Commission on Government Forecasting and Accountability
HOUSE
C.D. Davidsmeyer, Co-Chair
SENATE
David Koehler, Co-Chair
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May 2021 Monthly Briefing
PERSPECTIVES ON ILLINOIS’ LATEST EMPLOYMENT DATA
Eric Noggle, Senior Revenue Analyst

...despite the improvement in job totals over the past year, Illinois continues to be well short of pre-pandemic employment levels. This is an important fact to note when comparing Illinois’ job totals with those from the year prior. Because it has now been over a year since employment levels took a tumble across the nation due to the repercussions of the COVID-19 virus, the latest job numbers when contrasted with job levels from a year prior will now be compared to figures heavily impacted by the pandemic. As a result, the year-over-year comparisons often used for analyses abruptly appear much more favorable than they have over the past year.


REVENUE: MAY REVENUES JUMP FROM TIMING OF FINAL PERSONAL INCOME TAX PAYMENTS, STRONGER SALES TAX COMPARED TO PEAK COVID PERIOD, AND HIGHER FEDERAL SOURCES
Jim Muschinske, Revenue Manager

Base general funds jumped $2.067 billion in May. A sizable monthly revenue gain was expected to occur for a number of reasons: the timing of final personal income tax payments [due to COVID-19, the final payment deadline was moved to mid-May, whereas last year the delay extended to July]; a year-over-year comparison with last May’s poor pandemic-related sales tax performance; and, a year-over-year comparison with a very weak month for federal sources in 2020. The number of receipting days were the same as last year.

For the month, gross personal income taxes jumped $1.800 billion, or $1.541 billion on a net basis. As mentioned, much of the gain can be attributed to the timing of final payments. While the personal income tax payment deadline was again delayed due to the pandemic, the delay was only a month [May], rather than the three months allowed last year [July]. Sales tax receipts also rose substantially for the month, with gross sales tax receipts up $304 million, or $303 million on a net basis. The comparatively stronger growth was the result of an extremely weak month of sales tax receipts caused by pandemic-related economic shutdowns last spring. Gross corporate income taxes also experienced a strong month, growing $100 million or $78 million on a net basis. Corporate franchise taxes posted a monthly gain of $19 million, while other sources grew $8 million. Interest earnings increased $4 million, liquor taxes $2 million, and vehicle use tax $1 million.
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Excluding borrowing related activity, with only one month remaining in the fiscal year, base receipts are up a stunning $6.988 billion. In addition to a surge in federal sources, that growth also reflects the timing of income tax receipts related to last year’s [2020] filing deadline extension, as well as the continued positive trajectory of underlying economic conditions. Through May, combined net income tax receipts are up $5.024 billion. While approximately $1.3 billion of those gains are to be attributed to the shift of FY 2020 final payments into early FY 2021, despite repeated upward revisions, strong income tax performance continues to meet and outpace expectations. Also viewed positively is the continued upward trend of sales tax receipts as net receipts are up $860 million. Now beginning to compare against those months most impacted by the economic shutdowns of a year ago, sales taxes are reflecting positive consumer reactions to stimulus payments, an improving job picture, and stronger consumer confidence.