IIFS Blog

07.17.14

Retiree Health Insurance Ruling to Increase State Costs by $128 Million

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...

07.09.14

Court Ruling on Health Insurance Could Add to State of Illinois Budget Woes

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...

07.02.14

Governor Signs Illinois' Operating Budget but Vetoes Capitol Complex Upgrades

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...

06.26.14

Teachers’ Retirement System Changes Will Affect Pension Savings

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...

06.19.14

The Illinois Income Tax: A Significant Source of Revenue for Local Governments

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...

06.13.14

Illinois General Assembly Approves Expanded Capital Budget with Additional Borrowing

Although Governor Pat Quinn originally proposed a capital budget for FY2015 with no new debt-funded projects, the General Assembly approved an additional measure that added $1.1 billion in new road projects that will be funded through the sale of long-term capital bonds. As previously discussed...

06.05.14

New Details Emerge on FY2015 Illinois Budget

A week after the Illinois General Assembly ended its spring session, legislative leaders circulated new information about the FY2015 spending plan approved by lawmakers. General Funds spending in the legislature’s budget totals $35.8 billion, according to a budget overview issued by Senator...

05.29.14

Illinois House Defers Major Budget Decisions

UPDATE: Illinois General Assembly Passes FY2015 Budget On May 30, 2014, a day before the end of the Illinois General Assembly’s regular spring session, the Senate passed the FY2015 budget previously approved by the House. As discussed below, the budget does not cut spending or extend existing...

05.23.14

State of Illinois Capital Budget Forgoes New Bond-Funded Projects

The capital budget proposed by Governor Pat Quinn for FY2015 represents the sixth year of the Illinois Jobs Now! capital spending program and the first year since its inception that new bond-funded projects are not included in the recommendation. The capital budget includes $2.9 billion in new...

05.15.14

Illinois Medicaid Enrollment under Affordable Care Act Exceeds Projections

More Illinois residents than originally projected are signing up for Medicaid as a result of the federal Affordable Care Act, but the long-term impact on the State budget remains unclear. Illinois officials had initially projected that 241,500 new recipients would sign up by the end of the current...

05.09.14

Governor’s Five-Year Projections Illustrate Dramatically Different Financial Paths

As part of the FY2015 budget recommendation for the State of Illinois, Governor Pat Quinn provided two separate five-year projections for both “recommended” and “not recommended” budget proposals. The long-term outlooks show the implications of the extension of higher income...

05.02.14

Rhode Island Pension Settlement Rejected, Trial Set to Start in September

A settlement agreement on Rhode Island’s pension reform litigation that was presented to pension system members for a vote has been rejected even though most groups overwhelmingly backed it. The vote was structured such that any one group of members could scotch the agreement if more than 50...

04.24.14

Illinois Lacks True Rainy Day Fund

Governor Pat Quinn’s recommended budget for FY2015 proposes that the State of Illinois build a financial cushion to deal with future economic downturns. The Governor suggests the creation of an adequate “rainy day” fund in a five-year blueprint for the State, but specifics of the...

04.18.14

Governor Quinn's FY2015 Budget Includes Interfund Borrowing to Close Budget Gap

Although the budget recommended by Governor Pat Quinn for FY2015 proposes extending current income tax rates to avoid a massive revenue cliff, it also relies on borrowing $650 million to close a budget gap and pay down a portion of the State’s backlog of unpaid bills. Despite the additional...

04.11.14

Illinois Delays Submission of $5 Billion Medicaid Plan

UPDATE: On June 4, 2014, the State of Illinois filed its application for a $5 billion Medicaid plan with the federal government. Advocates for Medicaid recipients said they were told by State officials that there were no substantial changes from the version of the plan posted for public comment in...

04.04.14

Rhode Island’s Landmark Pension Reforms Could Be Adjusted Under Proposed Settlement Agreement

As the legal battle over Illinois’ new pension law continues, courts continue to issue rulings on similar pension changes in other states. Last month, Governor Lincoln D. Chafee, General Treasurer Gina M. Raimondo, and the Federal Mediation and Conciliation Board signed off on a settlement...

