Commission on Government Forecasting and Accountability
HOUSE
C.D. Davidsmeyer, Co-Chair
SENATE
Heather Steans, Co-Chair
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December Monthly Briefing
DECEMBER 2020 SHORT-TERM BORROWING
Lynnae Kapp, Senior Revenue/Bond Analyst

Illinois borrowed $2 billion from the Federal Reserve’s Municipal Liquidity Facility (MLF) on December 17, 2020. The borrowing received a 3.42% rate and has a 3-year maturity. The proceeds will be used for the payment of Medicaid-related bills which will generate approximately $1 billion dollars in federal matching funds. Illinois previously borrowed $1.2 billion of General Obligation Certificates in June 2020 for a failure of revenues, which also was used for Medicaid-related vouchers awaiting payment at the Comptroller’s Office. This first use of the MLF received a 3.82% interest rate and will be paid off by June 2021.


RECREATIONAL CANNABIS – THROUGH 2ND QUARTER FY 2021
Benjamin L. Varner, Senior Analyst and Economic Specialist

In September’s monthly briefing, the Commission examined revenue flowing into the State from recreational cannabis through the State Cannabis Excise Taxes and the associated license and registration fees. This report updates these amounts through the 2nd quarter of the fiscal year. As shown, just under $75 million has been received by the Cannabis Regulation Fund over the first six months. Of this amount, State Cannabis Excise Taxes were $71.9 million, while License and Registration Fees equaled $2.9 million. In addition to these amounts, the Cannabis Business Development Fund received an additional $4.5 million from License and Registration Fees.

REVENUE: $2B BORROWING RESULTS IN SOARING FEDERAL SOURCE RECEIPTS – DECEMBER BASE REVENUES SHRUG OFF ECONOMIC UNCERTAINTY TO POST DECENT GAINS
Jim Muschinske, Revenue Manager

Excluding $2 billion in short-term borrowing executed mid-December, base general funds revenues grew $1.428 billion. Of that amount, $1.264 billion reflected growth in federal sources brought about by a surge in reimbursable spending made possible from proceeds of the short-term borrowing as well as reimbursement from federal Coronavirus Relief Fund moneys for prior state spending from the general funds. Federal source gains aside, the economic related sources such as income and sales taxes continued to demonstrate resiliency by posting decent gains.
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Excluding borrowing related activity, through the first half of the fiscal year base receipts are up $2.368 billion. In addition to the recent surge in federal sources, that growth reflects the timing of income tax receipts related to the filing deadline extension. Through December, combined net income tax receipts are up $1.680 billion. While net sales taxes are up a modest $99 million, that gain serves to demonstrate the consumer’s continued resiliency in the face of COVID-19 driven economic disruptions.