Analysis of Illinois' FY 2023 Enacted General Fund Budget
July 1, 2022
Due to Illinois’ long-term, structural fiscal challenges, citizens of Illinois have grown accustomed to General Fund budgets that are focused on cutting, or limiting the cuts to, core services. Which is truly unfortunate, given that 95 percent of all General Fund expenditures on services go to the four core areas of Education, Healthcare, Human Services, and Public Safety. However, this past April, the Illinois General assembly passed a General Fund budget for FY 2023 (the “FY 2023 Enacted GF Budget”) that was notably different from the vast majority of budgets passed into law over the last twenty-some odd years. That is because, rather than focus on cuts, the FY 2023 Enacted GF Budget calls for increasing year-to-year spending in every one of those four core service areas. This counters a trend of imposing real, inflation-adjusted cuts to all or most core services that goes all the way back to FY 2000. Moreover, the FY 2023 Enacted GF Budget--when considered in combination with the supplemental appropriations that were passed covering certain aspects of the FY 2022 Enacted General Fund Budget (the “FY 2022 Enacted GF Budget”)—includes a commitment to being fiscally responsible that is far more substantive than rhetorical. This also stands in stark contrast to most General Fund budgets enacted over the last two decades, which on the whole paid lip-service to being responsible—without implementing initiatives that strengthened Illinois’ fiscal system in any meaningful way.
The primary reason for the both the year-to-year spending increases, as well as the newly found focus on being fiscally responsible, came down to one simple factor—unanticipated revenue growth. Initially, General Fund revenue for FY 2022, which ended on June 30th of this year, was pegged at $44.37 billion. Now estimates are that it will hit $49.2 billion, which is not only significantly more than was originally anticipated, but created an “on-budget” surplus for FY 2022 of $4.8 billion.
And while that is certainly good news—it does not tell the whole story about the state’s fiscal condition. That is because an “on-budget” surplus simply means current-year revenue will exceed current-year spending. It does not factor in any “accumulated deficit”—read that as unpaid bills—that are scheduled to carry forward from a prior fiscal year into the next succeeding fiscal year.