October 2, 2013
This analysis of the State of Illinois’ Fiscal Year 2014 Enacted Budget finds that the budget may represent a high-water mark, with future years bringing sharp reductions in revenues and further consequences of the unresolved pension crisis. Although the State reduced the backlog of unpaid bills to $5.8 billion, that progress is threatened by legislative failure to prepare for extreme financial challenges on the immediate horizon.
Pension costs in FY2014 total $7.65 billion, including annual contributions and payments on past pension bonds. This represents 24.3% of State-source General Funds revenues, an already unsustainable level that is projected to rise sharply in future years without reform. FY2014 is also the last full year before the State faces dramatic reductions in revenues due to the scheduled partial rollback of the income tax rate increases in January 2015.
The State’s Fiscal Year 2014 began on July 1, 2013 and ends on June 30, 2014.