Press Release - Monday, November 14, 2022
Governor Pritzker Releases Five-Year Forecast Showing Projected Long-term Budgetary Deficits Nearly Eliminated
SPRINGFIELD -- The Governor's Office of Management and Budget (GOMB) released the annual Illinois Economic and Fiscal Policy Report showing under Governor Pritzker's leadership Illinois is in its best fiscal shape in decades.
"Illinois' bills are being paid on time, we have over $1 billion in our rainy-day fund, our credit ratings are up and we are honoring our commitments to long-term financial liabilities by contributing extra to Illinois' pension systems," said Governor JB Pritzker. "As we celebrate the tremendous progress we've made with our partners in the General Assembly, we remain committed to working tirelessly for Illinois taxpayers and responsibly managing the state's finances. We've closed a seemingly insurmountable structural deficit that I inherited, and together we are securing Illinois' long term fiscal stability and providing economic opportunities to its citizens."
The future years' budget outlook detailed in the report benefits from strong fiscal management over recent years as the Governor worked with partners in the General Assembly, the Comptroller and the Treasurer, to balance state budgets, tackle the state's multi-billion-dollar bill backlog, repay COVID related short-term borrowings early, make $500 million in extra-ordinary payments to the state's pension systems and put more than $1 billion in a savings account for fiscal emergencies or economic downturns. Additionally, by rebuilding the foundation of the state's finances during the Pritzker administration, the Governor and lawmakers were able to provide $1.8 billion in tax relief this year to the hardworking people of Illinois.
Even with troubling national economic indicators, income and sales tax collections so far this fiscal year continue to exceed budget forecasts by significant margins. Coupled with other one-time revenues, the General Funds revenue forecast for fiscal year 2023 is revised upward by $3.69 billion. GOMB is continuing to monitor the revenues closely as inflation and national/international factors beyond the state's control may impact the economy in uncertain ways. GOMB is now projecting a nearly $1.7 billion net surplus in the general funds budget for fiscal year 2023, wiping out a forecasted fiscal year 2023 shortfall of nearly $3 billion as estimated in 2019.
The Governor intends to pursue several actions to continue Illinois' strong path forward, and put the state in the best possible fiscal position to prepare for the economic uncertainty that lies ahead. The Governor's recommended actions include working with the Legislature to:
Make additional deposits of $1.3 billion into the state's rainy-day fund, bringing it to more than $2.3 billion. While Illinois currently has its highest balance ever at $1.045 billion, Illinois is still among the smallest state rainy-day funds.
Set aside funds to pay off revenue bonds issued in 2010 to help the state pay bills that mounted during the Great Recession. About one-third of the $1.5 billion borrowed at the time remains outstanding.
Make an additional contribution toward the Unemployment Insurance Trust fund. The Trust Fund's remaining debt to the federal government is $1.345 billion plus interest. The Governor and the General Assembly have already taken several steps to reduce the amounts owed from last year's level of $4.5 billion.
Illinois' significant improvement to its fiscal outlook has been noticed by the state's credit rating agencies, which have upgraded Illinois' General Obligation Bond credit ratings a total of six times during the past year.
GOMB is required to annually submit an Economic and Fiscal Policy Report to the General Assembly outlining the long-term economic and fiscal policy objectives of the state, along with the economic and fiscal policy
intentions for the upcoming fiscal year and for the subsequent four fiscal years.
The reports are available to the public online and can be found here: https://budget.illinois.gov/policy-reports.html.