Base revenues for the State of Illinois for April sank by 46% from compared to April of last year, a $2.7 billion drop.
It was a “perfect storm” that conspired to cause the drop, according to the Commission on Government Forecasting and Accountability report – “a combination of COVID-19 impacts, delayed tax filing deadlines, and comparative drop-off due to 2019’s April Surprise.’”
After managing to avoid much of the virus’ effects on March revenues, as foreshadowed in last month’s briefing, the impact on April’s receipts was unavoidable. In addition, the “tax day” deadline change to July 15th delayed approximately $1.3 billion in final payments into next fiscal year. And finally, the one-time nature of 2019’s ‘April Surprise’ related to a surge in non-wage income taxes and federal sources, exacerbated this month’s comparative decline.
All major revenue sources sank, particularly the “big three.” Personal income tax receipts dropped 48%, corporate income taxes by 57% and sales taxes by 20%.
To offset some of that loss, the state’s general fund borrowed a total of $218 million from dozens of the segregated special funds held by the Illinois Treasurer. According to COGFA, those amounts “shall be repaid from general funds to the original funds with interest within 48 months of the dates borrowed (was originally 24 months).”
Going forward, “While a tremendous amount of uncertainty remains, with April now behind us, over the coming days the Commission will be recalibrating its revenue outlook for FY 2021 as well as updating its FY 2020 estimate.”