Pritzker Provides Updated Revenue
Projections Amid COVID-19 Crisis
Calls On Federal Government To Provide
Direct Aid To States, Pledges to work with General Assembly to Pass
Full Fiscal Year 2021 Budget
APRIL 2020 REVENUE FORECAST REVISION - PDF
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[August 12, 2020]
Building on measures to address the
unprecedented economic challenges facing Illinois as a result of the
COVID-19 pandemic, Governor JB Pritzker provided an update on the
state’s revenue forecast outlook and efforts to provide fiscal
stability during these unprecedented times.
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COVID-19 has had a profound impact on the U.S.
economy, leading to an unexpected loss of revenues across all 50
states, with early projections showing combined state budget
deficits of $500 billion over the next two years. In Illinois,
general revenue funds are being revised down $2.7 billion in fiscal
year 2020 and $4.6 billion in fiscal year 2021. With short term
borrowing to bridge through this crisis, the total shortfall for
fiscal year 2021 is $6.2 billion when compared to the spending plan
put forth by the Governor in February. That shortfall expands to
$7.4 billion if the constitutional amendment to move to a graduated
income tax does not pass.
While states are slated to receive federal funding to address costs
associated with the pandemic, this funding can not be used for the
broader impact on COVID-19 on state revenue. Gov. Pritzker is
working with our federal partners and calling on Congress to pass an
additional aid package that will provide funding to states to make
up for unprecedented nationwide revenue shortfalls.
“This is a public health crisis – but it is accompanied by massive
economic disruption that’s unprecedented in modern history.
Illinoisans are all too familiar with the pain the lack of a state
budget can cause, so let me just say up front: we will not go
without a state budget,” said Governor JB Pritzker. “We will need to
make extraordinarily difficult decisions on top of the difficult
decisions we’ve already made, but together with the state
legislature we will make them and we will do so with an unswerving
dedication to fairness. In the midst of a pandemic, I am more
resolute than ever to protect those who are suffering physical and
financial hardship from it.”
As the governor works to protect the health and safety of all
Illinoisans he is taking several steps to shore up the state’s
immediate fiscal health:
Earlier this month, the Governor’s Office of Management and Budget
directed agencies to take all possible steps to manage existing
resources for the remainder of fiscal year 2020 by putting on hold
all non-essential purchases and operational expenditures, freezing
all travel that is not mission essential, and limiting all
non-essential hiring. These actions are expected to save at least
$25 million for the general funds in fiscal year 2020. This is in
addition to earlier efforts to identify efficiencies for the fiscal
year 2021 budget, slated to save the state $750 million over the
next three years.
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Working with our partners, the Comptroller and Treasurer have
extended $400 million in investment borrowing agreements that were
due to be repaid from the General Revenue Fund in March and April to
July 2020. In coordination with the Governor’s Office of Management
and Budget, the Comptroller has utilized interfund borrowing
authority to transfer an additional $323 million in March and April
to the general funds.
Additionally, the Governor, Comptroller and Treasurer will be moving
forward with the issuance of up to $1.2 billion in short-term
borrowing in May under Article 9, Section 9(d) of the Constitution
and Section 1.1 of the Short-Term Borrowing Act (30 ILCS 340) for
situations where revenue forecasts do not meet projections. About $1
billion of the decline in revenue for fiscal year 2020 is
attributable to the extension of the April 15 deadline for filing
2019 income tax returns to July 15. This action will cover funds
lost due to that extension.
As the costs of fighting COVID-19 continue to grow, the Governor has
directed nearly $500 million in additional spending authority to
IEMA through the emergency powers granted under the gubernatorial
disaster proclamation. Much of this spending is concentrated on
obtaining personal protective equipment for our frontline workers
and ventilators to treat patients suffering from the most severe
cases of COVID-19. An estimated $170 million has been expended to
date. Federal funding is expected to cover most of the costs the
state is incurring in response to the COVID-19 pandemic.
The federal Coronavirus Aid, Relief and Economic Security (CARES)
Act is a $2 trillion disaster aid stimulus package that is estimated
to provide more than $9 billion to Illinois governments for a
variety of programs from education, to aid for seniors and child
nutrition to transit systems. It provides $150 billion in direct aid
for COVID-19 related expenditures to the states, of which Illinois
is expected to receive $4.9 billion – at least $2.7 billion to the
state of Illinois directly and up to $2.2 billion to larger local
governments.
[Office of the Governor JB Pritzker] |