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    Illinois Revenue Nov 2014

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    Lennie Jarratt
    The monthly briefing provides an overview of Illinois' economy and state revenues for November 2014. Consumer spending is expected to drive economic growth over the holiday season and in the new year. State revenues declined $54 million in November due to weaker federal sources and fewer receipt days, though some sources like sales tax revenues increased. For the fiscal year to date, revenues are down $452 million largely due to a lower transfer from the Refund Fund, while sales taxes and personal income taxes have increased.

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    Illinois Revenue Nov 2014

    Uploaded by

    Lennie Jarratt
    91 views6 pages
    The monthly briefing provides an overview of Illinois' economy and state revenues for November 2014. Consumer spending is expected to drive economic growth over the holiday season and in the new year. State revenues declined $54 million in November due to weaker federal sources and fewer receipt days, though some sources like sales tax revenues increased. For the fiscal year to date, revenues are down $452 million largely due to a lower transfer from the Refund Fund, while sales taxes and personal income taxes have increased.

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    CGFA November Report

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    The monthly briefing provides an overview of Illinois' economy and state revenues for November 2014. Consumer spending is expected to drive economic growth over the holiday season and in the new year. State revenues declined $54 million in November due to weaker federal sources and fewer receipt days, though some sources like sales tax revenues increased. For the fiscal year to date, revenues are down $452 million largely due to a lower transfer from the Refund Fund, while sales taxes and personal income taxes have increased.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    91 views6 pages

    Illinois Revenue Nov 2014

    Uploaded by

    Lennie Jarratt
    The monthly briefing provides an overview of Illinois' economy and state revenues for November 2014. Consumer spending is expected to drive economic growth over the holiday season and in the new year. State revenues declined $54 million in November due to weaker federal sources and fewer receipt days, though some sources like sales tax revenues increased. For the fiscal year to date, revenues are down $452 million largely due to a lower transfer from the Refund Fund, while sales taxes and personal income taxes have increased.

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    703 Stratton Ofc. Bldg.

    , Springfield, IL 62706
    MONTHLY BRIEFING FOR THE MONTH ENDED: NOVEMBER 2014
    http://cgfa.ilga.gov

    SENATE
    Michael W. Frerichs, Co-Chair
    David Koehler
    Matt Murphy
    Chapin Rose
    Dave Syverson
    Donne Trotter

    HOUSE
    Jil Tracy, Co-Chair
    Kelly Burke
    Elaine Nekritz
    Raymond Poe
    Al Riley
    Mike Tryon
    EXECUTIVE DIRECTOR

    Dan R. Long
    DEPUTY DIRECTOR

    Laurie L. Eby
    INSIDE THIS ISSUE

    PAGE 1 - ECONOMY:
    Spending Holds the Key

    Consumer

    PAGE 3: Illinois Economic Indicators


    PAGE 4 - REVENUE: November
    Receipts Dip On Weak Federal Sources
    And Fewer Receipt Days
    PAGE 5-6: Revenue Tables

    ECONOMY: Consumer Spending Holds the Key


    Edward H. Boss, Jr., Chief Economist

    s the holiday spending season is well underway, the


    outcome for consumer spending will provide the basis
    for the path of the economy in the New Year. Expectations
    remain high as a series of recent reports indicate that
    consumers, which account for two-thirds or more of Gross
    Domestic Product, are invigorated. Unlike last year, when
    forecasts of improved holiday sales were not met, with
    actual results falling short, this year there seems to be
    virtual agreement as to the improved outlook for such
    spending.
    The second estimate of GDP for the third quarter showed
    an annual rate of increase of 3.9%. While this was an
    unexpected upward revision from a preliminary estimate of
    3.5%, it was below the 4.6% rate in the second quarter.
    The spurt in growth in the second quarter largely reflected a
    weather-related rebound from the annual rate of decline of
    2.1% in the first quarter. While on a rocky path, economic
    growth this year was in the 2% range, similar to that seen
    in each of the past two years.
    Economic measures released since the end of the third
    quarter may provide some insight into the course of
    consumer spending as the holiday buying period begins.
    Personal spending rose 0.2% in October following no
    change in September which in turn was revised up from an
    initial decline of 0.2%. Even while an absolute 0.4% shift,
    some analysts had expected a gain of 0.3%. Incomes also
    rose 0.2% last month but also were somewhat less than
    expected. The savings rate remained at 5%, indicating the
    ability for increased expenditures. At the same time,
    measures of consumer optimism by the Conference Board

