Commission on Government Forecasting and Accountability
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C.D. Davidsmeyer, Co-Chair
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David Koehler, Co-Chair
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October 2021 Monthly Briefing
INFLATION COMES TO THE FOREFRONT
Benjamin L. Varner, Senior Analyst and Economic Specialist

Inflation has become one of the biggest issues currently facing the economy. As outlined in last month’s briefing, a surge in the demand for both durable and non-durable goods fueled by improved household finances, combined with disruptions in supply chains and increased labor costs have led to increases in prices throughout the economy. Relatedly, this report examines in which sectors of the economy inflation is being detected and how this differs at the local level.

UPDATE ON SPORTS WAGERING
Eric Noggle, Senior Revenue Analyst

The return of the major sports during the latter half of 2020 allowed for sports wagering to begin generating consistent revenues. In FY 2021, the amount of adjusted gross receipts (AGR) produced from sports wagering in Illinois totaled just over $380 million. The tax rate on sports wagering is a flat 15%. Therefore, the $380 million in adjusted gross receipts resulted in a tax revenue total for FY 2021 of $57 million.

While only two months of data from FY 2022 is available so far on the Gaming Board’s website at the time of this article, these figures show that the FY 2022 numbers are, not surprisingly, significantly higher than they were at this time last year. As sports wagering approaches full implementation, the expectation is that FY 2022 sports wagering tax revenues should see notable gains. This, of course, assumes no further virus related shutdowns in the sports wagering industry.

REVENUE: OCTOBER REVENUE GROWTH REFLECTS FEDERAL SOURCES—CORPORATE INCOME TAX AND SALES TAX RECEIPTS ALSO CONTRIBUTORS TO GAIN
Jim Muschinske, Revenue Manager

Base October general funds revenues grew $663 million. Comparatively higher federal source growth represented the bulk of the gain, as receipts were $441 million higher than a very weak month experienced last year. In addition, corporate income tax receipts along with sales tax receipts also performed impressively, contributing to overall monthly growth. October had one less receipting day compared to last year.
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Through the first third of FY 2022, overall base receipts are up $1.198 billion. While net income taxes are $467 million behind last year’s pace, as explained in earlier briefings, this is due to timing of last year’s final payment delay rather than underpinnings of economic performance. In fact, given the performance of September/October income tax receipts, and factoring in the approximate $1.3 billion of last year’s receipt timing, income tax receipts have performed very strong. Net sales tax has also enjoyed good growth as receipts are up $466 million. All other sources are behind last year’s levels by a combined $77 million.

Overall transfers are ahead of last year’s pace by $227 million through October. Those gains reflect better miscellaneous transfers, particularly from the Capital Projects Fund, as well as the return of riverboat transfers. Federal sources had a strong first third of the fiscal year, with revenues up $1.049 billion.