TRANSMITTAL LETTER FOR BOARD MEETING OF NOVEMBER 2, 2023
COMMITTEE ON BUDGET AND EMPLOYMENT
Mr. Brian A. Perkovich, Executive Director
Title
Report on Budgetary Revenues and Expenditures for the third quarter of 2023, ended September 30, 2023
Body
Dear Sir:
Attached is a report on revenues and expenditures for the third quarter of 2023, ended September 30, 2023. This report is prepared on an unaudited budgetary basis of accounting.
The third quarter 2023 Corporate Fund actual net tax revenue of $266.2 million consists of $201.9 million in current year tax receipts and $64.3 million in prior year tax receipts. The second installment of 2022 property tax bills have been delayed and are expected to be released by November 1st with the due date of December 1st. The District has positioned itself to have sufficient funds to meet its operating and capital needs through the year-end. The third quarter 2023 Corporate Fund actual non-tax revenue of $75.9 million includes user charge income of $30.4 million, rental and easement income of $21.3 million, TIF distributions of $12.2 million, investment income of $7.6 million, and other miscellaneous revenues.
The 2023 third quarter expenditures of $282.4 million are 59.5 percent of the Corporate Fund budget. Two of the primary expenditure drivers, energy and healthcare costs, are monitored closely throughout the year. Energy expenditures (electricity and gas) are $1.6 million more than through the same period in 2022. This trend is expected to continue because Carbon-Free Energy Resource Adjustment (CFRA) credits from ComEd have been exhausted. Healthcare costs are $1.8 million lower than the same period in 2022. The decrease is primarily due to lower claims costs for the retiree population during this period.
Personal Property Replacement Tax (PPRT) totaled $97.5 million with $54.1 million allocation to the Corporate Fund, $18.4 million allocation to the Retirement Fund, and $25.0 million allocation to the Construction Fund. Treasury and the Budget Office continue to monitor the economically sensitive PPRT, but it is projected to slowly decline year-over-year for the next five years and remain steady near $75.0 million annually.
The two primary economic factors driving District revenues are the real estate market and the Consumer Price Index (CPI). Through September 2023, the Illinois Association of Realtors reports that Chicago metropolitan area home sales are down 23.3 percent, while the median sales price increased 3.2 percent compared to the same period in 2022. Home sales continue to decrease due to increases in interest rates.
According to the Bureau of Labor Statistics, the all-items index increased 3.7 percent for the 12 months ending in September 2023. The all-items less food and energy index rose 4.1 percent over the last 12 months. The energy index decreased 0.5 percent for the 12 months ending in September 2023 and the food index increased 3.7 percent over the last year.
According to Reuters, a report from the Labor Department showed the annual increase in consumer prices excluding the volatile food and energy components last month was the smallest in two years. With the labor market remaining tight, however, reaching the Federal Reserve's 2.0 percent inflation target could take some time, making it likely that the U.S. central bank could keep rates elevated for longer.
The Budget Office will continue to closely monitor economic conditions, revenues, and expenditures throughout 2023.
Respectfully Submitted, Shellie A. Riedle, Administrative Services Officer
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