    CHART 1

    10

    HOLIDAY RETAIL INDUSTRY SALES


    Percent Change

    Percent

    6.8

    6.2

    5.5

    5.1

    3.3
    2.1

    5.6

    2.8

    3.5

    3.1

    '12

    '13

    4.1

    0.3

    -5

    -4.4
    '02

    '03

    '04

    '05

    '06

    '07

    '08

    '09

    SOURCE: National Retail Federation

    '10

    '11

    '14
    CGFA

    Federation. The change represents sales


    in November and December (excluding
    autos, gas and restaurant).

    and the University of Michigan have


    been on a rising trend with the latest
    release from the U of M reaching a 7year high, the highest since July 2007,
    five months prior to the Great
    Recession.

    he NRF forecast for holiday sales in


    2014 is for a rise of 4.1%, up a full
    percent from the 3.1% gain in 2013 and
    the first time since 2011 that sales gains
    exceeded 4% and compares to an
    average 2.9% gain over the past 10
    years.
    It should be pointed out,
    however, that a year ago the forecast
    estimate was originally reported at
    3.9%, only to fall short at 3.1%. And,
    while perhaps not indicative of the entire
    holiday sales season, according to the
    NRF fewer people visited stores during
    the Black Friday weekend and spent less
    this year than last. Wells Fargo Banks
    Economics Group that uses the same
    holiday sales definition as the NRF
    forecasts a gain of 3.9% this year.

    Other factors also may be cited for


    providing an improved setting for
    holiday spending. Gasoline prices have
    fallen sharply in recent months and in
    October were 14% lower than a year
    earlier while equity prices reached
    record levels. In addition, an early
    onset
    of
    cold
    weather
    may
    psychologically
    spur
    some
    early
    shopping, particularly for apparel, while
    improvement in the job market may
    have reduced some of the hesitance from
    spending. The attached chart displays
    the performance of holiday sales as
    reported by the National Retail
    -2-

    Excluding transportation, orders fell


    0.9% the largest drop since December
    of last year while excluding defenserelated items orders dropped 0.6%.
    Housing gains also have moderated and
    a slowdown in China and troubles in
    several European countries will reduce
    export sales. This is occurring at a time
    of uncertainty in the Middle East,
    disturbances at home, and only a slow
    improvement in the job picture. As a
    result, forecasts of economic growth for
    the last quarter of 2014 are likely to fall
    from the 3.9% fourth quarter rate to the
    mid 2% area. Moreover, the economy
    is likely to be locked in that 2% range of
    recent years and not progressing to the
    3% range on a sustained basis for some
    time to come.

    Finally, a somewhat similar holiday


    sales forecast is done by Deloitte which
    measures retail sales (excluding motor
    vehicles and gasoline) but for the
    months of November through January
    expects holiday sales to increase 4% to
    4.5% over the same period last year.

    he consumer remains the key to the


    economy as we enter 2015. While
    holiday sales may well surpass that
    shown in recent years, profit margins
    are likely to be under pressure. Business
    spending also seems restrained as
    indicated by durable goods orders.
    While durable goods orders rose an
    unexpected 0.4%, it was due to a 45.3%
    surge in demand for defense aircraft and
    parts.

    INDICATORS OF ILLINOIS ECONOMIC ACTIVITY


    OCT. 2014

    INDICATORS *

    Unemployment Rate (Average)


    Annual Rate of Inflation (Chicago)

    Civilian Labor Force (thousands) (October)


    Employment (thousands) (October)
    New Car & Truck Registration (October)
    Single Family Housing Permits (October)
    Total Exports ($ mil) (September)
    Chicago Purchasing Managers Index (November)

