When Illinois lawmakers met in Springfield to pass a budget for the upcoming fiscal year, the main issue they confronted was the tax shortfall caused by COVID-19. They did not want to include revenue from a proposed graduated income tax, which will only be available if voters approve the plan in November 2020. Instead, the $43 billion budget passed on May 24 depends on $5 billion in borrowing…
UPDATE: Since the Civic Federation published this blog post, there have been two significant updates to report, as detailed in this follow-up post. Governments frequently borrow funds on a short-term basis to deal with cash flow problems, and this year, due to the massive economic disruption caused by the COVID-19 pandemic, the State of Illinois and many local governments will face large cash…
UPDATE: On May 5, Illinois delayed the planned sale of $1.2 billion of short-term debt as it faces steep interest penalties from investors due to the coronavirus crisis. The sale was tentatively scheduled for May 6, but now the timing will depend on market conditions. Proceeds of the sale are intended to be used to help close the revenue gap described below in the State’s FY2020 budget. Illinois…
The $2.2 trillion economic relief legislation passed by Congress in late March contains significant new funding for States and large local governments. Exactly how the money will be split appears to have caused considerable confusion in Illinois and elsewhere. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides a total of $150 billion in federal aid through the Coronavirus…
As state and local governments continued to increase the intensity of their responses to the Covid-19 pandemic, this article examined the effect social distancing and business closures could have on state and local budgets. Civic Federation President Laurence Msall noted that the State of Illinois and the City of Chicago were in fiscal distress prior to the pandemic, making them particularly ill-…
The coronavirus could have a devastating impact on the State of Illinois’ tax revenues, according to the first official State report that attempts to quantify the fiscal fallout from the crisis. The new report, from the Illinois General Assembly’s Commission on Government Forecasting and Accountability (…
Throughout the United States there is a bipartisan consensus that too many people are incarcerated. The concerns focus on the impact on inmates’ families and communities, the loss of productive human potential, racial inequities and high financial cost. Despite recent reductions, Illinois still holds nearly 40,000 adults in its prison system, with significant fiscal impact. Illinois spends an…
As described in a previous blog post, Governor J.B. Pritzker’s proposed General Funds budget for FY2021 totals $42.0 billion, which is a $2.0 billion, or 5.1%, increase above estimated FY2020 spending of $40.0 billion. The budget for all funds totals $84.5 billion. All funds include funds outside of the general operating funds such as other State funds and other federal funds, but not capital…
Illinois Governor JB Pritzker’s second budget proposal avoids many of the pitfalls of his initial budget recommendation. The proposed budget for the fiscal year that begins on July 1, 2020 makes the full pension contribution required by State law and does not depend on one-time revenues that will not be available in future years. Instead, the FY2021 budget relies on revenue that will only…
UPDATE: The Cook County Board passed ordinance 20-0658, imposing a 3% cannabis retailers’ occupation tax on recreational cannabis sales within the county. The new tax will go into effect July 1, 2020 and is in addition to state and local sales taxes and other cannabis taxes, as described below. The county projects it will receive $850,000 in revenue from the tax during the last six months of 2020…
