IIFS Blog

06.12.13

State’s Deadline for Paying Bills Permanently Extended

Due to its large backlog of outstanding bills, the State of Illinois has permanently extended its annual deadline for paying old bills to December 31—six months after the end of the fiscal year. The extension was enacted without fanfare in August 2012 as an amendment to the State Finance Act...

06.06.13

Illinois’ Bond Ratings Cut After General Assembly Adjourns Without Pension Reform

Less than a week after the Illinois General Assembly adjourned its regular spring session without approving reform of the State’s underfunded retirement systems, two of the three major rating agencies have downgraded the State’s bond ratings. Both Fitch Ratings and Moody’s...

05.30.13

New Reports Show Financial Impact of Proposed State Pension Changes

As the Illinois General Assembly approached its scheduled adjournment date of May 31, 2013, the State’s pension systems produced new reports estimating the financial impact of proposed pension legislation. The reports by the retirement systems’ actuaries concern two bills—Senate...

05.21.13

State Pays Down Backlog of Bills

Due to a surge in income tax receipts, the Illinois Comptroller’s Office has been able to reduce the State’s backlog of unpaid bills by $3.8 billion in the last four months. General Funds bills and other payables in the Comptroller’s Office declined by 54.8% to $3.1 billion on...

05.17.13

Internet Sales Tax Legislation Does Not Automatically Apply to Illinois

Many cash-strapped states are looking to a proposal in the U.S. Congress to help collect sales taxes on internet purchases. The legislation could lead to a windfall in recaptured state sales tax revenues but currently would exclude Illinois. The U.S. House of Representatives and the U.S. Senate are...

05.09.13

Union-Backed Pension Reform Proposal Approved by Senate

A union-backed pension reform proposal sponsored by Senate President John Cullerton was passed by the Senate on May 9, 2013 by a vote of 40 to 16. Senate President Cullerton believes that Senate Bill 2404 is a less risky option for the State than legislation discussed here, which was approved by...

05.02.13

House to Consider Speaker’s Pension Reform Bill

UPDATE: On May 2, 2013, the House passed Speaker Michael Madigan’s pension reform proposal by a vote of 62 to 51. During the debate on the House floor, Speaker Madigan said that the changes are expected to reduce the State’s required contribution in FY2015 by $1.5 billion from FY2014...

04.24.13

Illinois Lacks an Executive-Legislative Consensus on Revenue Estimates

An important first step in preparing a government budget is the preparation and publication of revenue estimates for the upcoming fiscal year. The estimates provide the basis for the spending decisions that are subsequently incorporated into the budget. Under Illinois law, the Governor begins the...

04.11.13

Illinois Bond Sale Results Reflect State’s Financial Woes

Despite historically low interest rates, bonds recently sold by the State of Illinois continue to cost much more than debt issued by other states. Even when compared to similarly low-rated California bonds, the $450 million of tax-exempt bonds sold by Illinois appear to have cost the State at least...

04.05.13

Governor Proposes Reduced State Funding for Local Governments and Mass Transit

Faced with rising pension costs and modest revenue growth, Governor Pat Quinn has recommended a reduction in State of Illinois funding for local governments and statewide public transportation. In his FY2014 budget, the Governor proposed capping those distributions at FY2012 levels. Savings to the...

03.27.13

State Requests Extension for Cook County Medicaid Expansion Plan

The State of Illinois has asked the federal government to extend Cook County’s Medicaid expansion plan to ensure that recipients remain covered after the end of 2013. In a letter on March 21, 2013, the Illinois Department of Healthcare and Family Services (HFS) told federal authorities that...

03.22.13

State Pension Update: House Approves Limits to Pension COLA

On March 21, 2013, the Illinois House passed a bill that would significantly reduce the State’s pension costs by limiting automatic annual benefit increases for retirees and employees. House Bill 1165, approved by a vote of 66 to 50, addresses the largest single factor driving the State...

03.21.13

State Pension Update: Comprehensive Reform Proposal Rejected by Senate

On March 20, 2013, the Illinois Senate rejected a proposal designed to significantly reduce the State's burdensome pension costs but approved a narrower measure that applies only to active teachers outside of the City of Chicago. Senate Bill 35 was defeated by a vote of 23 to 30. The bill,...

03.14.13

Governor Proposes Corporate Tax Changes to Pay Down Bills

Governor Pat Quinn has proposed eliminating several corporate tax incentives to help pay down the State’s backlog of unpaid bills that is expected to total $7.5 billion at the end of the current fiscal year. The Governor’s proposal would eliminate three rules that allow corporations to...

03.08.13

Governor’s FY2014 Budget Preempted by House Spending Limit

On March 6, 2013, Governor Pat Quinn issued his recommended budget for the fiscal year that begins on July 1, 2013. However, the first major obstacle to the Governor’s proposed FY2014 budget emerged a day earlier, when the Illinois House approved a revenue projection that was significantly...