    SEPT. 2014

    OCT. 2013

    6.6%
    -4.4%

    6.6%
    -0.4%

    9.1%
    2.0%

    LATEST
    MONTH

    % CHANGE
    OVER PRIOR
    MONTH

    % CHANGE
    OVER A
    YEAR AGO

    6,531
    6,102
    55,004
    1,158
    5,557
    60.8

    0.5%
    0.5%
    -6.9%
    18.7%
    -0.5%
    -8.1%

    -0.1%
    2.6%
    9.7%
    5.2%
    1-.2%
    -3.5%

    * Due to monthly fluctuations, trend best shown by % change from a year ago

    -3-

    REVENUE
    November Receipts Dip On Weak Federal Sources And Fewer Receipt Days
    Jim Muschinske, Revenue Manager
    Overall base revenues declined $54 million
    in November.
    The various revenue
    sources were mixed for the month.
    However, federal sources continued to
    underperform expectations, as they have
    for most of the fiscal year. In addition,
    two less receipting days contributed to the
    monthly decline. It is not uncommon for
    receipting days to vary by one day. But,
    they can on occasion vary by two or more
    depending how the calendar falls. When
    that occurs, revenues can experience
    temporary monthly swings.

    Year to Date

    For the month, gross personal income


    taxes dipped $31 million, or $34 million
    net of refunds. Inheritance tax returned
    some earlier gains, falling $16 million.
    Gross corporate income taxes declined $5
    million, while corporate franchise taxes
    were off by $3 million. Insurance taxes and
    fees suffered a minor $1 million reduction.

    To date, gross personal income taxes were


    up $169 million, or $121 million net of
    refunds. Sales tax receipts were ahead of
    last years pace by $177 million, while
    other sources were up $66 million. The
    Cook County IGT gained $30 million while
    inheritance tax added $8 million, insurance
    taxes $2 million, interest income $2
    million, liquor taxes $1 million, and
    vehicle use tax $1 million.

    Through the first five months of the fiscal


    year, overall base revenues were down
    $452 million. However, much of that
    decline was expected and due to the much
    lower Refund Fund transfer into GRF. In
    addition, weaker federal sources to begin
    the year contributed significantly to the fall
    off. The economically related sources
    were mixed as both personal income taxes
    and sales performed well while corporate
    income taxes weakened.

    Due to timing, the Cook County transfer


    grew by $30 million, while sales tax
    receipts continued to fare quite well despite
    two less receipting days as revenues grew
    by $23 million. Other sources managed to
    gain $6 million, while public utility taxes
    advanced $3 million.

    ross corporate income taxes were


    down
    $128
    million
    through
    November, or $117 million net of refunds.
    And public utility taxes were off by $13
    million.

    Overall transfers eked out a $2 million


    increase in November. While riverboat
    transfers rose $8 million and lottery
    transfers $1 million, all other transfers
    suffered a drop of $7 million.
    As
    mentioned, it was another poor month for
    federal sources as receipts dropped $59
    million, reflecting reimbursable spending at
    this time primarily taking place in nongeneral funds spending.

    To date, overall transfers were down $348


    million due to the much lower Refund
    transfer which accounts for $334 million of
    that falloff. Riverboat transfers were down
    $12 million, other transfers were off $6
    million, while lottery transfers contributed
    a $4 million increase. Federal sources
    were down $382 million thus far in the
    fiscal year, reflecting lower reimbursable
    spending from the GRF.

    -4-

    GENERAL FUNDS RECEIPTS: NOVEMBER


    FY 2015 vs. FY 2014
    ($ million)
    Nov.
    FY 2015

    Nov.
    FY 2014

    State Taxes
    Personal Income Tax
    Corporate Income Tax (regular)
    Sales Taxes
    Public Utility Taxes (regular)
    Cigarette Tax
    Liquor Gallonage Taxes
    Vehicle Use Tax
    Inheritance Tax (Gross)
    Insurance Taxes and Fees
    Corporate Franchise Tax & Fees
    Interest on State Funds & Investments
    Cook County IGT
    Other Sources
    Subtotal

    $1,087
    43
    647
    69
    29
    15
    2
    13
    2
    13
    1
    56
    30
    $2,007

    $1,118
    48
    624
    66
    29
    15
    2
    29
    3
    16
    1
    26
    24
    $2,001

    ($31)
    ($5)
    $23
    $3
    $0
    $0
    $0
    ($16)
    ($1)
    ($3)
    $0
    $30
    $6
    $6

    -2.8%
    -10.4%
    3.7%
    4.5%
    0.0%
    0.0%
    0.0%
    -55.2%
    -33.3%
    -18.8%
    0.0%
    115.4%
    25.0%
    0.3%

