In recent years, the State of Illinois’ financial woes had been complicated by a massive backlog of unpaid income tax refunds. When the backlog was paid off by the end of FY2013, the State reaped a surplus of diverted funds that will boost revenues by $397 million in FY2014. Income tax revenues are diverted to the Income Tax Refund Fund to pay tax refunds owed to individuals and businesses. The Illinois Income Tax Act requires that any surplus in the Refund Fund must be transferred to General…
Several recently enacted laws are designed to increase public access to information about the State of Illinois’ budget and improve other aspects of the State’s budget process. The following table lists budget-related legislation signed by Governor Pat Quinn since the end of the General Assembly’s spring session on May 31, 2013. Public Act 98-0461, signed on August 16, requires the Governor’s Office of Management and Budget (GOMB) to post detailed information about the State budget on its…
To support construction projects during the busy summer months, the State of Illinois issued $2.0 billion of capital purpose debt, which for the most part will be repaid from the State’s Capital Projects Fund. The Fund was created to receive the revenues from a package of new taxes and fees that was passed in FY2010 to fund the $31-billion Illinois Jobs Now! capital program. As previously discussed here, these revenue sources have lagged far behind the original legislative estimates. With the…
At the end of the month, the Board of Education for Chicago Public Schools will vote on the District’s $5.6 billion operating budget for FY2014. The total budget of $6.6 billion is supported by local, state and federal revenues and other resources, including $761.6 million of appropriated fund balance. This blog focuses on the State of Illinois’ resources for CPS. The State of Illinois will provide a total of $1.8 billion of revenues in the CPS FY2014 budget, which is a slight decrease of $8.2…
Moody’s Investors Service downgraded the bond ratings for seven of the nine public universities in Illinois on August 9, 2013. The ratings include a negative outlook for all of the institutions. The action from Moody’s comes after a review of the finances of the State’s university system which began on June 10, 2013, less than a week after the agency downgraded the State’s General Obligation Bond (GO Bond) rating to A3 from A2. Nearly all of the debt issued by the institutions is now rated the…
The scheduled rollout of Medicaid managed care in Illinois has been delayed by six months so hospitals can set up their own healthcare networks for Medicaid patients. The new networks, known as Accountable Care Entities (ACEs), are intended to cover children and families. The State’s Medicaid agency, the Illinois Department of Healthcare and Family Services (HFS), originally intended to enroll those recipients in managed care beginning in January 2014, but the date has been pushed back to July…
As the State of Illinois enters the fifth year of its $31-billion Illinois Jobs Now! capital spending program, revenue sources approved to fund the projects are still lagging far behind original projections. Revenues deposited in the Capital Projects Fund in FY2013 from dedicated taxes and increased fees approved by the General Assembly in FY2010 are between $300 million and $500 million short of the original expectations. The funding is needed to pay for anticipated debt service on more than…
On July 22, 2013, Governor Pat Quinn signed legislation to allow Illinois to expand its Medicaid program under the federal Affordable Care Act beginning in January 2014. Illinois is among 23 states that are expected to join the Medicaid expansion, according to a recent report by the Kaiser Family Foundation. The District of Columbia is also participating. As of July 2013, six states were still debating the expansion, while 21 had decided not to move forward. The following table, based on the…
An increase in the cigarette tax increase designed to provide additional funding for the Illinois Medicaid program generated more revenues than expected despite a drop in sales and hoarding of tax stamps prior to the effective date of the tax increase. As discussed here, the $1-per-pack increase was enacted as part of an overhaul of the Medicaid program that sought to eliminate a funding gap of $2.7 billion in FY2013. The State estimated that the increase would bring in an additional $350…
Charged with finding a solution to the State of Illinois’ pension crisis, a legislative conference committee is considering a reform framework proposed by public university presidents. The central feature of the university proposal is a compounded automatic annual benefit increase set at half of the percentage increase in the Consumer Price Index (CPI). Current Illinois retirees and employees hired before January 1, 2011 receive compounded increases of 3%. If inflation averages 2.75% over the…
