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* The Census adjustment wasn’t the only good news for Illinois during the holiday break. From COGFA…
FY 2024 revenues through December continue to be well ahead of last fiscal year’s pace. Overall, revenues deposited into the State’s General Funds are $753 million higher than last year’s levels through the first half of the fiscal year. When accounting for “one-time” revenues in both FY 2023 and FY 2024 related to Federal deposits, reimbursements, and this December’s transfer of excess P.A. 102-0700 funding, the “base” growth through the first six months of the fiscal year is a very respectable +$736 million.
The Personal Income Tax continues to see the largest revenue gains this fiscal year. Through December, these tax receipts are up $855 million (or +$704 million on a net basis). Again, part of the reason for the strong performance is because of the inclusion of two “true-up” installments totaling $431 million. Without these reallocations, year-to-date growth would be reduced, but still at a solid +$424 million or 3.5% above last year’s pace. Conversely, Corporate Income Tax receipts are $233 million lower (or -$171 million net). However, when accounting for the $104 million in negative reallocation adjustments so far, this fiscal year, the gross declines would be at a more respectable -$129 million, which is only 4.0% behind last year’s healthy pace. In other words, each of the income tax revenue sources have performed quite well through the first half of FY 2024, especially when considering the economic uncertainty heading into the fiscal year.
While the growth in Sales Tax receipts remains positive, it continues to slow as compared to last year’s levels. Through December, revenues are $94 million or +1.6% higher than FY 2023. On a net basis, the six-month growth is +$39 million or +0.7%, which is markedly lower than FY 2023’s pace of +2.1%. A primary factor for this slowdown is falling inflation levels. While inflation evoked many long-term economic concerns, it resulted in creating higher priced goods, which led to corresponding strong levels of Sales Tax revenues in recent years. As inflation rates subside, the growth in Sales Tax receipts has weakened and will likely continue to moderate absent a significant rise in the amount of products sold.
Despite its overall drop in December, a continued bright spot in FY 2024 revenues continues to come from All Other State Sources, which is up a combined $143 million through the first half of the fiscal year. This growth comes primarily from two areas: Interest on State Funds & Investments [+$194 million] and the Inheritance Tax [+$68 million]. The performance of these two revenue sources has easily offset overall declines in Insurance Taxes [-$35 million]; Public Utility Taxes [-$30 million]; Other Sources [-$27 million]; the Cigarette Tax [-$16 million]; the Corporate Franchise Tax [-$9 million]; and the Liquor Tax [-$2 million].
* Bond Buyer…
Illinois saw an uptick in its fiscal fortunes in the past fiscal year, one of the few times the state’s net position has improved since that figure swung from black to red in 2002.
The net position includes tax collections and government services and measures the state’s assets relative to its total obligations. For the second year in a row, Illinois managed to move its net position in a positive direction, according to an interim Annual Comprehensive Financial Report published this month by State Comptroller Susana Mendoza.
At negative $163.1 billion when the fiscal year ended June 30, the state’s net position improved by $18.1 billion, 10% better than fiscal 2022’s negative $181.2 billion. That represented Illinois’ best net position in six years, but it was still among the worst of all states relative to the size of Illinois’ expenses.
* The Daily Herald reported that the Taxpayers’ Federation of Illinois is seeing at least some improvement on pensions…
The Edgar Ramp, coupled with other legislative decisions that widened the funding gap over the past two decades, created more debt for future taxpayers, experts said. Only recently has noticeable progress been made.
“We’re obviously still a long ways away from the target amount, and both returns on investments as well as any changes to benefits put that at risk,” said Carol Portman, president of the Taxpayers’ Federation of Illinois. “Still, I don’t think it’s as dire as it was a couple years ago.”
* From the University of Illinois’ Institute of Government and Public Affairs…
The U of I Flash Index for December 2023 increased slightly to 102.8 from its 102.6 reading in November. The index for calendar 2023 remained in a tight range around the 103 level—reflecting stability in a period of overall turmoil.
“Uncharacteristically, the Illinois and U. S. economies were remarkably steady amid troubling events including the attacks in Gaza and the aftermath, the continuing war in Ukraine, the unresolved border crisis in the U. S., and the political woes of a dysfunctional Congress and the prospect of another divisive presidential election.”
* Crain’s reported on JPMorgan Chase’s 2024 Business Leaders Outlook survey…
Pessimism about the state of the economy writ large has tempered in recent months, and business leaders in Illinois are particularly bullish about the year ahead relative to their counterparts in other regions of the country. […]
Leaders in Illinois have a particularly positive outlook toward the state’s local economy. Sixty-one percent of the Illinois respondents reported feeling optimistic about business in the region, compared to 46% of respondents nationwide.
Illinois business leaders also tend to be more optimistic about the national and global economies than folks elsewhere. Fifty-nine percent of respondents from Illinois are optimistic about the national economy, compared to the overall average of 43%.
* And the governor crowed about another bit of good news this week…
Good news from the US Bureau of Economic Analysis, Illinois.
The avg. personal income in our state increased year to year by $3,677 — the highest per-capita change in the Midwest and the sixth largest in the nation.
That's our pro-worker policies benefitting working families.
— Governor JB Pritzker (@GovPritzker) January 8, 2024
More here.
* Also, from Crain’s…
Gov. J.B. Pritzker and his staff have spoken with United Airlines officials who have assured them the company isn’t planning to leave Illinois.
