State revenue watchdogs present report on past twelve months, estimates on future Illinois economic picture. The estimates were presented to the House Revenue Committee on Thursday, March 11. The Illinois Department of Revenue (IDOR), which directly collects State general-funds revenue, shares its numbers with the Governor’s Office of Management and Budget (GOMB), the administrative budget-monitoring office, and the Commission Government Forecasting and Accountability (CGFA), which performs a parallel task for the Illinois General Assembly. Their concurrent monitoring maximizes the ability of the State to forecast future revenue trends. CGFA and GOMB’s revenue estimates for FY22 were close by economic forecasting standards, with a difference of $185 million (less than 1% of total State revenues) between the two numbers.
Based on ongoing State revenue numbers in the first three months of calendar year 2021, Illinois is looking at a sharp but unusual economic bounce that is expected to continue into FY22, the fiscal year that will begin in July 1, 2022. The COVID-19 pandemic caused a devastating economic contraction throughout the United States. In the usual pattern of American recessions, lenders cut back loan and credit activity, and people are slowly thrown by these cutbacks into a steadily widening spiral of unemployment. In March 2020, by contrast, lending changes were sidelined as a spark factor in the downturn. Instead, in this non-standard recession, a deadly virus spread and created a sudden U.S. health care crisis. In response to this pandemic spread, authorities posted statewide stay-at-home orders in Illinois and neighboring states, and many Illinois businesses were forced to alter their operations or even shut their doors. Hundreds of thousands of Illinois workers were laid off. Economic activity, including Illinois income tax and sales tax receipts, plunged downward. Additional non-standard unemployment insurance programs and payments then kicked in quickly during the late spring and summer of 2020, and although unemployment was widespread, the Illinois economy did not spiral downwards in the usual recession manner. U.S. economic activity, instead, spiked upward in the third calendar quarter of 2021, with the recovery continuing in the fourth and final quarter of the year. Although the pandemic recession had been devastating, this up-spike was much faster than the usual pattern of U.S. economic recoveries.
The State of Illinois continued to enjoy relatively healthy tax payments into its coffers in the first calendar quarter of 2021, signaling an ability to at least meet immediate cash flow needs. Income tax and sales tax payments remained healthy by “normal” cash flow standards. Illinois benefitted, in particular, from its newly enhanced ability to levy sales taxes on online retail sales. However, the State continues to pile up a backlog of billions of dollars in unpaid bills, including $4.2 billion in borrowed funds from the U.S. Federal Reserve, and more than $5.4 billion in unpaid bills, including many bills submitted by health care providers.
At the same time, many Illinois workers are concentrated in hard-hit sectors of the economy, and their livelihoods, spending patterns, and tax payments may have been permanently affected. Almost one-half (46.6%) of the job losses posted by Illinois economic sectors in 2020 were suffered by workers in the leisure and hospitality industries, which include hotels, motels, restaurants, and other places of travel and social activity. Almost one-third (31.7%) of the jobs in Illinois leisure and hospitality that had existed at the beginning of the year were gone. Even if Illinois economic activity has stabilized as a whole, this stabilization has not helped members of the specific sectors and professions that were especially hard-hit by this ugly, unusual pandemic event. At 2020 yearend, Illinois’ unemployment rate remained at a recessionary level of 8.0%.
COVID-19
State Partners with Nine Critical Access Hospitals to Expand Equitable Distribution of Vaccine in Rural Communities. Building on efforts to ensure the equitable distribution of the COVID-19 vaccine across Illinois, Governor JB Pritzker and the Illinois Department of Public Health (IDPH) announced Thursday that nine critical access hospitals were selected as part of the Safety Net Direct Vaccine Allocation Pilot program.
This is the next phase of the vaccine pilot program the administration announced on March 3, 2021, in which five federally qualified health centers and four safety net hospitals started receiving vaccine doses directly from the federal government. This next phase specifically targets rural communities, providing hundreds of doses to each site per week.
“I’m proud that we’re expanding this important program with a special focus on rural communities,” said Governor JB Pritzker. “Adding nine critical access hospitals across Illinois, to begin receiving additional vaccine allocations, is a continuation of our mission to meet communities where they already are. Rural communities deserve the same protections from this virus that suburban and urban communities get.”
Starting this week, the state will provide a combined total of nearly 6,000 vaccine doses per week to nine critical access hospitals. This is in addition to the allocated doses the state distributes to existing health care partners, such as local health departments and pharmacies.
This next phase aims to reduce disparities in access to the vaccine by helping those who may face additional barriers such as underlying conditions or reliable transportation. IDPH used rural and geographic considerations to select the sites in this phase of the pilot program.
“Our critical access hospitals have been key partners throughout this pandemic – helping care for our communities and now helping get vaccines to our citizens,” said Rep. Avery Bourne. “Broader vaccine availability and distribution in our rural areas is good news as we work to fully reopen our state.”
“Critical access hospitals are an important partner toward expanding COVID vaccine distribution in West Central Illinois,” said Rep. Dan Swanson. “Genesis Medical Center in Aledo serves the needs of our community well and are an integral piece of the puzzle distributing more vaccines in our region. I am grateful for their involvement.”
“I am happy to report that Hamilton Memorial Hospital will be expanding distribution of COVID-19 vaccines to Southern Illinoisans,” said Rep. Dave Severin. “We are fortunate to have a critical access hospital in Southern Illinois to partner with to get more vaccines in the arms of Illinoisans.”
