Governor Pat Quinn’s plan to cancel pay raises for State of Illinois unionized workers due to insufficient funds in the FY2012 budget has hit a major hurdle. The plan, which would have affected 30,000 members of Council 31 of the American Federation of State, County and Municipal Employees (AFSCME) across 14 state agencies, would have violated a union contract, according to a ruling on July 19,…
After two consecutive years of losses, the State of Illinois is reporting moderate growth in sales tax revenue for FY2011, which ended on June 30, 2011. Not only did sales tax revenue collected by the State grow but it also beat the projections on which the budget was based. Total General Funds revenues from sales taxes declined from FY2008 through FY2010 by nearly $1 billion, from $7.2 billion…
Governor Pat Quinn signed the State of Illinois’ FY2012 budget on June 30, 2011, a day before the start of the new fiscal year. The FY2012 budget is expected to generate a mountain of unpaid Medicaid bills and a possible court battle over union pay raises. In signing the budget, which includes $32.987 billion in general operating funds, the Governor reduced the budget passed by the General…
The Federal Reserve Bank of Chicago recently co-hosted a conference featuring analysis and discussion among local and national budget experts to better understand the fiscal condition of states and prospects for economic recovery after several years of ongoing financial stress. The meeting was co-hosted by the by the Federal Reserve Banks of Philadelphia and New York in partnership with the John…
The Illinois General Assembly reconvened on June 22, 2011 for an extra day of the spring session to sort out several issues that were not addressed three weeks ago when the legislature adjourned after approving a $33.2 billion budget. Both the House and the Senate took action to reauthorize the State’s ongoing $31-billion capital program, which was first enacted in FY2010. As previously discussed…
Despite a significant increase in Illinois’ corporate income tax rate enacted in January 2011, much of the anticipated new State revenue will be offset by corporate tax incentives provided in recent changes to the federal tax code. Known as bonus depreciation, the federal rule allows businesses to take an upfront deduction for the cost of capital investments in machinery or equipment from their…
Although lawmakers have been considering ways to cut the State of Illinois’ costs for state retiree health insurance, the General Assembly adjourned on May 31, 2011 without taking action on the issue. A bill (Senate Bill 175) to require all retirees to pay a share of the cost for insurance premiums cleared the Senate Executive Committee on May 29 by a vote of 9 to 6. However, the sponsor, Senator…
After several significant budget related initiatives failed to advance out of the General Assembly, such as proposed pension reforms and borrowing to pay down the State’s backlog of unpaid bills, the legislature passed an operating budget for FY2012 in the final hours of its regular session late on May 31, 2011. The budget passed by both chambers and sent to Governor Pat Quinn totals $33.2…
Surprising as it may seem, not all budget cuts reduce spending. A case in point is the FY2012 Medicaid budget passed by the Illinois House on May 13, 2011. House Bill 3717 includes $6.9 billion of General Funds appropriations for the State of Illinois’ Medical Assistance Program.[1] As indicated in the chart below, the House budget is $537.3 million below Governor Pat Quinn’s proposed FY2012…
A new report estimates that the State of Illinois could save between $260 million and $300 million in FY2012 by increasing the share of health insurance premiums paid by retirees and their dependents from the current average of roughly 9% to approximately 50%. As previously discussed on this blog, the General Assembly’s Commission on Government Forecasting and Accountability (COGFA) hired a…
