Revenues Take a Downturn

State revenue collections in the current fiscal year may fall between $600 million and $750 million short of projections used to craft the $49 billion operating budget, according to various projections.

An unofficial projection of $600 million came in the latest revenue report from the General Assembly’s bipartisan Commission on Government Forecasting and Accountability, while Gov. Rod Blagojevich has said the shortfall that must be addressed is about $750 million.

Revenues were originally projected to grow by about $1.6 billion during the current fiscal year that runs through June 30. Based on revenue collections to date and the economic forecast for the remainder of the fiscal year, the commission said that revenue growth could fall short of even the $1 billion mark.

Personal income tax collections are on target, but corporate income taxes and sales taxes are faltering. The commentary was included in the commission’s latest report, but is not an official projection. The commission on March 5 will release its official revenue forecast for the current fiscal year and fiscal 2009.

Separately, last week Treasurer Alexi Giannoulias said state investments have fallen because of the struggling financial markets, and Illinois could end up with as much as $50 million less in earnings from its investments this fiscal year.

In further signs of fiscal distress, the state currently faces a backlog of about $1 billion in bills, according to Comptroller Daniel Hynes. Several lawmakers want the state to issue short-term notes, as it has in the past to help pay down the backlog more quickly. Hynes on Monday issued a special report warning that Illinois faces a challenging fiscal period because of its failure to shore up its finances before the economic slump.

The governor will release his budget and deliver his state of the state address next Wednesday.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER