Revenue estimates for FY 2020 indicate overall stability, if not significant growth
The House Revenue and Finance Committee recently heard testimony from Gov. J.B. Pritzker's administration regarding revenue estimates for Fiscal Year 2020. State Department of Revenue (DOR) Acting Chief Economist Marty Johnson said the committee expects wages in Illinois to increase marginally.
"We’re assuming employment growth and wages are trending in positive territory, which lends itself to higher levels of receipts," Johnson said.
Johnson said that while there are cracks in the economy nationwide and The Federal Reserve will likely raise interest rates several more times this year, there are bright spots on the horizon.
"In Illinois, we're anticipating total employment will remain level for the next two calendar years," Johnson said. "Manufacturing and construction are up. Illinois' unemployment rate was 4.3 percent in December and it's expected to stay in this range."
Rep. Steve Reick (R-Woodstock) said he was concerned with the potential yield-curve inversion because it's a good indicator of some sort of recession.
“We all know that when the United States or neighboring states get a cold, Illinois gets pneumonia,” Reick said
Johnson said through Fiscal Year 2020, the (DOR) does not see an impact, but that shortly after that, it is something the department is keeping its eye on.
Reick questioned if the DOR had factored into the estimates any projections regarding mobility, jobs and money in response to the state's increase in minimum wage.
"No, we didn't," Illinois Department of Revenue Director David Harris said.
Rep. Michael Zalewski (D-Riverside), the committee chair, said revenue sounded like it would be flat for the near future.
"I think there are some long-term concerns about a recession, but in the immediate future, things are going to stay stable, which is good," Zalewski said. "But you’d like to see a little more growth too, so we have to work around that."
The hearing was the first in a series of hearings to estimate how much the state will bring in in the next year.
Rep. Keith Wheeler (R-North Aurora) noted an official revenue estimate resolution had not been passed since he had been in office, but they needed to be realistic about real projections with this estimate.