ILLINOIS FISCAL CLIMATEA REVIEW OF GOVERNMENT POLICY AND ITS DOWNSTREAM IMPACTS ON ILLINOIS

Chasse RehwinkelChief Economist for Illinois State Comptroller Susana A.

Mendoza2018 C.A.R Market Outlook

NATIONAL ECONOMY – UPWARD TRENDS

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NATIONAL ECONOMY – PRESSURE POINTS

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STATE ECONOMY – UPWARD TRENDS

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Illinois Housing Permits

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STATE ECONOMY – PRESSURE POINTS

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Fiscal Year

Change in Illinois Personal Income

Adjusted for Inflation

FEDERAL GOVERNMENT DOWNSTREAM IMPACT

Adjusted Gross Income

Total Number of Deductions

Total $ DeductedAverage Salt Deduction

% Claiming DeductionDeduction as

of AGI

Under 25K 3,061,430 $ 10,715,857,000 $ 3,500 5% 2%

25K to 50K 6,563,670 $ 26,377,106,000 $ 4,019 19% 2%

50K to 75K 7,603,690 $ 41,818,805,000 $ 5,500 38% 3%

75K to 100K 6,903,290 $ 50,018,752,000 $ 7,246 53% 4%

100K to 200K 13,915,460 $ 154,484,401,000 $ 11,102 76% 6%

200K to 500K 5,065,480 $ 115,726,717,000 $ 22,846 93% 7%

500K to 1M 805,020 $ 43,921,403,000 $ 54,559 93% 8%

1M+ 400,420 $ 109,645,122,000 $ 273,825 91% 8%

Total 44,318,460 $ 552,708,163,000 $ 12,471 29.60% 5.40%

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* 2015 IRS Data

FEDERAL GOVERNMENT DOWNSTREAM IMPACT (CONT.)

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FEDERAL GOVERNMENT DOWNSTREAM IMPACT (CONT.)

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STATE DOWNSTREAM IMPACTS

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STATE DOWNSTREAM IMPACTS (CONT.)

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General Funds Expenditures (From Current Year Appropriations)

By Major Agency

(Millions of Dollars)

Change from

Fiscal Year FY 2016 to FY 2017

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Amount Percent

Agency

State Board of Education $ 6,995 $ 7,357 $ 7,273 $ 6,912 $ 6,739 $ 6,539 $ 6,681 $ 6,545 $ 6,507 $ 7,211 $ 704 10.8 %

Healthcare and Family Services 8,089 9,556 7,239 7,309 8,158 6,726 7,292 6,525 6,090 5,972 (118) (1.9)

Teachers' Retirement 1,110 1,527 914 256 2,494 2,790 3,529 3,479 3,851 4,096 245 6.4

Higher Education 2,195 2,398 2,230 2,146 2,844 3,234 3,303 3,291 2,039 3,359 1,320 64.7

Human Services 4,086 4,144 3,997 3,894 3,415 3,448 3,217 3,363 3,153 3,283 130 4.1

State Employees' Retirement 0 0 0 39 904 1,049 1,097 1,149 1,367 1,309 (58) (4.2)

Corrections 1,208 1,308 1,156 1,205 1,210 1,172 1,276 1,310 888 1,076 188 21.2

Children and Family Services 887 906 847 840 806 721 684 672 619 684 65 10.5

Aging 458 537 653 646 731 1,060 935 880 646 590 (56) (8.7)

Judicial Agencies 351 376 310 323 375 398 458 497 502 502 0 0.0

Secretary of State 143 144 257 259 258 250 258 292 196 231 35 17.9

State Police 210 215 265 272 271 245 286 254 223 219 (4) (1.8)

Central Management Services 82 74 88 96 75 1,481 1,513 1,608 28 182 154 550.0

Revenue 156 155 128 134 123 108 109 96 76 80 4 5.3

Other Agencies 1,201 1,091 961 1,138 894 1,093 901 813 577 630 53 9.2

Prior Year Adjustments (14) (14) (17) (22) (88) (21) (60) (11) (12) (3) 9 N/A

Total, General Funds Warrants Issued $ 27,157 $ 29,774 $ 26,301 $ 25,447 $ 29,209 $ 30,293 $ 31,479 $ 30,763 $ 26,750 $ 29,421 $ 2,671 10.0 %

