Governor’s Office Projects Fiscal Deficits For Illinois

December 14, 2023

Just before Thanksgiving, the Governor’s Office of Management and Budget (GOMB) published a fiscal update for the state.

Governor’s Office Projects Fiscal Deficits For Illinois

Just before Thanksgiving, the Governor’s Office of Management and Budget (GOMB) published a fiscal update for the state. It’s not all bad, but it isn’t pretty. GOMB is projecting a significant bump of $1.406 billion in fiscal year 2024 revenues. So far, so good. But then the bad news starts. Most of this new revenue, according to GOMB, is a one-time phenomenon, including a one-off transfer from the federal government and higher than expected fiscal year 2023 revenues. GOMB indicates that the majority of these funds have already been spent or committed. According to its report, GOMB projects that supplemental spending measures not accounted for in the fiscal year 2024 budget will cost the state close to $1 billion, shaving the projected surplus to just over $420 million for the year. And after that the news gets grim. According to GOMB’s calculations, Illinois is set to enter a period of deficits, with projected deficits beginning in fiscal year 2025 and continuing at least through fiscal year 2029 unless action is taken to align spending with revenues. GOMB projects a general funds deficit of $721 million in fiscal year 2025, of $1,317 billion in fiscal year 2026, of $1,540 billion in fiscal year 2027, of $1,389 billion in fiscal year 2028, and of $876 million in fiscal year 2029—the last year of projections. These projections are based upon the assumption that Illinois will not enter a recession in the short term and that the state cuts off further transfers to its “rainy day fund” (the Budget Stabilization Fund) during this period. If the economy should go into a recession, the projected fiscal deficits could expand dramatically. The state’s Budget Stabilization Fund for economic downturns or recessions currently holds $2.0 billion.

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State:

Illinois

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