Reflecting severe financial pressures, the State of Illinois pushed an estimated $3.6 billion of Medicaid and group health insurance bills from FY2012 into the current fiscal year. The new estimate is based on documents filed in connection with the State’s bond offering on September 13, 2012. The $3.6 billion in deferred bills in FY2012 compares with $1.7 billion in FY2011. As discussed here, a provision of Section 25 of the State Finance Act allows costs for Medicaid and group health insurance…
Although the State of Illinois is still burdened with a multibillion-dollar backlog of unpaid bills, one component of that backlog—unpaid income tax refunds—is now expected to be eliminated at the end of FY2013. The Illinois Department of Revenue projects that no approved refunds will be unpaid on June 30, 2013. That compares with $735 million owed at the end of FY2010 and only $70 million at year-end FY2012. Currently, no approved refunds are owed, according to…
The State of Illinois’ bond rating was reduced again this week but despite being one of the lowest rated state credits it remains well above the level assigned to speculative debt. On August 29, 2012 Standard & Poor’s (S&P) reduced the State’s long-term General Obligation (GO) bond rating to A from A+ and issued a negative outlook. This was the third time S&P reduced the State’s bond rating since March 2009, when Illinois was downgraded to AA-. Prior to that downgrade, the State…
The State’s largest retirement system postponed until September a decision on whether to reduce the system’s assumed rate of return on investment — a decision that could result in an increase in the annual State contribution required by law. As discussed here, on August 23, 2012 the Board of Trustees of the Teachers’ Retirement System (TRS) considered a consultant’s recommendation to lower the assumed annual investment rate of return from 8.5% to either 8.25%, 8% or 7.75%. According to a news…
On August 17, 2012, Illinois legislators adjourned a special one-day session of the General Assembly without taking action on the State’s pension crisis. Due to the stalled effort, the State continues to face pension costs that will consume an increasing share of its resources over the next two decades. The chart below compares total pension costs—including State contributions and payments on pension bonds—with State-source general operating revenue. The share of revenue used for pension costs…
The State of Illinois’ enacted budget for FY2013 is missing key components needed to carry out the General Assembly’s spending plan, according to a recent filing in connection with State bond offerings. The bond disclosure documents, which were filed by Governor Pat Quinn’s Office on August 6, 2012, indicate that the enacted general operating funds budget totals $33.041 billion. In contrast, a press release issued after Governor Quinn signed the budget on June 30 stated that the budget totaled…
Earlier today, Illinois Governor Pat Quinn signed legislation intended to add transparency, accountability and competition to the State’s Enterprise Zone Act. The Civic Federation’s issue brief on Illinois enterprise zones, previewed in a blog post last month, is now available on our website. The purpose of this issue brief is to describe: · How enterprise zones currently operate in Illinois and recent efforts to reform their administration and implementation; · The types of tax incentives…
This issue brief examines how enterprise zones currently operate in Illinois. Enterprise zones are geographic areas designed by state and/or local governments to stimulate economic growth and create or retain jobs in economically depressed areas. The purpose of this issue brief is to describe: • Recent efforts to reform the administration and implementation of enterprise zones in Illinois; • The types of tax incentives offered in Illinois; • The number and county location of Illinois enterprise…
In the wake of the U.S. Supreme Court decision on national healthcare reform, Illinois officials plan to seek authorization from the Illinois General Assembly to participate in the expansion of the Medicaid program under the federal Affordable Care Act. Julie Hamos, Director of the Illinois Department of Healthcare and Family Services, told members of the agency’s Medicaid Advisory Committee at a meeting on July 20, 2012 that legislation authorizing the expansion will be sought during the fall…
As discussed here previously the Illinois General Assembly recently passed a sweeping overhaul of its Enterprise Zone Act. If signed by the Governor, the new law will change how the State grants and renews economic development areas and will require additional reporting to help determine the effectiveness of the tax benefits provided under the law. Enterprise zones are areas designated by governments as economically depressed and in need of tax benefits to promote growth and create or retain…
