Illinois Legislative News: September 14, 2026
Third Reading Consulting Group
Illinois collected $3.883B in General Funds revenue in August of FY 2027, an increase of 9.2% (or $326M) over August of FY 2026. The year-over-year increase was driven primarily by a surge in personal income tax collections (up 10.4% or $195M), continued strength in sales tax (up 9.0% or $91M), and a notable jump in federal sources (up 30.9% or $115M). Corporate Income Tax posted a modest gain of 8.3% (or $6M) in what is historically one of the lightest months for this revenue source, while All Other State Sources rose by a combined 34.7% (or $100M), largely due to a timing-related rebound in interest on state funds and investments. Transfers In declined by 45.8% (or $147M), driven by the absence of the Income Tax Refund Fund transfer that brought in $150M last August. Illinois’ FY 2027 budget estimates $55.946B in revenue, a 0.6% decline from the final FY 2026 revenue figure of $56.295B, reflecting anticipated declines in Personal Income Tax revenues tied to the Department of Revenue's true-up reconciliation process as well as reduced transfers into General Funds.
Two months into FY 2027, General Funds revenues are up 7.0% (or $515M) compared with the same period in FY 2026. Each of the "big three" revenue sources has contributed to this strong start, with additional notable growth from Federal Sources. Personal Income Tax revenue is up 5.0% (or $196M), Sales Tax revenue is up 11.0% (or $223M), and Corporate Income Tax revenue is up 50.7% (or $138M). Sales Tax has been the largest contributor to the cumulative FY 2027 revenue growth, supported by strength in certain taxable categories, particularly motor fuel and motor vehicle sales. Federal Sources are also up a combined 25.4% (or $172M), though the historical volatility of this revenue category means that this strong year-to-date growth may not persist in the months ahead. Growth from these revenue sources has more than offset year-over-year declines from a few smaller revenue sources.
Through August, all other state sources are down a combined 0.6%, weighed down by an $18M decline in Estate Tax receipts and a $5M drop in other sources. These declines have been partially offset by modest year-to-date gains in Public Utility Taxes ($11M) and Insurance Taxes ($6M), while interest in State Funds and Investments swung sharply between July and August but is essentially flat on a year-to-date basis. Transfers In are down a combined 29.2% (or $147M), driven by a steep drop in the Income Tax Refund Fund transfer, which brought in $150M last August but nothing this August and is projected at only around $50M for all of FY 2027, down from $700M in FY 2026. Helping to offset these declines are year-to-date increases in Gaming Transfers ($19M), Sports Wagering Transfers ($17M), and Cannabis Transfers ($4M). With year-to-date revenues outpacing FY 2026 and the FY 2027 budgeted level, Illinois will have a slight buffer to make up for any potential weaker revenue performance later in the year.
Important Upcoming Dates – Statewide
November 3 – Illinois General Election
November 17-19 – Veto Session Week 1
December 1-3 – Veto Session Week 2