Some recent progress has been made when it comes to reducing the number of local governments in Illinois. The State of Illinois has 6,963 local governments. To provide context to this issue, the table below displays the type and number of local governments in Illinois compared to other select midwestern states. Of the 6,963 local governments in Illinois, county governments make up 102, or 1.5% of the local governments; municipal governments make up 1,298, or 18.6% of the local governments;…
Businesses do not always pay their bills immediately, and neither do governments. Delays of a month or two are standard practice, although prompt payment is preferable to take advantage of discounts, avoid penalties and maintain access to the largest possible pool of vendors. Since FY2009, long payment delays by the State of Illinois have been a highly visible sign of the State’s financial distress. With revenues under pressure due to the Great Recession, the State also faced growth in…
Unincorporated areas lie outside municipal boundaries. The residents and businesses located in these areas are usually provided municipal services such as police protection and building code enforcement by county government or special districts. Because unincorporated areas may be scattered throughout a county’s territory, the provision of these services by counties has been inefficient and costly. Annexation of unincorporated areas to neighboring municipalities is often proposed as a solution…
According to recent reports, the State of Illinois’ operating revenues, which are expected to decline this year due to the partial rollback of State income tax rates, exceeded expectations in FY2014, the last full year of the increased income tax rates. Documents published by the State to update bond disclosures include preliminary results for FY2014, which ended on June 30. The new data show FY2014 General Funds revenues totaled $36.8 billion, which represents an increase of $1.3 billion from…
Less than a month into the new fiscal year, which began on July 1, Standard and Poor’s announced that the financial outlook for the State has deteriorated from “developing” to “negative.” The rating agency directly blamed the FY2015 budget approved by the Governor and General Assembly for the change in perspective. An analyst from S&P stated that the budget was not structurally balanced, which would cause liquidity pressures for the State and that there was concern over the implementation…
The Illinois Supreme Court’s recent ruling on health insurance for State retirees is expected to increase State costs by approximately $128 million through FY2015, according to the Department of Central Management Services. Although litigation is ongoing, the high court’s decision apparently means the State will bear the cost of health insurance premium increases previously charged to retirees. Officials at the Department of Central Management Services (CMS) said that those premiums amounted…
A court ruling on health insurance for retired State of Illinois workers could put additional pressure on the State’s stopgap budget for the year that began on July 1, 2014. In a 6 to 1 decision on July 3, the Illinois Supreme Court ruled that health insurance subsidies for State retirees are protected by the Illinois Constitution’s pension protection clause. The provision states that “[m]embership in any pension or retirement system of the State… shall be an enforceable contractual…
Despite criticizing the General Assembly for not passing an adequate budget for the new fiscal year, Governor Pat Quinn signed the legislature's appropriations bills into law on June 30, 2014, the last day before the start of FY2015. The Governor vetoed $250 million from the capital budget, but the change will not affect the State’s operating expenditures. As discussed here, the FY2015 General Funds budget approved by the legislature totals $35.8 billion ($35.751 billion) in expenditures and…
UPDATE: In addition to the Teachers’ Retirement System (TRS), two other large State of Illinois pension funds have also lowered their assumed rates of return on investment. Both the State Universities Retirement System (SURS) and the State Employees’ Retirement System (SERS) recently reduced their assumed investment rates of return from 7.75% to 7.25%. SURS took the action on June 13, 2014, according to a spokeswoman for the retirement system, while documents show that SERS made the decision…
Under Illinois law, the State is required to share a certain portion of state income tax receipts with municipal and county governments in Illinois through the Local Government Distributive Fund (LGDF). The state revenue shared with local governments is a legislatively required transfer from the General Fund to the Local Government Distributive Fund. The Illinois Comptroller then distributes the funds to the local governments based on population. Local governments are able to…
