After a steady run of bad budget news, Illinois revenue officials finally got some that was good.
A state report reveals tax revenues were higher both in September compared with the same month in 2024 and in the first quarter (July-September) of the new 2025-26 fiscal year compared with the same quarter in the previous fiscal year.
For September, revenues increased by $413 million (8.6 percent), and for the first quarter of fiscal year 2025-26, they were up by $450 million (3.7 percent).
State income-tax payments were decisive, increasing by $307 million — 10.3 percent — in September compared with 2024. Comparing the first quarter of fiscal year 2025-26 to 2024-25, they’re up by $258 million — a 3.7 percent hike.
The higher revenues were largely attributable to quarterly state income-tax payments due Sept. 15 and “an additional receipting day (in September) as compared to a year ago.”
At the same time, revenue officials expressed concern about another decline in corporate income-tax revenue.
Those revenues declined by $270 million (18.9 percent) in the fiscal first quarter as compared with the same period a year ago. They were down by $196 million (18.1 percent) in September as compared with September 2024.
Eric Noggle, revenue manager for the Legislature’s Commission on Government Forecasting & Accountability, said “the majority of revenue sources have performed reasonably well to start the fiscal year,” but the “same cannot be said” for corporate income taxes.
Noggle said corporate income-tax revenue was “originally projected to grow by 10.8 percent” in fiscal 2025-26 as compared to 2024-25, but changes in federal tax law “may offset much of the anticipated corporate tax revenue growth from the state-level reform.”
He said “Illinois conforms to many aspects of the federal tax code, and that, as a consequence, tax reductions at the federal corporate level are followed by state tax reductions.
“The corporate income tax will remain a particularly difficult revenue source to forecast for the remainder of the fiscal year,” Noggle said.
He speculated that decline might be offset by other revenue increases that “could mitigate or even outweigh these losses.”
Revenues have increased by $450 million in the first quarter of fiscal 2026 compared with 2025. The jump from $12.076 billion to $12.536 billion is a 3.7 percent increase.
That’s not the booming hike Gov. J.B. Pritzker and state legislators would like. Perhaps that explains why Pritzker recently ordered state department heads to identify potential across-the-board 4 percent budget reductions.
He said the state is “doing OK right now.”
Legislators approved an operating budget of $55.2 billion for the current fiscal year, a $15 billion increase from the state’s 2019 budget of $40.2 billion.
In addition to state income-tax revenues, sales-tax revenue also increased in September.
Sales-tax revenue was up $54 million in September as compared with the same month last year. That’s a 5.6 percent increase — from $962 million in September 2024 to $1.016 billion in September 2026.
For the first quarter of fiscal 2025-26, it increased by $181 million over the first quarter of fiscal 2024-25. That’s a 6.3 percent increase — from $2.869 billion to $3.050 billion.
The Big Three — sales tax and the personal and corporate income taxes — provide the lion’s share of state revenues.
Other lesser revenue sources ran the gamut — cigarette tax revenues were down again, along with liquor, utility and investment income, in the first quarter of fiscal 2025-26. Other lesser sources of revenue increased, including estate and insurance taxes.