02.27.13

New Pension Reform Proposal Garners Bipartisan Support

A bipartisan group of Illinois lawmakers has signed onto a new pension reform proposal designed to reduce the State’s massive pension costs. House Bill 3411, co-sponsored by 20 Republican legislators and 11 Democrats, was introduced in the Illinois House on January 26, 2013. Senate Bill 35...

02.21.13

Governor’s Budget Address Officially Postponed to March 6, 2013

After months of uncertainty, the date of Governor Pat Quinn’s budget address for FY2014 was officially postponed through action by the Governor on the same day it was originally required by law to be delivered.   Although the later date of March 6, 2013 has been included on the General...

02.14.13

State’s Unpaid Group Health Insurance Bills to Rise in FY2013

Even though the Illinois General Assembly recently appropriated an additional six months of funding for State group health insurance, unpaid bills relating to the program are expected to increase by more than $200 million to $1.6 billion by the end of the current budget year. The legislature...

02.06.13

Medicaid Expansion in Illinois: Costs and Benefits

The State of Illinois, like other states, is faced with a decision on whether to expand its Medicaid program in 2014 under the federal Affordable Care Act. The decision in Illinois is complicated by a State law that bans such a Medicaid expansion until 2015. As discussed here, the State moratorium...

02.01.13

State Capital Funding Remains Low After Canceled Bond Sale

State bond funding for infrastructure projects in Illinois is running out after a $500 million issuance was pulled from the market earlier this week. The bond sale was cancelled due to concerns about higher than expected interest rates from bidders on the competitive issuance in the wake of the...

01.30.13

State’s Bond Rating Downgraded in Advance of $500 Million Bond Sale

UPDATE: In the face of unfavorable market conditions triggered by the downgrade of its bond rating last week, the State of Illinois announced that it would not complete the bond sale originally scheduled for today, January 30, 2013. A Governor’s spokesperson said that after talks with...

01.15.13

Governor’s Projection Shows Impact of Income Tax Rollback

A new three-year budget projection for the State of Illinois by Governor Pat Quinn’s administration shows that significant spending reductions will be needed to balance the State budget in FY2015 and FY2016, when temporary income tax rate increases start to be phased out. Even with the...

01.10.13

Unfinished Business Looms at the Close of the 97th General Assembly

The 97th Illinois General Assembly’s closing session ended on January 9, 2013, leaving many questions unresolved about the State’s current budget year and fiscal sustainability in the face of its $97 billion unfunded pension liability. At the end of each two-year legislative session,...

01.03.13

Analysis of Pension Reform Proposal Shows Significant State Savings

A pension reform proposal introduced in the Illinois General Assembly late last year could immediately reduce the State’s required annual contributions by nearly $2 billion, according to recent actuarial reports. As discussed here, a bipartisan group of legislators unveiled House Bill 6258 on...

12.27.12

IIFS Blog Continues to be at Forefront of Illinois Fiscal Developments

Throughout this year’s Illinois budget negotiations, the IIFS blog was a valuable source of information and focus in the State’s murky and complex budget process. This year’s negotiations included a groundbreaking effort to address the Medicaid funding gap, new pension reform...

12.21.12

FY2013 Budget Update: Unfunded Costs in the Department on Aging

This blog has previously addressed unfunded costs in the State of Illinois’ FY2013 budget, including costs relating to Medicaid and employee and retiree group health insurance. As discussed here, these costs will increase the State’s backlog of unpaid bills unless they are covered by...

12.14.12

Federal Fiscal Cliff Could Have a Major Impact on State Revenues

If the U.S. Congress is unable to agree to an alternative to the automatic $491 billion in combined tax increases and spending cuts set to take place in January 2013, many are predicting dire national economic consequences. Additionally, Illinois and other states will also see a major decrease in...

12.06.12

New State Pension Reform Legislation Introduced: HB6258

On the final day of the General Assembly’s fall veto session, a bipartisan group of State legislators unveiled a new pension reform proposal designed to help resolve the State’s pension crisis. Governor Pat Quinn has called on the General Assembly to make pension reform its top priority...

11.29.12

Federal Government Sets 2013 End for Cook County Medicaid Plan

UPDATE: House Bill 6253, which would lift the Illinois moratorium on Medicaid expansion for those who will be eligible under national healthcare reform in 2014, has been filed in the Illinois General Assembly. Watch this space for more information about Medicaid expansion under the Affordable Care...

11.29.12

New Report Reviews State of Illinois Infrastructure

The Institute for Illinois’ Fiscal Sustainability released a new report today that provides an overview of the condition and funding of Illinois infrastructure. As discussed in a previous post, one of the report’s functions is to compile needs assessments from a number of public...