EXECUTIVE SUMMARY: An update released Friday shows current fiscal year revenue is expected to be about 1.2% higher than what lawmakers budgeted for. For the upcoming year, new projections are now more bullish than what Gov. JB Pritzker proposed, according to the Commission on Government Forecasting and Accountability.
WHAT IT MEANS: Lawmakers may have a bit more leeway in crafting a budget, but it’s likely not enough movement to drastically alter the landscape. Plus, it’s still early in the fiscal year, and things can change, especially come tax season.
For the upcoming fiscal year, COGFA estimates revenue will be $199 million higher than Pritzker’s budget when excluding the governor’s proposed revenue changes for fiscal year 2027. Pritzker has asked lawmakers to approve proposals that would increase revenue by another $728 million.
CURRENT YEAR: In a year dominated by uncertainty over how much federal funding the state will receive, COGFA estimates Illinois will take in $686 million more than it expected when approving 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 outperforming. COGFA expects that growth to outweigh corporate income tax declines of 16% compared to what was budgeted.
COGFA MORE BULLISH: The legislative forecaster expects the state to end the year with revenue $755 million higher than the last estimate released by Pritzker’s budget office.
The growth may be short-lived, however. COGFA projects FY27 revenue will decline $458 million from the current year.
ECONOMIC OUTLOOK: COGFA’s report is based on the February S&P Global’s baseline forecast, which expects economic growth to continue in 2026 and 2027. Unemployment is projected to rise later this year but return to current levels in 2027. Continued growth in artificial intelligence will help the economy, according to the forecast.
WHAT’S NEXT: It’s now in lawmakers’ hands to choose which of Pritzker’s or COGFA’s estimates — or another altogether — to rely upon in crafting a budget. Appropriation committees began meeting last week to hear budget requests from state agencies.
WHAT WE’RE WATCHING: COGFA and Pritzker’s budget office are scheduled to present their offices’ budget proposals to a Senate committee on Wednesday. We’ll report back.
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