DATE: Tuesday March 9, 2021
TIME: 10:00 a.m.
RE: FY 2022 Economic Forecast and Revenue Estimate and FY 2021 Revenue Outlook Update
PLACE: Room C-1, Stratton Building, Springfield, IL*
*Attendance is limited to Commission members due to COVID-19 protocols, although arrangements will be provided for public audio and/or video feed.
February 2021 Monthly Briefing
THE IMPACT OF THE PANDEMIC ON 2020 GAMING STATISTICS
Eric Noggle, Senior Analyst
Prior to the pandemic, despite the fact that casino revenues have been declining, when combined with the flourishing video gaming numbers, total gaming revenues had risen to over $3.0 billion in 2019. But the lack of revenues from these two sources in 2020 resulted in a combined 42.2% decline to under $1.8 billion. Similarly, total tax revenues had risen to $983 million in 2019, but in 2020, this combined tax total fell all the way to $524 million, a combined falloff in tax revenues of 46.7%.
ECONOMY: INFLATION CONCERNS ARE GROWING
Julie Bae, Pension Analyst and Economic Specialist
It has been over a year since the COVID-19 recession began in February of 2020. After going through a brutal loss of 31.4% in the second quarter and an immediate, rapid rebound of 33.4% in the third quarter last year, the economy appears headed for a recovery. Overall, the U.S. economy shrank by 3.5% in 2020, compared to 2019. This was the worst growth since one year after World War II. In January, personal income rose 10% and consumer spending jumped by 2.4%, the biggest increase since June of 2020, both of which mostly resulted from the COVID-19 relief payments by Congress. Housing markets are still robust, partly supported by low mortgage rates.
REVENUE: FEBRUARY RECEIPTS GROW ON COMPARITIVELY STRONGER FEDERAL RECEIPTS—ECONOMIC SOURCES EXPERIENCE MODEST GROWTH
Jim Muschinske, Revenue Manager
Base general funds revenues grew a respectable $330 million in February. A comparatively strong month for federal sources elevated receipts $242 million. The growth reflected an extremely poor month one year earlier rather than an impressive month in absolute terms. The economically-tied sources such as income and sales taxes continued to perform well, while a number of smaller revenue sources experienced some weakness.
Excluding borrowing related activity, through the first two-thirds of the fiscal year base receipts are up $2.719 billion. In addition to December’s surge in federal sources, that growth also reflects the timing of income tax receipts related to the filing deadline extension. Through February, combined net income tax receipts are up $1.982 billion. While over half of those gains continue to be attributed to the shift of FY 2020 final payments into early FY 2021, very respectable underlying base income tax receipting must be recognized as well. Also impressive is the continued positive trend of sales tax receipt performance. While overall levels of growth are fairly modest at 2.4%, given that rate reflects a post-pandemic versus pre-pandemic period, sales tax performance continues to impress.