Executive Summary Fiscal Year 2003 First Quarter

              Executive Summary
Fiscal Year 2003
First Quarter
Economic Outlook
In fiscal year 2003, the U.S. economy is expected to grow 2.8 percent, according to DRI-WEFA, an
economic forecasting service, after growing only 0.8 percent in fiscal year 2002. DRI-WEFA estimates
growth of 2.6 percent for the first quarter of fiscal year 2003 following growth of a meager 1.1 percent
in the fourth quarter of the prior fiscal year.
The national unemployment rate hit 5.5 percent in fiscal year 2002, the highest level since fiscal year
1996, and averaged 5.7 percent for the first quarter of fiscal year 2003. DRI-WEFA estimates the
U.S. unemployment rate will average 6.1 percent during fiscal year 2003.
The Illinois economy is also struggling to grow. Gross State Product contracted 0.4 percent in fiscal
year 2002, the lowest state economic growth rate since fiscal year 1991. However, DRI-WEFA
estimates the state economy will expand 2.4 percent in fiscal year 2003. Illinois experienced
unemployment of 5.9 percent in fiscal year 2002, the highest level since fiscal year 1994, and averaged
6.4 percent in the first quarter of fiscal year 2003. DRI-WEFA projects unemployment to average 6.2
percent in fiscal year 2003.
Financial Performance
In fiscal year 2002, general funds revenues totaled $23,379 million, $727 million less than revenues
collected during the prior fiscal year. General funds expenditures totaled $24,249 million in fiscal year
2002, leaving an ending available balance of $256 million. In addition, the balance in the Budget
Stabilization Fund totaled $226 million, for combined balances of $482 million on June 30, 2002.
Fiscal year 2002 lapse period spending totaled $1,476 million.
In July 2002, the Bureau of the Budget estimated fiscal year 2003 revenues would total $24,385 million
and expenditures would total $24,366 million, leaving a general funds available balance of $275 million
on June 30, 2003. In addition, the balance in the Budget Stabilization Fund was expected to remain at
$226 million, which together with the balance in the general funds would provide $501 million in
combined balances.
The general funds ended the first quarter of fiscal year 2003 with a balance of $274 million, down $26
million from July estimates. Revenues for the first quarter were $81 million below estimates while fiscal
year 2002 lapse period spending was $76 million higher than estimated.
Revenues for fiscal year 2003 have been revised downward by $200 million from those estimated in
July. Although they may be received this fiscal year, several other sources of potential revenues have
not been included in the general funds estimates. These potential revenues include collections from the
sale of the unused 10th riverboat license, proceeds from “tobacco securitization general obligation
bonds,” and additional federal aid that may result from the U.S. Congress’ review of proposals to
provide states fiscal relief.