State lawmakers in the Illinois House Revenue and Finance Committee may, or may not come up with an official revenue estimate to include in the budgeting process for the spending plan that begins this summer.
But committee leaders from both sides of the aisle said they want to give appropriations committees a solid revenue estimate for the coming budget.
The revenue estimate number takes into account how much money the state expects to take from taxpayers in the coming year. Article VIII, Section 2(b) of the Illinois Constitution states: “The General Assembly by law shall make appropriations for all expenditures of public funds by the State” and “appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.”
After Thursday’s House Revenue Committee hearing, chairman Mike Zalewski, D-Riverside, said the state’s revenue sources look like they’ll be stable. But will there be an official estimate resolution?
“I’m all for hearing, getting a known number to [appropriations] chairs they can work with,” Zalewski said. “Whether we do an official estimate seems to be form over function.”
The General Assembly has not passed an official revenue estimate in years. Revenue Committee minority spokesman Joe Sosnowski said it seems the majority disregards it.
“And I’m not sure why because we receive the revenue estimate from both [the Commission on Government Forecasting and Accountability] and [the Governor’s Office of Management and Budget] and [the Department of] Revenue’s numbers go into that, so we should release that and I think put that into actual resolution form. So we’ll be pushing for that again this year and hopefully get that done.”
Several years ago former Illinois Attorney General Lisa Madigan gave an opinion that an official revenue estimate from the General Assembly was not needed.
“[T]he General Assembly’s appropriation authority is limited by its estimate of funds available, which serves as ‘a ceiling of revenues within which they must appropriate and beyond which they may not go,” she wrote in a 2014 opinion.
As to how much the state expects to collect from taxpayers in the coming year, COGFA puts the estimate at $40.6 billion for fiscal 2021, that’s down slightly from the current year. The Governor’s Office of Management and Budget puts the estimate at $42.1 billion, which includes tax increases from a progressive income tax proposal that voters haven’t voted on yet.
“I think we would be wise this session to have the approps chairs budget what they have in terms of the fair tax not being enacted,” Zalewski said.
The “fair tax” is what Gov. J.B. Pritzker calls the proposed progressive income tax. That would require a change of the state constitution’s flat income tax to a tiered income tax structure with higher rates for higher earners. Voters will decide to approve or reject the ballot question this November.
“If there’s programs, or provider rates, or things that can wait until the fall, we need to see what the voters say and go from there,” Zalewski said.
Sosnowski said he agreed.
“And what we’ve seen with out-migration of residents, obviously that’s something that we really need to take into account in how it will affect us,” Sosnowski said. “But our push I think is we need to look at balancing the budget with the expected revenues regardless if [the progressive income tax] passes.”
The governor’s proposed budget spends about $42 billion, the largest spending plan in state history, but he said he’ll hold $1.4 billion in reserve pending the outcome of the progressive income tax vote this November. That $1.4 billion includes money meant for schools and local governments among other things.