SZALINSKI’S SUMMARY: Revenue was up 4.8% in March, or $233 million from the previous year, due to continuing growth in sales and income taxes, according to the Commission on Government Forecasting and Accountability. The month reflects a continuing trend for fiscal year 2026 as revenue is now up 4.2%, or $1.6 billion, three-quarters of the way through the fiscal year.
WHY IT MATTERS: The good news for the state comes on the cusp of its biggest month for revenue. With taxes due April 15, next month’s report is likely to set the tone for the final weeks of budget talks in May.
COGFA said the March numbers are “encouraging,” and it means their revenue revisions from early March are on track.
THE DETAILS: COGFA noted this March had an extra receipting day compared to March 2025, but revenue would have been up 1.2% if the months were equal. March’s strong performance was driven by income tax growth of $309 million over a year ago. Sales taxes also grew by 2.9%, or $27 million. Corporate taxes continued a downward trend, declining by 3.4% in March. Revenues from the federal government — a historically volatile source in terms of monthly accounting — increased for the second consecutive month after being down for three straight months. They’re down 5.2% on the year.
COGFA estimates revenues will end the year $686 million higher than what lawmakers expected when they approved the budget last May — an increase of about 1.2%. That’s driven by stronger-than-expected personal income tax receipts and other more specific taxes and fees.
DIGGING DEEPER: Sales taxes have been a big winner in FY26 so far. They’re up $363 million, or 4.2% for the year. That’s higher than the 2.7% growth that was assumed when lawmakers passed the budget last year. COGFA said “a combination of elevated price levels and sustained disposable income” are the main reasons for the growth.
Corporate income taxes, however, are down 6.2% for the year. COGFA said corporate tax cuts in the One Big Beautiful Bill Act are keeping receipts down in Illinois despite state lawmakers’ efforts to decouple the state and federal tax code.
WHAT’S NEXT: April revenue numbers will be released in the first few days of May. That will also be the final snapshot of the state’s revenue performance before May 31, when lawmakers are due to pass the FY27 budget. They’ll be watching that and other revenue reports as they lay out their spending plan.
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