GAAP (Generally Accepted Accounting Principles) Report, FY 2007

              SENATE
Jeffrey M. Schoenberg
Co-Chairman
Don Harmon
Christine Radogno
Steven Rauschenberger
David Syverson
Donne Trotter
EXECUTIVE DIRECTOR
Dan R. Long
State of Illinois
COMMISSION ON GOVERNMENT FORECASTING AND ACCOUNTABILITY
703 Stratton Ofc. Bldg., Springfield, IL 62706
HOUSE
Terry R. Parke
Co-Chairman
Mark H. Beaubien, Jr.
Frank Mautino
Robert Molaro
Richard Myers
Elaine Nekritz
DEPUTY DIRECTOR
Trevor J. Clatfelter
March 15, 2006
MEMORANDUM
TO: The Honorable Rod Blagojevich, Governor, State of Illinois
The Honorable Emil Jones, Jr., President of the Senate
The Honorable Michael Madigan, Speaker of the House of Representatives
The Honorable Tom Cross, Minority Leader of the House of Representatives
The Honorable Frank Watson, Minority Leader of the Senate
FROM: Dan R. Long, Executive Director
RE: FY 2007 GAAP (Generally Accepted Accounting Principles) Report
Introduction
Included in this memorandum are the Commission on Government Forecasting and Accountability’s revenue estimates formulated on a modified accrual basis in accordance with generally accepted accounting principles (GAAP). Public Act 90-0479, a synopsis of which is included in the Appendix, requires modified accrual basis estimates for the general funds, the Agricultural Premium Fund, the Road Fund, and the Motor Fuel Tax Fund.
Recognition of revenue and liability in the fiscal year of collection or payment has been the premise for formulating the Illinois budget and is known as cash basis budgeting. Estimates formulated on a modified accrual basis instead recognize revenue and liability in the fiscal year of accrual and provide an alternative perspective to the budget process.
Modified Accrual Basis Estimates
The Commission on Government Forecasting and Accountability estimates that fiscal year 2007 revenue to the general funds on a modified accrual basis will be $27.0 million higher than on a cash basis. The differential between the two estimates is largely due to increases in the personal income tax, corporate income tax, and sales tax forecasts. The Commission estimates that there will be no difference between modified accrual basis revenue to the