November 2017 Monthly Briefing
ECONOMY: 10-YEAR ANNIVERSARY OF THE GREAT RECESSION PART 1
Benjamin L. Varner, Senior Analyst and Economic Specialist
The 10th anniversary of the start of the Great Recession is quickly coming up. According to the National Bureau of Economic Research, the Great Recession lasted from December of 2007 until June of 2009. The Great Recession lasted 18 months and was the largest decline in the U.S. economy since the Great Depression. To mark this occasion, the Commission examined how Illinois’ economy has fared since then. The Commission used real Gross Domestic Product (GDP) data by State to compare Illinois’ economy to the Midwest and to the U.S. economy as a whole.
REVENUE: BOND SALE PROCEEDS USED TO PAY OLDEST MEDICAL BILLS RESULT IN REIMBURSEMENT SURGE
Jim Muschinske, Revenue Manager
Per statute, proceeds from the recent $6 billion bond sale were deposited into the Income Tax Bond Fund. Upon receipt of the bond proceeds, the Comptroller transferred $2.5 billion from the Income Tax Bond Fund into the General Revenue Fund as part of the financial plan to pay down some of the bill backlog that had grown to over $16 billion. [The remaining proceeds were moved to the Health Insurance Reserve Fund to pay down overdue State group insurance bills]. Utilizing those transferred funds for federally reimbursable spending, i.e. Medicaid resulted in a surge of federal source receipts. For the month, overall general funds receipts, not including the $2.5 billion transfer from bond sale proceeds, grew $2.519 billion. Of that gain, approximately $2.153 billion was due to federal source growth, with the remaining increase mostly reflecting the higher income tax rates.
Excluding $2.5 billion bond sale transfer proceeds, as well as $354 million from interfund borrowing, base general funds grew $4.489 billion during the first five months of the fiscal year. Increased income tax receipts stemming from the recently enacted higher tax rates, fund sweeps, as well as an increase in federal sources resulted in this significant gain.