Regular Transfers Out 3,201 3,185 3,304 5,070 4,259 4,942 5,222 4,583 4,451 4,621 170 3.8

Base General Funds Expenditures $ 30,358 $ 32,959 $ 29,605 $ 30,517 $ 33,468 $ 35,235 $ 36,701 $ 35,346 $ 31,201 $ 34,042 $ 2,841 9.1 %

Short-Term Borrowing Repayment 1,503 1,424 2,276 1,322 0 0 0 0 0 0 0 N/A

Transfer to Budget Stabilization Fund 276 276 0 276 550 275 275 275 125 0 (125) (100.0)

Repayment of Interfund Borrowing 0 0 0 9 355 133 0 0 0 15 15 N/A

Cash Flow Transfer 2,400 300 870 260 0 0 0 0 0 0 0 N/A

Total, General Funds Expenditures $ 34,537 $ 34,959 $ 32,751 $ 32,384 $ 34,373 $ 35,643 $ 36,976 $ 35,621 $ 31,326 $ 34,057 $ 2,731 8.7 %

STATE DOWNSTREAM IMPACTS (CONT.)

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General Funds Revenue

(Millions of Dollars)

Change From

FY2016 to FY2017

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Amount Percent

Personal Income Tax $ 10,320 $ 9,223 $ 8,511 $ 11,225 $ 15,512 $ 16,538 $ 16,642 $ 15,433 $ 12,890 $ 12,737 $ (153) (1.2) %

Corporate Income Tax 1,860 1,710 1,360 1,851 2,461 3,177 3,164 2,686 1,972 1,328 (644) (32.7)

Sales Taxes 7,215 6,773 6,308 6,833 7,226 7,355 7,676 8,030 8,063 8,043 (20) (0.2)

Transfers In:

Lottery Fund 657 625 625 632 640 656 668 678 677 720 43 6.4

Riverboat Gaming* 564 430 383 324 340 345 321 292 277 270 (7) (2.5)

Other Transfers In 679 538 1,671 2,204 885 952 1,163 2,011 627 552 (75) (12.0)

Total, Transfers In 1,900 1,593 2,679 3,160 1,865 1,953 2,152 2,981 1,581 1,542 (39) (2.5)

Public Utility Taxes 1,157 1,168 1,089 1,147 995 1,033 1,013 1,006 926 884 (42) (4.5)

Other Tax Sources 2,392 2,110 2,066 1,864 2,056 2,118 2,218 2,421 2,276 2,388 112 4.9

Base State Sources $ 24,844 $ 22,577 $ 22,013 $ 26,080 $ 30,115 $ 32,174 $ 32,865 $ 32,557 $ 27,708 $ 26,922 $ (786) (2.8) %

Federal Sources 4,815 6,567 5,920 5,386 3,682 4,154 3,903 3,331 2,665 2,483 (182) (6.8)

Total Base Revenue $ 29,659 $ 29,144 $ 27,933 $ 31,466 $ 33,797 $ 36,328 $ 36,768 $ 35,888 $ 30,373 $ 29,405 $ (968) (3.2) %

Transfer from Budget

Stabilization Fund 276 276 276 276 275 275 275 275 125 0 (125) (100.0)

Interfund Borrowing 0 0 0 496 0 0 0 454 0 0 0 N/A

Cash Flow Transfer 1,503 300 870 259 0 0 0 0 0 0 0 N/A

Short-Term Borrowing 2,400 2,400 1,250 1,300 0 0 0 0 0 0 0 N/A

Total Revenue $ 33,838 $ 32,120 $ 30,329 $ 33,797 $ 34,072 $ 36,603 $ 37,043 $ 36,617 $ 30,498 $ 29,405 $ (1,093) (3.6) %

* Excludes riverboat gaming receipts.

Fiscal Year

STATE DOWNSTREAM IMPACTS (CONT.)

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OUTLOOK

NATIONAL TRENDS CONTINUE TO RISE

POTENTIALLY OVERHEATED ECONOMY

ILLINOIS STATE GOVERNMENT IN TENUOUS RECOVERY

EARLY REVEALED PREFERENCES SHOW STRONG CONSUMER AWARNESS

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