SZALINSKI’S SUMMARY: Fiscal year 2027 revenue is up 7% through the first two months, according to the Commission on Government Forecasting and Accountability. That’s been boosted by strong performances for corporate and personal income taxes and sales tax growth.
WHY IT MATTERS: While it is early in the fiscal year that began on July 1, revenue numbers shed some light on the state’s economy. Positive numbers at the beginning of a fiscal year can also provide a cushion for the state’s budget if the winds change. The budget signed by Gov. JB Pritzker anticipated very little revenue growth in FY27.
OVERALL PERFORMANCE: The 7% overall growth in July and August means revenue is up $515 million through the first two months of FY27 compared to the prior year. And the three main revenue sources for the state are largely responsible for it. Personal income tax is up 5%, corporate income taxes, which have been sluggish over the last year, are up 50.9%, and sales taxes are up 11.6%.
“While this level of growth is unlikely to continue at such an elevated rate, the stronger than expected totals to start the year will provide additional financial cushion if revenues were to weaken later in the fiscal year,” COGFA’s report said.
AUGUST NUMBERS: Revenue in August was up $326 million, or 9.2%, compared to August 2025. That beat July’s $188 million, or 5%, increase. Personal income tax growth was the main driver of that, as it grew by $195 million, or 10.4%, compared to the prior year.
Corporate income tax receipts increased by 8.3%, but that only accounts for $6 million of growth. Sales tax increased by $91 million, or 9%. COGFA said that growth may be at least partially attributable to motor fuel sales amid high gas prices and car sales.
Federal funding was also up by $115 million, or 30.9%, compared to August 2025. But there might not be much to read into that because the timing of federal funding is especially volatile and can vary significantly each month.
SOMETHING TO WATCH: The FY27 budget anticipates a $50 million transfer from the Income Tax Refund Fund to the General Fund. That annual transfer process is largely affected by prior-year tax receipts, as the fund is used to pay out tax returns. Surplus funds get transferred to the General Fund. Last year, nearly $700 million was transferred to GRF, but no transfer was made in August, leading to a $147 million, or 45.8%, decrease year-over-year. COGFA said this will become more pronounced as the year goes on.
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