03.28.14

Illinois Governor’s Recommended FY2015 Budget Extends Income Tax Increases

On March 26, 2014, Governor Pat Quinn presented an FY2015 budget proposal for the State of Illinois that avoids a fiscal cliff by retaining temporary income tax increases that were scheduled to be phased out beginning in January 2015. The Governor’s recommended budget also significantly...

03.20.14

Governor’s FY2015 Budget Recommendation Faces Illinois' Steep Revenue Cliff

Next week Governor Pat Quinn will give his sixth budget address since taking office in 2009. The budget is expected to be one of the most difficult of his tenure considering that the State is currently expected to have approximately $5.4 billion in unpaid bills at the end of FY2014 and will see a...

03.17.14

Cost of Illinois' Retirement Income Tax Exemption

Unlike the federal government, the State of Illinois exempts all retirement income from the individual income tax. Of the 41 states that impose an income tax, Illinois is one of only three that exempt all pension income and one of 27 that exclude all federally taxed Social Security income,...

03.05.14

Long-Term Financial Plan Recommended for State of Illinois

In its recently released FY2015 budget roadmap report, the Institute for Illinois’ Fiscal Sustainability at the Civic Federation recommended that the State of Illinois publish a five-year financial plan and that the plan be updated annually. This recommendation follows a best practice of the...

02.28.14

Legislative Revenue Estimate Shows Size of Illinois' Fiscal Cliff

The Illinois House of Representatives has approved a revenue projection for the coming fiscal year that includes a $2.2 billion loss in operating resources for FY2015, after a holding series of committee meetings to deliberate varying estimates. The General Funds revenue estimate totaling $34.5...

02.20.14

Illinois Law Requires New Revenue Diversions from General Funds in FY2015

It is widely known that the State of Illinois faces a dramatic reduction in general operating revenue starting on January 1, 2015, when temporary income tax rate increases enacted in 2011 are scheduled to partially roll back. General Funds income tax receipts will also decline around the same time...

02.14.14

Improved Revenue in Current Year Means Steeper Cliff to Come

At a recent committee hearing, Illinois lawmakers were provided with a mixed message regarding the economy and State budget for the coming fiscal year. Officials from the Illinois Department of Revenue explained that although the State could expect improved underlying economic growth in the next...

02.06.14

Rhode Island Pension Reform: Two Years Later

In the fall of 2011, the Rhode Island General Assembly passed and Governor Lincoln Chafee signed landmark pension reform legislation intended to end a pension funding crisis and make retirement obligations for public employees more sustainable for the state and many local governments. To learn more...

01.29.14

Actuarial Reports Show Illinois' Savings from Pension Reform Law

The State of Illinois’ new pension law is expected to reduce statutorily required State contributions by $144.9 million over 30 years and lower its unfunded pension liability by about $24 billion, according to actuarial reports from the largest retirement systems. An analysis of the actuarial...

01.23.14

Illinois to Seek $3.25 Billion in New Federal Medicaid Funding from Waiver Plan

The State of Illinois hopes to receive approximately $3.25 billion in new federal Medicaid funding under a proposal to be submitted to the federal government in March. The estimated amount of new federal funding in the State’s comprehensive waiver proposal was discussed at a General Assembly...

01.17.14

Illinois Pledges Additional Pension Funding Under New Law

Although the most significant change in Illinois’ new pension law consists of a reduction in annual benefit increases paid to current and future retirees, the legislation also requires the State to commit additional funding to the retirement systems through a series of supplemental payments...

01.10.14

Governor's Budget Projection Shows Illinois' Continuing Financial Woes

Despite savings from recently enacted pension reforms, the State of Illinois’ finances could still worsen considerably after income tax increases are partially phased out as scheduled beginning in 2015, according to a report by Governor Pat Quinn’s office. The three-year general...

01.03.14

States Face Legal Challenges Over Reduced Pension COLAs

States inevitably face lawsuits when they attempt to ease budgetary pressures by cutting pension payments to current employees and retirees. While the legal battle over Illinois’ new pension law has just begun, courts have already issued rulings on similar pension changes in other states....

12.26.13

2013 Year in Review on the Institute for Illinois’ Fiscal Sustainability Blog

The following posts were among the most highly read on the Institute for Illinois’ Fiscal Sustainability’s blog in 2013 and represent some of the most closely followed Illinois fiscal issues this year: Analysis of Pension Reform Proposal Shows Significant State Savings January 3, 2013...