths; 1,166 hospitalized; 263 in ICU; 2.2 percent average case positivity rate; 2.8 percent average test positivity rate; 83,115 average daily doses
* CDC report: Masks decrease spread, but on-premises restaurant dining increases it
* Unemployment applications rose nationally last week, fell slightly in Illinois
* Kass (no, not that Kass, the smart one) argues against austerity
* Democrats, business leaders argue for phased approach to full reopening, and they want it to start soon
* Chicago Sun-Times: “Illinois Can’t Sit Back And Wait For The Federal Government To Do The Job.” CEJA Can’t Wait.
* Durbin agreed to back Harris before flipping to Kelly
* *** UPDATED x1 - Local 150 responds, criticizes plaintiffs *** Appellate ruling: Transportation lock box amendment doesn't apply to home rule units
* ALPLM hires first person of color as executive director
* Support The Illinois Healthy Youth Act – SB266
* Open thread
* *** LIVE COVERAGE ***
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............

...............

...............


Loading


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller