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* Good news…
COGFA: APRIL REVS CHANGE COURSE FROM LAST YEAR’S PERFECT STORM—RECEIPTS SNAP BACK DUE TO TIMING & STRONG UNDERLYING ECONOMIC PERFORMANCE…1 year removed from receipts dropping $2.74B as pandemic abruptly manifested in April 2020 revs, base gf revs in April 2021 grew $1.779B….
— yvette.shields@arizent.com (@Yvette_BB) May 5, 2021
* From the COGFA report…
One year removed from receipts dropping $2.74 billion as the pandemic abruptly manifested in April 2020 revenues, base general funds revenues in April 2021 grew $1.779 billion. Continued strong performance from both personal income and corporate income tax receipts were again complemented by an impressive month for sales tax revenues. In addition, federal sources also posted an impressive monthly gain. The number of receipting days were the same as last year.
For the month, gross corporate income taxes jumped $767 million, or $614 million on a net basis. Much of the comparative gain can be attributed to last April’s delayed final payments, which fell into early FY 2021. In addition, preliminary analysis suggests that corporations, in the face of pandemic disruptions, quickly adjusted down their estimated payments in the first half of tax year 2020. However, as the economy recovered much quicker than originally expected, those lower estimated payments were insufficient to meet tax year 2020 liabilities and higher final payments have been the result. [Further analysis of component data is needed to confirm this view].
Gross personal income taxes also grew substantially in April as receipts rose $619 million, or $533 million on a net basis. A couple of key reasons likely comprise this level of growth. While the deadline for final personal income tax payments were extended, as they were last year, they were only done so for an extra month [as compared to last year’s three-month extension]. Consequently, taxpayers were less incentivized to put off filing their final return. Preliminary estimated payments, whose deadline was not extended, but reflecting anticipated economic improvement, also appear to have been very strong [again, component breakdowns of monthly data will have to be examined before definitive conclusions can be made].
Gross sales tax receipts jumped $301 million, or $297 million on a net basis. This dramatic year-over-year gain is the consequence of the manifestation of the economic shutdown in last April’s sales tax receipts, coupled with the timing of the most recent stimulus payments and further increase in consumer confidence. […]
Year To Date
Excluding borrowing related activity, through the first ten months of the fiscal year, base receipts are up $4.920 billion. In addition to a surge in federal sources, that growth also reflects the timing of income tax receipts related to last year’s [2020] filing deadline extension, as well as the positive trajectory of underlying economic conditions. Through April, combined net income tax receipts are up $3.406 billion. While approximately $1.3 billion of those gains continue to be attributed to the shift of FY 2020 final payments into early FY 2021, stronger than previously expected income tax performance continues to impress. Also viewed positively is the continued upward trend of sales tax receipt performance as net receipts are up $557 million. Only now beginning to compare against those months most impacted by the economic shutdowns of a year ago, sales taxes seem to be reflecting positive consumer reactions to stimulus payments, improving job picture, and stronger consumer confidence. […]
While the full story of FY 2021 revenues has yet to be written, given the onset of the pandemic, receipts clearly have performed much better than any prognosticator could have foretold one year earlier. Despite periodic upward revisions in the revenue projections throughout the course of the fiscal year, each time those updated expectations have been met and exceeded. That said, as illustrated by the previous section which demonstrates the extreme volatility of some key revenue sources, often times swings in one direction are met with opposing subsequent pressure, particularly when viewed in terms of year-over-year growth measures. Underlying economic performances of the major revenue sources are sometimes trumped by aspects of receipt timing, tax policy changes at the state and/or sometimes federal level, and other unforeseen extraneous events. While uncertainty is less heading into upcoming FY 2022 than last year, it still is much higher than normal. The unwinding of the various stimulus programs such as direct stimulus payments, augmented unemployment benefits, rental assistance and other business and consumer focused benefits, will likely create some headwinds related to growth rates. All that without mentioning the specter of the return of the virus in the fall and/or resistant variant strains.
Remember, this is for the current fiscal year. But this will likely cause at least some readjustment in revenue forecasts for next fiscal year during budget talks.
posted by Rich Miller
Thursday, May 6, 21 @ 11:40 am
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Hmm.
=== - Lucky Pierre - Thursday, May 6, 21 @ 10:40 am
Reading is fundamental
I said JB would be graded on his COVID response and the situation in Illinois relative to the neighboring states and the rest of the country and the economic recovery.
You disagree?===
Ask COGFA…
=== Continued strong performance from both personal income and corporate income tax receipts were again complemented by an impressive month for sales tax revenues. In addition, federal sources also posted an impressive monthly gain. The number of receipting days were the same as last year.===
Is that bad news?
