NOWICKI’S SUMMARY: Illinois closed fiscal year 2026 collecting $1 billion more in tax revenue than what lawmakers anticipated when they wrote the budget last May.
It’s a strong close but it’s mitigated by the fact that lawmakers already allocated more $830 million in supplemental fiscal year 2026 spending in this year’s budget. The rest is likely attributable to June containing an extra receipting day compared to last year, according to the final revenue report of the fiscal year that ended June 30 by the Commission on Government Forecasting and Accountability.
AS COGFA TELLS IT: “Overall, FY 2026 proved to be an exceptionally strong year for General Funds revenues, particularly when compared to the enacted budget assumptions,” Revenue Manager Eric Noggle wrote in his report, noting it’s the second straight year of record revenue collections.
“Revenues ultimately exceeded the budget estimate by $1.003 billion, or 1.8%, driven primarily by stronger than anticipated collections from the Personal Income Tax, Estate Tax, and Transfers In,” he added. “These gains more than offset weaker than expected performance from the Corporate Income Tax and Federal Sources.”
ANOTHER STRONG PERFORMER? The estate tax. Receipts rose $268 million year-over-year, from $603 million to $871 million. While estate tax revenues are highly volatile because the state can’t predict who will die and how much money they have, Noggle wrote the revenue boost reflects “the strong investment performance of higher income taxpayers in recent years.”
Pritzker indicated earlier this year he’d consider supporting estate tax reform, but nothing ultimately came to fruition this session.
WHY IT MATTERS: Anytime the state exceeds revenue estimates, that’s a good thing for the budget. The Pritzker administration has made a habit of shooting low with initial estimates, then having some wiggle room when higher-than-expected revenues arrive. But it’s important to note this is not an unforeseen windfall.
DON’T SAY THE ‘S’ WORD: Carol Knowles, the now-retired spokesperson at the Governor’s Office of Management and Budget, always used to caution not to refer to situations like these a “surplus.” June revenue overperformance is more appropriately looked at as a good jump on July, when the new fiscal year kicks in, she’d say.
And that thinking probably still stands here. For one, lawmakers already OK’d spending most of the money amid strong revenue growth in the final months of the legislative session.
DAMPENING FY27? Noggle also noted that the fiscal year was buoyed by a “surge” of more than $300 million in receipts on the final receipting day of the year.
That boost to June, he wrote, “may have shifted a portion of revenues that otherwise would have been received early in July, potentially dampening FY 2027 revenue growth.”
WHAT WE’RE WATCHING: As it stands, the fiscal year 2027 budget — a $55.9 billion spending plan — now officially expects the upcoming year to see less revenue than the now-final $56.3 billion tally for FY26. We’ll see if the Pritzker administration continues to aim low and miss high, or if the impacts of the “One Big Beautiful Bill Act” hit the state’s coffers as hard as Democrats have warned in the nascent fiscal year.
In the meantime, you can sign up for our twice-weekly Capitol News Insider newsletter. You won’t be charged, but will have the option to become a paying subscriber to retain access to coverage like this once we fully launch Capitol News Insider.
