Additional revenues dedicated to the Budget Stabilization Fund in FY2024
On Friday, as required by the Governor’s and General Assembly’s Fiscal Year 2023 budget, the final deposit for FY23 will be made into the Budget Stabilization Fund, and the State of Illinois’ Fiscal Year 2024 budget will deposit an additional $138 million, boosting the fund to over $2 billion, its highest balance in state history. The Budget Stabilization Fund held less than $60,000 when the Governor took office.
“Just six years ago our state had nearly nothing in our rainy-day fund, $17 billion in unpaid bills, and had suffered 8 credit downgrades,” said Governor JB Pritzker. “Today, we have no bill backlog, a $2 billion rainy-day fund, and eight credit upgrades. Illinois is finally finding its fiscal footing, and with an economy that has now reached over a $1 trillion in GDP, we are among the top states for workforce and business.”
Illinois created the Budget Stabilization Fund in 2001 with the intent to use it as a ‘rainy-day’ fund for future fiscal emergencies or economic downturns. Very little was deposited into the fund following its creation and its balance never exceeded $276 million – a small fraction of the state’s budget. It was used as a tool to assist with cash flow until it was nearly drained during the budget impasse in Fiscal Year 2017, when the $275 million balance was used to pay bills.
Strong revenue performance enabled the State to reduce unpaid bills, repay short-term borrowing, and set aside resources for future fiscal stability. During Fiscal Year 2022, the Governor worked with the General Assembly to deposit $746 million into the Budget Stabilization Fund, and the State will tomorrow finalize its deposits of another $1.18 billion in Fiscal Year 2023.
The balance in the Budget Stabilization Fund will grow an estimated $138 million in Fiscal Year 2024 under current law and is expected to have a $2.1 billion balance at the end of Fiscal Year 2024. Additionally, PA 102-1115 raised the targeted balance of the fund from 5 percent of general funds revenues to 7.5 percent of revenues, demonstrating Illinois’ commitment to responsible fiscal planning.
Ongoing dedicated revenues to the Budget Stabilization Fund and estimated FY2024 amounts include:
- 10% of state cannabis tax revenues ($25 million)
- Monthly transfers of $3.75 million from the General Revenue Fund ($45 million)
- Repayment over 10-years from the loan of $450 million to the State’s UI Trust Fund ($45 million)
- Interest earnings on the fund’s balance ($23 million)