March 31, 2011
Although it includes deep cuts to some agencies and programs, the FY2012 budget proposed by Governor Pat Quinn includes increases in other areas that would more than offset the reductions. In all, the proposed budget for FY2012 would increase General Funds appropriations for agency operations by more than $1.0 billion.
General Funds appropriations make up the majority of the State’s operating budget and are the part over which the Governor and legislature have the most discretion. Total agency appropriations as proposed by the Governor would increase from $25.8 billion in FY2011 enacted budget to $26.8 billion in FY2012. The detailed agency budgets published in the Governor’s recommended budget for the fiscal year beginning on July 1, 2011 show a total of $1.0 billion in cuts from agency budgets, but $2.1 billion in increases in General Funds allocated to other agencies.
The largest reduction to any agency’s General Funds appropriations included in the recommended budget was to the Governor’s own agency. The proposed budget shows the department’s budget reduced from $522.9 million to $6.4 million, a $516.5 million cut. However, this represented the loss of lump sum authority granted to the Governor by the General Assembly for funds allocated to other agencies and programs to fund FY2011 operations. The proposed $6.4 million in FY2012 operations funding for the Governor’s office is actually an increase of $1.8 million over the $4.6 million the Governor proposed in the FY2011 budget. The following chart shows all agency budget reductions from the FY2011 enacted budget to the FY2012 proposed budget.
The second largest cut and most significant reduction in agency operation funding is the proposed $388.5 million, or 10.6%, reduction to the Department of Human Services (DHS) budget, which makes up 37.7% of total cuts to General Funds appropriations. The program funding proposed by the Governor for the agency includes the following reductions:
- Child Care Services: reduced by $333.3 million, or -53.9%;
- Put Illinois to Work: reduced by $107 million, or -100%;
- Addiction Treatment Services: reduced by $47.1 million, or -100%;
- Mental Health Grants: reduced by $33.5 million, -23.0%;
- Employability Developmental Services: reduced by 9.3 million, or -53.5%;
- State Transitional Assistance: reduced by $9.6 million, or -100%.
Increases in other DHS programs offset some of these reductions in the total agency budget, which accounts for why these amounts sum to a larger reduction than what is shown in the chart above.
The proposed budget for the Illinois Department of Transportation (IDOT) in the Governor’s budget also declines significantly. The recommended budget includes a total General Funds appropriation for IDOT of $11.5 million, a reduction of $67.7 million, which amounts to 85.5% of the agency’s FY2011 General Funds budget. However, all of the program cuts to the IDOT are restored and some even increased through designated grants from Other State Funds.
The $36 million grant to the Regional Transportation Authority for reduced fares for students, handicapped and the elderly included in FY2011 General Funds appropriations is cut completely in the FY2012 budget but restored and increased in Other State Funds to $40 million. Similarly, General Funds support for AMTRAK of $26.0 million in FY2011 is cut completely in the FY2012 budget but increased $37 million from Other State Funds. The $8.5 million Pace Paratransit budget also eliminated from General Funds spending would also be restored by appropriations included in Other State Funds.
The largest General Funds increase in appropriations for any single program included in the FY2012 budget is for State Group Health Insurance. Last year the General Assembly underfunded its health insurance program, causing the State to increase its accumulated backlog of unpaid medical bills for employees and retirees that is expected to total $1.1 billion at the end of FY2011. As explained in several reports by the Civic Federation the backlog of unpaid bills in the State Group Insurance program has built up over several years due to costs exceeding appropriations. The Governor’s budget recommends appropriating $1.4 billion for the program in FY2012, an increase of $739.7 million, or 106.3%, more than in the FY2011 enacted budget. The following chart shows all of the General Funds appropriation increases to agencies included in the Governor’s FY2012 proposed budget.
As previously discussed here, the increase in General Funds appropriations, along with other expenditure increases for pension contributions and debt service, lead to an operating shortfall of $1.5 billion in the Governor’s proposed budget.
However, the General Assembly appears to be developing a budget for FY2012 that is a departure from the Governor’s recommendation. Both the House of Representatives and the Senate have passed resolutions that set spending limits much lower than the Governor’s proposed budget. The House also set appropriations limits for various operating purposes that are lower than the Governor’s budget. For instance, the General Funds appropriations for education are limited to a total of $6.9 billion, which is $400 million less than the $7.3 billion included for elementary and secondary education in the Governor’s budget.