The program is part of the administration’s ongoing efforts to reduce vaccine hesitancy, by providing residents with the opportunity to receive vaccines from local, trusted providers. Vaccines will be available to residents by appointment only. In accordance with the first phase of the pilot program, the critical access hospitals will first prioritize their patient base before expanding their vaccine capacity to the broader community.
Sites participating in the program include:
• Taylorville Memorial Hospital, Christian County
• Gibson Area Hospital and Health Services, Ford County
• Hamilton Memorial Hospital District, Hamilton County
• Abraham Lincoln Memorial Hospital, Logan County
• Genesis Medical Center Aledo, Mercer County
• Hillsboro Area Hospital, Montgomery County
• Hopedale Medical Complex, Tazewell County
• Carle Hoopeston Regional Health Center, Vermilion County
• Fairfield Memorial Hospital, Wayne County
Illinois continues to grow the network of state-supported vaccination sites operating across Southern, Central and Northern Illinois. To date, Illinois has more than 880 vaccination locations statewide. To find additional information about vaccine availability, including the locations and eligibility, visit coronavirus.illinois.gov.
JOBS
Biometric Information Privacy Act (BIPA) reform clears committee. Current Illinois data privacy laws are running the risk of harming Illinois’ economic growth and activity. The goal of all stakeholders is to create a system where privacy, and job creation, are both protected. However, Illinois has special challenges: our Illinois case law is especially friendly to the filing of big-dollar tort lawsuits. As a result, thousands of civil have been filed with the assistance of aggressive Illinois trial attorneys, seeking damages under Illinois law for alleged breaches of privacy. In some cases, these lawsuits ask for large sums of money on the basis of narrow, technical violations: key words and phrases should have been included in one of the standard electronic signoff forms that millions of Americans sign every day.
House Republican Leader Jim Durkin is the lead sponsor of HB 559, a cleanup bill to shield Illinois businesses that commit narrow, technical violations of BIPA. With bipartisan support, this measure cleared the House Judiciary-Civil Law Committee on Tuesday, March 9. The Committee’s 10-5-0 vote sent this measure to the House floor for further discussion and debate, enabling possible Illinois action to balance the interests of global electronic data sorting – one of the world’s fastest-growing industries.
TAXES
Wallethub again finds Illinois has among the highest property taxes in the nation. The 50-state survey compared the property tax bills paid for average homeowners in each state. The U.S. median home is worth $217,500, and Illinois homeowners who live in a home of that value must pay an average of $4,942/year in property taxes. This burden is double the national average, and far above the property tax burden faced by residents of neighboring states who live in housing of comparable value. The same housing is taxed $1,853 in Indiana, enabling an annual saving for a hypothetical homeowner who moves to Indiana of $3,089 per year. Property taxes are also much lower in Iowa, Kentucky, Missouri, and Wisconsin. Only New Jersey, which the burden on a comparable house is $5,419, has a higher property tax bill median than Illinois.
TRANSPORTATION
State of Illinois announces $250 million in Grants for Local Transportation Projects through Rebuild Illinois. Governor JB Pritzker and the Illinois Department of Transportation announced this week that a third $250 million installment is being made to counties, municipalities and townships to address their transportation needs as part of the historic, bipartisan Rebuild Illinois capital program. The funding ensures the continued investment in local infrastructure to improve safety, enhance quality of life and help sustain the economy across the state by rebuilding Illinois communities and putting people to work.
“While I’m proud of the transformation of our interstate highways Rebuild Illinois is rebuilding, it’s local projects that are rejuvenating our communities in ways our people deserve – that’s why Rebuild Illinois set aside $1.5 billion for municipal and county projects. What’s more, funding from Rebuild Illinois allows local governments to reallocate precious dollars for other parts of the community. And with the strain on local budgets because of the pandemic, that means critical savings for local governments and taxpayers,” said Governor JB Pritzker. “That’s why today, I’m proud to announce the third $250 million installment of funding for counties, municipalities and townships to address their transportation needs as part of the Rebuild Illinois capital program. With these new funds, we can help build up our local infrastructure in every corner of Illinois – spurring more local jobs and economic development across the state.”
A total of $1.5 billion spread out in six installments is being invested over three years to advance municipal, township and county projects across the state. Projects, which will be selected and managed locally with financial oversight by IDOT, include road and bridge improvements, traffic signal upgrades, new storm sewers and bike paths, sidewalk replacements and other long-term maintenance needs. A complete list of local agencies and awards can be viewed here.
The funding is in addition to the regular contributions through the state’s motor fuel tax formula, which already account for $567 million to local governments in this fiscal year alone.
Passed in 2019, Rebuild Illinois is investing $33.2 billion into the state’s aging transportation system, creating jobs and promoting economic growth. The landmark capital program is not only the largest capital program in state history, but also the first one that touches all modes of transportation: roads and bridges, transit, waterways, freight and passenger rail, aviation, and bicycle and pedestrian accommodations.
“I was proud to help pass legislation for Illinois to once again invest in our infrastructure. We live in an incredible state with unlimited potential,” said Rep. Jeff Keicher. “We can realize the dreams of generations if we work together on platforms for success like this. We can and will put Illinois on a path to a prosperous tomorrow with our hard work today.”
“Access to a robust transportation network makes it possible for new jobs and projects to come to cities and towns across Illinois. Today’s investment is made possible by a historic capital bill that provided new transportation funding and made Illinois more economically competitive. We’re already seeing many positive results from that legislation here in DeKalb County,” said Rep. Tom Demmer.
As part of its current FY2021-26 Proposed Highway Improvement Program, IDOT is investing a total of $21.3 billion to improve roads and bridges. Of that, $4.7 billion is identified for the local transportation system.
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