United’s purchase of a large chunk of land in Denver for a flight-training facility — and its recently filed plans that also include the prospect of a large corporate campus — set off alarms that the company’s headquarters might be in play. […]
United declined to comment beyond its previous statement that “we have been here in Chicago for decades and have thousands of employees here. The land in Denver gives us options for the future as we implement our big plans to grow.” The company didn’t address the specific question of its corporate headquarters.
From Jordan Abudayyeh…
Both the Governor and members of his administration have had conversations with United regarding their plans for a campus in Colorado and United assured the Governor’s Office they have no intentions of moving out of state. The Governor recently had a conversation with senior leadership at United within the last month and they once again assured the Governor they are committed to Illinois and have no plans to leave the state.
posted by Rich Miller
Tuesday, Jan 9, 24 @ 12:21 pm
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Despite the harangue of doom and gloom coming from the cult, propagandists and clickbait media, we’re doing pretty good considering problems we’ve seen from the pandemic and wars. That’s due to leadership from the Dems.
Comment by Norseman Tuesday, Jan 9, 24 @ 12:36 pm
Somehow the IPI types will spin all of this as bad news . . .
Comment by Demoralized Tuesday, Jan 9, 24 @ 12:41 pm
In January 2020 a large Coke at my local McDonald’s was $1.00. Today it’s $1.49. That’s 49% inflation over 4 years. $3,677.00 doesn’t come close to having my salary keep up with inflation.
Comment by Papa2008 Tuesday, Jan 9, 24 @ 12:45 pm
=$3,677.00 doesn’t come close to having my salary keep up with inflation.=
Spending your money on Coke will do that to you.
Comment by Pundent Tuesday, Jan 9, 24 @ 12:51 pm
And there we go . . . I knew someone would say something negative. Some of you just can’t help yourselves.
Comment by Demoralized Tuesday, Jan 9, 24 @ 12:52 pm
Hey Jordan - first rule of being a good spokesperson is not to speak for people you don’t work for. I’ll believe it when United says it.
Comment by Just Me 2 Tuesday, Jan 9, 24 @ 1:02 pm
===In January 2020 a large Coke at my local McDonald’s was $1.00. Today it’s $1.49. That’s 49% inflation over 4 years. $3,677.00 doesn’t come close to having my salary keep up with inflation.
Is this a bit?
Comment by ArchPundit Tuesday, Jan 9, 24 @ 1:13 pm
== That’s 49% inflation over 4 years. $3,677.00 doesn’t come close to having my salary keep up with inflation.==
The $3,677.00 was over one year, so you’re not comparing apples to apples.
Comment by Arsenal Tuesday, Jan 9, 24 @ 1:25 pm
To a large extend, corporate greed is responsible for higher costs.
Comment by Chicago Voter Tuesday, Jan 9, 24 @ 1:26 pm
=That’s 49% inflation over 4 years.=
That $1.00 price was a temporary price that McD’s does from time to time and not the regular price. In 2017 the regular price was…wait for it…$1.39 at my rural small town McD’s.
So not 49%.
I paid $2.59 for gas yesterday. The Illinois average for 2017 was 2.45 for the full year. 5.5%
Comment by JS Mill Tuesday, Jan 9, 24 @ 1:29 pm
===That $1.00 price was a temporary price===
Hilarious, but predictable.
Comment by Rich Miller Tuesday, Jan 9, 24 @ 1:38 pm
===Today it’s $1.49.===
Yet the Circle K next to my local McDonalds hasn’t raised prices since 2020. Know it isn’t exactly Perfect Competition the way Adam Smith drew it up, but there is a bit of price competition if you look for it.
Comment by Anyone Remember Tuesday, Jan 9, 24 @ 1:39 pm
These are great indicators, but with much work to do, like keeping United HQ in Illinois (losing it would be a disaster).
It’s reported that wages are outpacing prices, so the inflation doomsaying would be debunked as well, lying on the proverbial roadside with exodus. Gas prices are much lower now.
Unions should be “person of the year” for 2023. They raised wages for not only themselves, but also for non union autoworkers. All while growing the economy. Wadn’t trickle down economics that did that (h/t late Rev. Leroy Jenkins).
Comment by Grandson of Man Tuesday, Jan 9, 24 @ 1:39 pm
=Today it’s $1.49=
For a penny more you can get that same Coke at Costco and it comes with a hot dog. It’s the exact same price it was when Pritzker took office. Thanks JB.
Comment by Pundent Tuesday, Jan 9, 24 @ 1:58 pm
Sorry to not jump in on the great Coke debate.
JB (daddy) coming to the Mayor’s rescue again with United.
Comment by Frida's boss Tuesday, Jan 9, 24 @ 2:30 pm
If you’re buying soft drinks at a fast-food joint on a regular basis, economics ain’t your forte.
Comment by Flyin'Elvis'-Utah Chapter Tuesday, Jan 9, 24 @ 2:39 pm
I feel like I’m feeding a troll, but the McD pop *is* still $1, but they’ve moved it to requiring purchase thru their app apparently to drive uptake of their app.
So not an inflationary example.
Comment by jimbo Tuesday, Jan 9, 24 @ 3:20 pm
=but the McD pop *is* still $1, but they’ve moved it to requiring purchase thru their app=
Greatly enjoying the unexpected shopping tips on the blog today! No snark!
Comment by Heat Wave Tuesday, Jan 9, 24 @ 4:19 pm