TRANSMITTAL LETTER FOR BOARD MEETING OF MAY 18, 2023
COMMITTEE ON BUDGET AND EMPLOYMENT
Mr. Brian A. Perkovich, Executive Director
Title
Report on Budgetary Revenues and Expenditures for the first quarter of 2023, ended March 31, 2023
Body
Dear Sir:
Attached is a report on revenues and expenditures for the first quarter of 2023, ended March 31, 2023. This report is prepared on an unaudited budgetary basis of accounting.
The first quarter 2023 Corporate Fund actual net tax revenue of $129.8 million consists of $66.9 million in current year tax receipts and $62.9 million in prior year tax receipts. Due to the delay of the second installment of Cook County property taxes, payments were not fully received by the 2022 year-end, but the majority of payments were received by the end of January 2023.
Corporate Fund actual non-tax revenue of $24.4 million includes user charge income of $13.5 million, rental and easement income of $7.1 million, investment income of $2.1 million, and other miscellaneous revenues. The District contributed $30.0 million in Corporate Fund budgetary reserves to the Retirement Fund to maintain the funded ratio.
The 2023 Corporate Fund Budget is $475.1 million, an increase of $36.6 million from the 2022 Budget, reflecting anticipated growth in revenue estimates.
The 2023 first quarter expenditures of $77.8 million are 16.4 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 $5.1 million lower than the same period in 2022. The decrease is primarily due to the timing of payments. Healthcare costs are $1.7 million lower than the same period in 2022. It is expected that these expenditures will normalize during the second quarter of 2023.
Personal Property Replacement Tax (PPRT) receipts total $30.7 million with $18.4 million allocation to the Retirement Fund and $12.3 million allocation to the Construction Fund.
The two primary economic factors driving District revenues are the real estate market and the Consumer Price Index (CPI). Through March 2023, The Illinois Association of Realtors reports that Chicago metropolitan area home sales are down 28.7 percent, while the median sales price has increased 0.3 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 5.0 percent for the 12 months ending March, this was the smallest 12-month increase since the period ending May 2021. The all items less food and energy index rose 5.6 percent over the last 12 months. The energy index decreased 6.4 percent for the 12 months ending March and the food index increased 8.5 percent over the last year. According to Bloomberg, the CPI report offers glimpses of disinflation ahead even while highlighting the sticky nature of inflation, particularly within the service sector. While policymakers are closely watching for any sign that the latest banking turmoil is weighing on the economy, brisk consumer price gains paired with a still-strong labor market are likely to lead the Fed to raise interest rates at least once more before an extended pause.
Given that inflation continues to be high, the Budget Office is watching expenditures, particularly in the commodity classes. Monthly expenditures are analyzed, and prices and trends are proactively reviewed. 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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