Analysis of Illinois' FY 2022 Enacted General Fund Budget
July 22, 2021
At the time of the initial FY 2022 General Fund budget proposal that Governor Pritzker made back in February, CTBA described the budget as “sobering,” because it would have constituted a year-to-year cut in real spending on education, healthcare, human services, and public safety, given that 95 cents of every dollar of General Fund spending goes to those four, core service areas.
However, things significantly changed a month later on March 11, 2021, when President Joe Biden secured passage of the American Rescue Plan Act (“ARPA”). ARPA came on the heels of various other federal relief initiatives that passed in 2020—most notably the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). When considered together with ARPA, nearly $12 billion in federal relief funding has been designated to cover state-level spending on core public services in Illinois over fiscal years 2021, 2022, 2023, and 2024.
Meanwhile, in addition to receiving this significant and somewhat unexpected federal financial support, Illinois enacted state legislation that will generate an estimated $655 million in new General Fund revenue annually beginning in FY 2022, through elimination of various tax expenditures that had primarily benefited corporations.
Yet, despite obtaining the aforesaid new federal and state funding, the FY 2022 Enacted General Fund Budget that passed into law (“P.A. 102-0017”) increases overall net spending on core services in FY 2022 by just $586 million over FY 2021 levels, in nominal, non-inflation-adjusted dollars. That is notable for one simple reason: the total year-to-year increase in General Fund spending is less in nominal dollars than the $655 million in new recurring revenue the state raised by eliminating the aforesaid tax expenditures—and is significantly less than the $3.8 billion in federal relief funding the state utilized in FY 2022. Indeed, after adjusting for inflation, total net General Fund spending on services in FY 2022 is scheduled to be only $24 million—or 0.1 percent—more in real terms than it was in FY 2021.