July 2023 State Revenues Dropped from Year Earlier

The decline affected the State’s fiscal standing as it completed the first month of fiscal year 2024 (FY24). The news was reported to the General Assembly by the Commission on Government Forecasting and Accountability (CGFA), the nonpartisan spreadsheet watchdog office of the Illinois House and Senate. While Illinois took in $3,594 million in general funds revenues in July 2022, in July 2023 this intake dropped to $3,406 million, a decline of $188 million.

This July 2023 decline reflected something that many Illinois lawmakers had predicted: the end of the federal ARPA emergency aid program. Funded by the U.S. Congress from federal borrowed funds, during the coronavirus period ARPA made large transfers of newly-printed money to the American public sector, including Illinois. The Prairie State took in $584 million in ARPA “reimbursements” in July 2022, but this number dropped to zero twelve months later.  This decline accounted for all of the overall July 2023 revenue loss.

Other facets of the State’s July 2023 revenue picture displayed positive numbers, but could not fully make up for the end of the ARPA program. Personal income tax revenues, corporate income tax revenues, and interest on State funds and investments all showed significant July gains year-over-year. Sales tax revenues were flat in July 2023, including a possible cooling in Illinois consumer spending activity. This facet of the Illinois economy should be watched closely as figures come out for August 2023 and September 2023, completing the first fiscal quarter of the 2024 State fiscal year.