The Civic Federation has long supported the development of a consensus revenue forecast for the State of Illinois. Public finance experts recommend that the executive and legislative branches reach agreement on a revenue forecast prior to the publication of the Governor’s annual budget to help ensure the review of critical assumptions, remove the forecast from ongoing dispute and keep the budget process on track. It is technically too late to implement that process for the 2019 budget year,…
New monthly reports by the Illinois Comptroller’s Office provide the first detailed public information about interest penalties owed on the State’s mountain of overdue bills. As of the end of February, the State owed an estimated $983 million in late-payment interest, an increase of $96 million since the report was first issued two months ago. What do these numbers mean? Answering that question requires a quick lesson on Illinois’ bill payment process. At the tail end of the process, after the…
In a recent post, this blog analyzed the potential impact on State of Illinois revenues from replacing the current flat income tax rate with a graduated income tax. This post extends the analysis by looking at the effect of combining a graduated tax rate with the Civic Federation’s longstanding proposal to tax retirement income. As explained here, Illinois, like most states, bases its individual income tax on the federal income tax, with certain modifications. The federal government taxes…
Of the 41 states with broad-based personal income taxes, Illinois is one of eight with a flat tax rate. The Illinois Constitution requires everyone to pay a single statutory rate, regardless of taxable income. The other 33 states and the federal government have graduated income tax rates, with higher rates applied to higher income levels. Should Illinois amend its constitution to allow graduated income tax rates? The issue has come up repeatedly in the past few years and has resurfaced in the…
Amid concerns about renewed political stalemate in Springfield, Illinois Governor Bruce Rauner on February 14, 2018 proposed a budget for the next fiscal year that relies on shifting State pension and health insurance costs to school districts and public employees. The budget recommendation for fiscal year 2019 also requires public universities and community colleges to pick up additional pension and healthcare costs. However, many of those costs would be offset by increased funding—at least…
After two years without a complete budget but with spending exceeding revenues, Illinois’ backlog of unpaid bills rose to $16.8 billion in November 2017. Now the cost for that payment delay is coming due. Through the first seven months of FY2018, the State spent $337.9 million on interest penalties on overdue bills, according to Civic Federation calculations based on data on the Illinois Comptroller’s website. Spending on interest penalties in the current fiscal year, which ends on June 30,…
Click here to read the full report. Prior to the release of the Governor’s annual budget recommendation, the Institute for Illinois’ Fiscal Sustainability at the Civic Federation releases an analysis of the State of Illinois’ fiscal condition. This report presents the Civic Federation’s multi-year plan to stabilize Illinois’ finances and balance the State's budget. While Illinois has ended its devastating two-year budget impasse, the enactment of a revenue and spending plan for FY2018…
Illinois has grappled with a number of financial challenges over the last decade, including structural deficits, pension underfunding and a two year standoff without a budget. Now, some leaders and advocates have begun to demand renewed attention to how the State funds transportation and other infrastructure. In recent testimony before the Illinois General Assembly House Transportation Committee, the Chicago Metropolitan Agency for Planning stated that the State’s transportation funding had “…
2018 Civic Federation Legislative Priorities The Civic Federation's legislative priorities for 2018 include public employee pension reforms, consolidation of local government units in Illinois, enacting policies to rationalize the property tax system, creation of a Local Government Protection Authority, requiring the State of Illinois to build a rainy day fund, development and implementation of a capital improvement plan, among others. …
The following are the five most read blog posts presented by the Institute for Illinois’ Fiscal Sustainability in 2017. These posts discuss issues ranging from Medicaid expansion to the end of Illinois’ historic two-year budget impasse and related legislation. A Review of Medicaid Expansion in Illinois under the Affordable Care Act January 12, 2017 Medicaid expansion was a key feature of the Affordable Care Act (ACA), designed to reduce the number of people without health insurance. While…