    Transfers
    Lottery
    Riverboat transfers & receipts
    Proceeds from Sale of 10th license
    Refund Fund transfer
    Other
    Total State Sources
    Federal Sources
    Total Federal & State Sources

    37
    41
    0
    0
    40
    $2,125
    $163
    $2,288

    36
    33
    0
    0
    47
    $2,117
    $222
    $2,339

    $1
    $8
    $0
    $0
    ($7)
    $8
    ($59)
    ($51)

    2.8%
    24.2%
    N/A
    N/A
    -14.9%
    0.4%
    -26.6%
    -2.2%

    ($109)
    ($6)

    ($106)
    (6)

    ($3)
    $0

    2.8%
    0.0%

    $2,173
    $0
    $0
    $0
    $2,173

    $2,227
    $0
    $0
    $0
    $2,227

    ($54)
    $0
    $0
    $0
    ($54)

    -2.4%
    N/A
    N/A
    N/A
    -2.4%

    Revenue Sources

    Nongeneral Funds Distribution:


    Refund Fund
    Personal Income Tax
    Corporate Income Tax
    Subtotal General Funds
    Short-Term Borrowing
    FY'13/14 Backlog Payment Fund
    Budget Stabilization Fund Transfer
    Total General Funds

    $
    CHANGE

    CGFA SOURCE: Office of the Comptroller: Some totals may not equal, due to rounding

    -5-

    %
    CHANGE

    1-Dec-14

    GENERAL FUNDS RECEIPTS: YEAR TO DATE


    FY 2015 vs. FY 2014
    ($ million)

    Revenue Sources

    State Taxes
    Personal Income Tax
    Corporate Income Tax (regular)
    Sales Taxes
    Public Utility Taxes (regular)
    Cigarette Tax
    Liquor Gallonage Taxes
    Vehicle Use Tax
    Inheritance Tax (Gross)
    Insurance Taxes and Fees
    Corporate Franchise Tax & Fees
    Interest on State Funds & Investments
    Cook County IGT
    Other Sources
    Subtotal
    Transfers
    Lottery
    Riverboat transfers & receipts
    Proceeds from Sale of 10th license
    Refund Fund transfer
    Other
    Total State Sources
    Federal Sources
    Total Federal & State Sources
    Nongeneral Funds Distribution:
    Refund Fund
    Personal Income Tax
    Corporate Income Tax

    FY 2015

    FY 2014

    CHANGE
    FROM
    FY 2014

    %
    CHANGE

    $6,555
    828
    3,380
    376
    147
    72
    14
    119
    95
    86
    9
    56
    286
    $12,023

    $6,386
    956
    3,203
    389
    147
    71
    13
    111
    93
    86
    7
    26
    220
    $11,708

    $169
    ($128)
    $177
    ($13)
    $0
    $1
    $1
    $8
    $2
    $0
    $2
    $30
    $66
    $315

    2.6%
    -13.4%
    5.5%
    -3.3%
    0.0%
    1.4%
    7.7%
    7.2%
    2.2%
    0.0%
    28.6%
    115.4%
    30.0%
    2.7%

    241
    153
    0
    63
    222
    $12,702
    $826
    $13,528

    237
    165
    0
    397
    228
    $12,735
    $1,208
    $13,943

    $4
    ($12)
    $0
    ($334)
    ($6)
    ($33)
    ($382)
    ($415)

    1.7%
    -7.3%
    N/A
    N/A
    -2.6%
    -0.3%
    -31.6%
    -3.0%

    ($48)
    $11

    7.9%
    -8.6%

    ($452)

    -3.4%

    ($655)
    ($117)

    ($607)
    ($128)

    $12,756

    $13,208

    Short-Term Borrowing

    $0

    $0

    $0

    N/A

    FY'13/14 Backlog Payment Fund Transfer

    $0

    $50

    ($50)

    N/A

    $0
    $0
    $275
    $13,031

    $0
    $0
    $275
    $13,533

    $0
    $0
    $0
    ($502)

    N/A
    N/A
    0.0%
    -3.7%

    Subtotal General Funds

    Tobacco Liquidation Proceeds


    Pension Contribution Fund Transfer
    Budget Stabilization Fund Transfer
    Total General Funds

    SOURCE: Office of the Comptroller, State of Illinois: Some totals may not equal, due to rounding.
    CGFA

    -6-

    1-Dec-14

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