Monthly Briefing

              MONTHLY BRIEFING JANUARY 2009
http://www.ilga.gov/commission/cgfa2006/home.aspx
SENATE
Jeffrey M. Schoenberg, Co-Chairman
Larry Bomke
Bill Brady
Michael Frerichs
David Syverson
Donne Trotter
HOUSE
Richard P. Myers, Co-Chairman
Patricia Bellock
Frank J. Mautino
Elaine Nekritz
Raymond Poe
EXECUTIVE DIRECTOR
Dan R. Long
DEPUTY DIRECTOR
Trevor J. Clatfelter
INSIDE THIS ISSUE
PAGE 1 – REVENUE: Revenue Check-Up
“The Patient has Taken a Turn for the Worse”
PAGE 4-5: Revenue Tables
PAGE 6 - ECONOMY: Prices Seesaw
PAGE 8: Illinois Economic Indicators
PAGE 8: Update on the Closure of Howe Developmental Center and Tinley Park Mental Health Center
PAGE 9 - PENSIONS: Pension Bills Passed During Lame Duck Session
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703 Stratton Ofc. Bldg.
Springfield, IL 62706
REVENUE: Revenue Check-Up – “The Patient has Taken a Turn for the Worse”
Jim Muschinske, Revenue Manager
s the State closes the chapter on a very difficult period in its history, Governor Quinn and the General Assembly will have little time to catch their collective breaths before addressing the State’s mounting fiscal crisis. In November, 2008, the Commission presented a sobering outlook for the FY 2009 revenue picture, warning that budgetary pressures would continue to build as the recession started to manifest in reduced tax collections and lower rates of growth. At that time, it was estimated that general funds revenues would fall $550 million below the previous year, or $1.342 billion less than budgeted levels.
Unfortunately, given the November forecast included an assumed $435 million for the sale of the 10th riverboat license, even that rather dismal projection has worsened. As noted in last month’s briefing, the 10th license was awarded for $125 million, well short of FY 2009 budget expectations of $575 million. To compound the shortfall, virtually none of that one-time revenue will be received this fiscal year, in fact the Gaming Board now indicates that around $50 million of the bid amount will be received at the end of the review process (likely FY 2010), with the remainder not coming to the State until operation of the 10th license commences (which likely will not occur until FY 2011 at the earliest).
As a result, the FY 2009 revenue picture worsened virtually overnight to nearly $1 billion less than the previous year, and this before any further erosion in the economic sources is factored in. While the Commission is not scheduled to update its official forecast until mid to late March, even previously assumed conservative rates of growth are quickly coming under pressure, portending additional downward corrections which could potentially bring the falloff from last year to $1.6 billion…or even more.
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