Peoria Standard

The Commission on Government Forecasting and Accountability (CGFA) recently unveiled its three-year state budget forecast encompassing fiscal years 2025, 2026, and 2027 for Illinois. The forecast, developed with the help of private partners specializing in economic trend analysis, provides insights into the state's financial outlook for the upcoming years.

According to the CGFA report, Illinois is projected to witness a significant increase in personal income tax revenues over the next three years. The forecast indicates a growth of more than $4.2 billion in personal income tax revenues, from $27.9 billion in FY23 to a projected $32.1 billion in FY27. This growth is attributed to factors such as pay raises for Illinois workers and the shift of business income from corporate to personal income.

CGFA presented three budget projection scenarios for the FY25-FY27 period, with Scenario #3 emerging as the most plausible option. This scenario, based on a 20-year average state spending growth rate of 4%, foresees a general funds deficit reaching $6.581 billion by FY27. The other scenarios also depict significant deficit spending trends, raising concerns about the state's financial stability in the coming years.

In conclusion, CGFA issued a warning regarding the economic and tax revenue forecasts beyond FY2025, emphasizing the need for continued fiscal discipline to navigate the anticipated economic slowdown. The commission stressed the importance of maintaining prudent financial practices to ensure sustainable fiscal outcomes for Illinois.