Topic: Facility Closure Meeting - Pere Marquette Youth Center
Date: Monday, June 22, 2009
Time: 3:30 p.m. **Note Time Change**
Location: Pere Marquette Lodge and Conference Center
13653 Lodge Blvd., IL Rte 100
Grafton, IL 62037

REVENUE: FEDERAL STIMULUS FUNDS HELP AVERT MORE THAT $2 BILLION PLUNGE--REVENUES STILL DROP $515 MILLION IN FY 2009
Jim Muschinske, Revenue Manager

Excluding cash flow transfers, general funds receipts closed out the fiscal year by increasing $290 million in June. The monthly gain was due to $520 million in additional federal sources made possible by $473 million in direct federal stimulus revenue. Unfortunately, large losses from personal and corporate income taxes and sales taxes wiped out most of the federal source gains.
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Despite $1.566 billion in direct federal stimulus revenue, overall base receipts finished down $515 million in FY 2009. The declines are attributed to the continuing effects of the ongoing recession as the combined economic related sources [income and sales taxes] represented $1.689 billion in fall offs. In addition, lower transfers accounted for $307 million of the slowing. Federal sources aside, only public utility taxes and insurance taxes managed to post gains for the year which demonstrated that the recession’s grip is not discriminating, and that virtually all sectors of the economy are being negatively impacted...Clearly, were it not for the gains made possible by the stimulus package, Illinois would have suffered the largest one-year revenue drop in its history.

ECONOMY: THE SHAPE OF THE COMING RECOVERY
Edward H. Boss, Jr., Chief Economist

There is a growing consensus that an economic recovery is on the horizon...Last month’s Revenue Briefing reported on green shoots that were beginning to appear in the recession. Since then more shoots have appeared...If an economic recovery lies ahead, a key question is what will be the shape of the advance? Perhaps the best outcome that can be hoped for might be described as a backward J, a sharp economic downturn led by a modest recovery with individuals and businesses depending less on leverage and repair their balance sheets. Whether or not this shape is achieved, however, lay in the future course of fiscal and monetary policy. Massive government spending and huge budget deficits raise concerns over renewed inflation and a deteriorating dollar. To quell such an occurrence monetary policy must avoid monetizing the debt and remove liquidity as the recovery takes hold. The timing will be crucial. Too slow to act risks igniting inflation, while too rapid a removal of liquidity could precipitate another recession, leading to the dreaded W shape.