The $2.2 trillion economic relief legislation passed by Congress in late March contains significant new funding for States and large local governments. Exactly how the money will be split appears to have caused considerable confusion in Illinois and elsewhere. The Coronavirus Aid, Relief and Economic Security (CARES) Act provides a total of $150 billion in federal aid through the Coronavirus Relief Fund. After setting aside $11 billion for tribal governments, U.S. territories and the District…
Like most states that levy income taxes, Illinois has followed the federal government in extending the deadline for filing and paying income taxes due for 2019 by three months. The extension—from April 15 to July 15—is intended to provide relief to individuals and businesses hit by the economic fallout from the COVID-19 pandemic, but it is also expected to further strain Illinois’ ability to pay its bills. The Illinois Comptroller’s Office has estimated that more than $1 billion in State…
States are currently facing monumental fiscal challenges posed by the economic and revenue impacts of the coronavirus pandemic. However, their ability to use fiscal policies to address these challenges is quite limited due to structural and capacity issues. Only the federal government has the resources and capacity to implement meaningful countercyclical fiscal policies that might mitigate severe economic and fiscal disruption in the states. This blog post first provides a basic discussion of…
As state and local governments continued to increase the intensity of their responses to the Covid-19 pandemic, this article examined the effect social distancing and business closures could have on state and local budgets. Civic Federation President Laurence Msall noted that the State of Illinois and the City of Chicago were in fiscal distress prior to the pandemic, making them particularly ill-positioned to weather the crisis. He said the only way to prop up governments like Illinois and its…
The coronavirus could have a devastating impact on the State of Illinois’ tax revenues, according to the first official State report that attempts to quantify the fiscal fallout from the crisis. The new report, from the Illinois General Assembly’s Commission on Government Forecasting and Accountability (…
Throughout the United States there is a bipartisan consensus that too many people are incarcerated. The concerns focus on the impact on inmates’ families and communities, the loss of productive human potential, racial inequities and high financial cost. Despite recent reductions, Illinois still holds nearly 40,000 adults in its prison system, with significant fiscal impact. Illinois spends an estimated $22,000 in operational expenses to incarcerate one person for a year.[1] This figure rises…
As described in a previous blog post, Governor J.B. Pritzker’s proposed General Funds budget for FY2021 totals $42.0 billion, which is a $2.0 billion, or 5.1%, increase above estimated FY2020 spending of $40.0 billion. The budget for all funds totals $84.5 billion. All funds include funds outside of the general operating funds such as other State funds and other federal funds, but not capital funds. The State’s 2021 fiscal year runs from July 1, 2020 through June 30, 2021. This blog post…
Illinois Governor JB Pritzker’s second budget proposal avoids many of the pitfalls of his initial budget recommendation. The proposed budget for the fiscal year that begins on July 1, 2020 makes the full pension contribution required by State law and does not depend on one-time revenues that will not be available in future years. Instead, the FY2021 budget relies on revenue that will only be available upon approval of a constitutional amendment in November 2020. If voters reject the shift…
In December the Civic Federation explored how Illinois, its local governments and other states tax recreational cannabis. In this post we will look at how those cannabis tax revenues will be spent by the State of Illinois and compare those priorities to other states. The Illinois Department of Revenue projects the State will collect $57 million in FY2020 from cannabis taxes and licensing fees and $140.5 million from taxes alone in FY2021, which starts July 1, 2020. But how will those revenues…
UPDATE: The Cook County Board passed ordinance 20-0658, imposing a 3% cannabis retailers’ occupation tax on recreational cannabis sales within the county. The new tax will go into effect July 1, 2020 and is in addition to state and local sales taxes and other cannabis taxes, as described below. The county projects it will receive $850,000 in revenue from the tax during the last six months of 2020, but the FY2020 Cook County budget does not rely on any revenue from the new tax. Earlier this…
