Illinois Facing Billion Dollar Budget Gap

Another state, another deficit. Illinois is looking at a billion dollar problem.

Crains: According to the state Department of Revenue, Illinois is on track to see a roughly $800-million revenue hole this fiscal year, based on receipts for the first four months of fiscal 2009, which began July 1.

“And if the Illinois economy worsens, as many predict,” the department continued in a press release, “the shortfall between fiscal 2009 receipts and budgeted revenue may exceed $1 billion.”

In the four months ended on Halloween, individual income tax receipts were down a scary 4% relative to projections, rather than rising 1.1% as assumed in the state budget. If that trend continues for the remainder of the year, the state will be short $330 million in that category.

Often-volatile corporate income tax collections were off even more, dropping 14% from budget projections rather than growing 4.1%. The annualized loss would be about $270 million.

And so far, revenue from the sales tax is down 3% rather than growing a projected 1.6%, leaving a potential $215-million shortfall.

On top of that bad news, the department noted that gaming revenue is off $100 million so far in the fiscal year, and returns from short-term state investment are declining.

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