Comment by Oswego Willy Thursday, May 6, 21 @ 11:43 am
More $$ than predicted
More people that predicted
Looks like IL back to be a Garden of Eden!
Comment by Annonin' Thursday, May 6, 21 @ 11:44 am
“this will likely cause at least some readjustment in revenue forecasts for next fiscal year during budget talks.”
Which would be a big mistake. The amount of free money flowing in the economy right now (stimulus, PPP), that won’t be there next year, is significant.
Comment by Ducky LaMoore Thursday, May 6, 21 @ 11:46 am
@OW, LOL. I don’t think you will hear from LP on this positive Illinois economic news.
Comment by JS Mill Thursday, May 6, 21 @ 11:48 am
The revenue increase is good news however, it is likely transitory…
Underlying economic performances of the major revenue sources are sometimes trumped by aspects of receipt timing, tax policy changes at the state and/or sometimes federal level, and other unforeseen extraneous events. While uncertainty is less heading into upcoming FY 2022 than last year, it still is much higher than normal.
Comment by Donnie Elgin Thursday, May 6, 21 @ 11:50 am
===Which would be a big mistake===
Not necessarily.
Comment by Rich Miller Thursday, May 6, 21 @ 11:50 am
Positive news is always welcome even if it is distorted by billions of dollars in “free” stimulus.
Do you settle your bets on the Bears game after the first set of downs or wait until the game is over?
Comment by Lucky Pierre Thursday, May 6, 21 @ 12:31 pm
Watch out Florida, Texas etc, Illinois is back!!
Nice to hear good economic news for our state for a change.
Comment by BTO2 Thursday, May 6, 21 @ 12:42 pm
LP, when in your uh, “mind”, will Illinois’ game be over?
Comment by Flying Elvis'-Utah Chapter Thursday, May 6, 21 @ 1:05 pm
=== distorted by billions of dollars in “free” stimulus.===
You’re against the stimulus?
That’s not a surprise, lol
=== Do you settle your bets on the Bears game after the first set of downs or wait until the game is over?===
So you’re betting “against” Illinois.
You sure you’re not Bruce Rauner?
Comment by Oswego Willy Thursday, May 6, 21 @ 1:07 pm
“Watch out Florida, Texas”
Say what you will about Illinois, I had family in Texas this winter who lived like it was 1858 for about five days.
Me, I had the furnace on, watching Netflix.
Comment by Flying Elvis'-Utah Chapter Thursday, May 6, 21 @ 1:07 pm
Before you order the ticker tape parade acknowledge tax receipts only recovered 2/3 of the drop from last year and were fueled by the federal stimulus, not organic economic growth.
One year removed from receipts dropping $2.74 billion as the pandemic abruptly manifested in April 2020 revenues, base general funds revenues in April 2021 grew $1.779 billion.
Gross sales tax receipts jumped $301 million, or $297 million on a net basis. This dramatic year-over-year gain is the consequence of the manifestation of the economic shutdown in last April’s sales tax receipts, coupled with the timing of the most recent stimulus payments and further increase in consumer confidence. […]
Comment by Lucky Pierre Thursday, May 6, 21 @ 1:50 pm
==Positive news is always welcome even if it is distorted by billions of dollars in “free” stimulus.==
What’s the “distortion”? The money exists, it’s in the accounts.
Comment by Arsenal Thursday, May 6, 21 @ 2:04 pm
I think this is good news for Illinois. Going forward I still think we need to find both additional ways to save money and find more revenue. We have made some progress under our current Governor as we continue to dig our way out of a $16 billion backlog of unpaid bills leftover from our previous administration.
Comment by The Dude Abides Thursday, May 6, 21 @ 2:16 pm
LP, so when the state re-opens next month money won’t be spent by those who can’t wait to get out of the house?
Of course tax receipts were down, there was this pandemic thing, it was in a couple of papers.
Would you use this same inane analysis when tax receipts for say, December was higher than January?
Comment by Flying Elvis'-Utah Chapter Thursday, May 6, 21 @ 2:20 pm
==Before you order the ticker tape parade==
We’re inventing a lot of guys to be mad at today, lol.
==fueled by the federal stimulus, not organic economic growth. ==
Whooooooo caaaaaaares. Certainly not the students who will now see more school funding, the patients who will see their hospitals stay open, or the tradesmen who will see more public works projects to work on. Federal stimulus money isn’t paid in secret “Not As Good” dollars.
Comment by Arsenal Thursday, May 6, 21 @ 2:44 pm
I await the IPI paper praising the Governor’s fiscal stewardship of the state.
Comment by Advocate Thursday, May 6, 21 @ 5:29 pm
Any comment dashing this new optimism yet from Comptroller Mendoza?
Comment by EssentialStateEmployeeFromChatham Thursday, May 6, 21 @ 6:14 pm