State ends FY26 with $1B in excess; other data shows Illinois ‘lags’
(The Center Square) – A state commission report showed Illinois brought in more revenue than expected to begin the 2027 fiscal year.
A co-chair of the commission says the increase in funds and multiple new credit upgrades are in part a result of lawmakers adding and expanding taxes and fees for residents yearly.
The Commission on Government Forecasting and Accountability’s monthly report on state revenue and financials for June, released this month, showed an 8.2% increase in revenue collected by the state compared to June, 2025.
Commission Co-Chair Rep. C.D. Davidsmeyer, R-Jacksonville, told The Center Square that while revenue for the state through income and sales taxes are up, there are other economic factors that indicate the state’s fiscal situation.
“It’s good to have some natural growth, but you know, we’re still – I will say that the state is still relying on annual tax increases to cover the budget needs that the majority party wants to cover,” Davidsmeyer said.
Also up year-over-year is the unemployment rate, sitting at an average of 5.1% – up 0.7% compared to the same period in 2025.
The lawmaker said Illinois “lags behind” other states, but the report did show some good signs.
“It actually came out a little bit more positive than the federal outlook – the overall outlook. But I think that Illinois tends to have a higher unemployment rate. We tend to lag behind the nation. So as we’re catching up to where they’re at,” Davidsmeyer said.
Gov. J.B. Pritzker announced that the state has received multiple credit rating increases from different groups late last month and on Sept. 1.
His announcement also described legislative efforts in Springfield passed this year that he expects will help strengthen the state’s unfunded pensions, with one law using excess revenue from income tax to pay into state plans.
Moody’s Investors Service, S&P Global Ratings, and Fitch Ratings all revised their ratings of Illinois’ borrowing and ability to pay back debt through bonds, which Pritzker touted as being the 11th, 12th and 13th consecutive credit rating increases under his administration.
The representative said while those credit ratings mean the state is capable of paying off debt, there are other fiscal concerns that aren’t addressed, and Illinois still ranks among the bottom compared to other states.
“Moody’s noted specifically that we still have underfunded pensions. We’re making progress on it, but it’s still underfunded. We have below average growth nationally. We have limited financial flexibility,” Davidsmeyer said.”I believe this report specifically came out and said despite credit upgrades, Illinois continues to remain as the weakest rated state in the country by both Moody’s and S&P.”
As the state sees revenues trending up, the report notes that increases in revenue are not expected to continue at this level throughout the year.
For FY 2026, the commission found that the general revenue from taxes and fees exceeded the state budget by $1.003 billion, or 1.8% higher – offsetting lower than expected federal funds and corporate tax income with higher than expected revenue from personal income tax, estate tax and other money transferred into the state’s general fund from other state sources.
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