In its second annual report issued earlier this month, the Illinois’ Budgeting for Results Commission called for the elimination or replacement of mandated expenditures including statutorily required boards and commissions, program initiatives, fund transfers and other expenditures currently required under Illinois law but judged to be outdated or obsolete. Mandated expenditures direct agencies by law to take specific actions or provide services to particular populations or interest groups.…
The financial condition of the State of Illinois’ five retirement systems worsened in FY2012, with the systems’ total unfunded liability growing to $96.8 billion as of June 30, 2012 and the combined funded ratio declining to 39.0%. The FY2012 numbers compare with a total unfunded liability of $83.1 billion and combined funded ratio of 43.3% at the end of FY2011. The following table, based on recent actuarial reports for the retirement systems, shows their financial condition at the end of…
The State of Illinois needs to contribute a total of $6.8 billion to its five retirement systems in FY2014 to meet statutory funding requirements, according to recent recommendations by the five systems. The proposed total FY2014 contribution amount is $964.7 million, or 16.4%, more than actual FY2013 State contributions of $5.9 billion. The proposed total for FY2014 is also $636.8 million, or 10.3%, larger than the FY2014 contribution of $6.2 billion projected a year ago. The following table…
A national report on state budget issues released this week details the ongoing operating budget problems in Illinois and highlights the State’s dire need to invest in its neglected infrastructure. According to the State Budget Crisis Task Force report on Illinois, State and local governments could need to invest more than $300 billion over the next 30 years to maintain depleted roads, bridges, mass transit, water systems and other public infrastructure throughout the state. The task force…
The fact that the State of Illinois is no longer behind on paying business income tax refunds is good news for taxpayers and the State budget. But due to an obscure provision of State law, the elimination of the refund backlog also means that the State will distribute an estimated $182 million less in Personal Property Replacement Tax (PPRT) to local governments in FY2013 than in FY2012. As discussed here, no approved income tax refunds are currently owed and the Illinois Department of Revenue…
Although discussion about the State of Illinois’ annual budget primarily focuses on the operating expenditures the State also appropriates significant funding each year for capital investments. The State approved a $22.7 billion capital budget for FY2013 that is not part of the $33.0 billion General Funds budget enacted for operations. Since FY2005, the State’s capital budget and operating budget have been recommended as separate documents by the Governor and considered in separate budget bills…
This analysis of the State of Illinois’ Fiscal Year 2013 budget estimates that projected savings could reduce the State’s existing backlog of $8.9 billion in unpaid bills by roughly $1.3 billion, but warned that the reduction may be difficult to achieve. The budget reflects significant steps to rein in the costs of Medicaid but fails to address the unsustainable costs of the State’s pension systems. The State’s Fiscal Year 2013 began on July 1, 2012 and ends on June 30, 2013. Click here to read…
The State of Illinois’ largest pension fund recently revised several key assumptions that affect the fund’s financial condition and the contributions that must be made by the State under Illinois law. As discussed here, the Board of Trustees of the Teachers’ Retirement System (TRS) approved the changes at a meeting on September 21, 2012. The most significant and widely reported change was a reduction in the assumed rate of return on investment to 8.0% from 8.5%, a decision that increases…
A $1-per-pack cigarette tax increase enacted by the State of Illinois in June to help fund the State’s Medicaid program is bringing in far less revenue than originally expected and could fall short of projections by as much as $125.7 million. However, due to the way the tax was enacted it is not expected to have a major impact on Medicaid funding. The Illinois Department of Revenue (IDOR) has reduced the estimate of additional revenues attributable to the cigarette tax increase citing a run on…
The State’s largest retirement system voted on September 21, 2012 to reduce its assumed rate of return on investment, a decision that will increase the annual State contribution required by law beginning in FY2014. The Board of Trustees of the Teachers’ Retirement System (TRS) voted 11 to 2 to reduce the assumed rate of return to 8% from 8.5%, according to a news release. As discussed here, a consultant recommended in August 2012 that TRS lower the rate to either 8.25%, 8% or 7.75%. According…
