State of Illinois FY2014 Recommended Operating and Capital Budgets: Analysis and Recommendations

May 13, 2013

The Civic Federation supports Governor Pat Quinn’s $62.4 billion FY2014 recommended operating budget for balancing revenues and expenditures without borrowing and making progress toward reducing the State’s backlog of unpaid bills. However, this budget proposal is only a stopgap that further demonstrates the urgent need for comprehensive pension reform.

The State’s pension costs, including debt payments on past borrowing for pensions, will consume nearly 25% of State-source General Funds revenues in FY2014. The Civic Federation continues to urge the General Assembly to enact reforms that will significantly reduce the State’s pension obligations.

Although the Governor’s recommended budget pays down more than $800 million in unpaid bills, the State is still expected to end the year with a backlog of $6.8 billion. The Civic Federation warns that the State’s unpaid bills will become even more burdensome after January 1, 2015, when the partial rollback of the temporary income tax increase is scheduled to begin. The Civic Federation further cautions that the Governor’s budget might overstate savings on retiree health insurance negotiated with labor unions, potentially leading to a larger than projected backlog of bills.

The full report also includes recommendations for expanding Medicaid eligibility under the Affordable Care Act, establishing a process for the executive and legislative branches to develop a consensus revenue estimate prior to publication of the Governor’s budget, and developing a formal capital improvement plan and economic development policy.

Click here to read the press release for this analysis.