After stabilizing due to legislative changes, Illinois’ contributions to its severely underfunded retirement systems are expected to resume their climb in the upcoming budget year. Proposed State contributions to the five pension funds rise by $539.9 million to $8.5 billion in fiscal year 2019, which begins on July 1, 2018. That represents an increase of 6.8% from $7.9 billion in FY2018. Because of recent changes in Illinois pension law, the FY2018 amount is only 1% higher than the $7.…
The financial condition of Illinois’ pension funds improved slightly due to strong investment returns, but they remained critically underfunded at the end of fiscal year 2017. The five State-funded retirement systems had total unfunded liability of $129.1 billion as of June 30, 2017, based on the market value of assets, and a combined funded ratio of 39.8%. That compares with unfunded liability of $129.8 billion and a funded ratio of 37.6% a year earlier. Unfunded liability is the pension…
When the Illinois General Assembly overrode Governor Rauner’s veto of the FY2018 budget package in July, it estimated that the enacted budget would have an operating surplus of about $360 million. Since the override, Governor Rauner has insisted that the legislature’s budget plan results in a deficit rather than a surplus. This week the Governor’s Office of Management and Budget (GOMB) released numbers supporting that assessment in an economic and fiscal policy report and accompanying five-…
Illinois has by far the greatest number of local governments in the nation at 6,963, according to the U.S. Census Bureau’s 2012 Census of Governments. The vast number of local governments in Illinois is often cited as a driving factor for Illinois’ high property tax rate, one of the highest in the nation, as many of the local governments are primarily funded by property taxes. A large share of these local governments consist of local school districts, which in turn typically make up the largest…
Illinois Public Act 100-0401, signed into law on August 25, 2017, will increase the value of the Senior Citizens and General Homestead Exemptions in Cook County starting in Tax Year 2017 (payment year 2018). It also increases the income limitation for the Senior Citizens Assessment Freeze Homestead Exemption (“Senior Freeze”) for all counties in Illinois and provides for a minimum exemption in Cook County. This blog post will examine these latest changes to homestead exemptions enacted by the…
For nearly two months, the fate of Illinois’ budget for the current fiscal year was in doubt because of Governor Bruce Rauner’s veto of a school funding bill. With compromise education funding legislation enacted on August 31, attention can now turn to the FY2018 budget itself and specifically on whether it is balanced. An operating budget is balanced if expenditures match projected revenues. On paper, the budget enacted by the General Assembly on July 7—in an override of another gubernatorial…
After several iterations and much disagreement, the State of Illinois now has a new statewide school funding formula. The Illinois General Assembly approved the new formula as Senate Bill 1947, House Floor Amendment 5 on August 29, with the Illinois House passing the bill Monday, August 28 and the Senate concurring the next day. The Governor signed the bill into law as Public Act 100-0465 on August 31, 2017. This historic new funding formula will help alleviate the ailing finances of the…
Seven weeks after the General Assembly enacted Illinois’ first budget in three years by overriding the Governor’s veto, the backlog of bills owed by the State still stood at $14.5 billion.[1] As this blog discussed in July, the General Assembly’s budget did not attempt to address the entire backlog in a single year. Rather, the Budget Implementation (BIMP) Act authorized a package of measures that sponsors claimed would reduce the deficit by about $8 billion. The act authorized up to $6 billion…
After two years with no complete budget except for public school funding, Illinois now faces the prospect of beginning the 2017-18 school year with a budget for everything except schools. On August 1 Governor Rauner issued an amendatory veto of the school funding bill, SB1, passed by the General Assembly on May 31. Because the appropriations bill enacted in July over the Governor’s veto required that primary and secondary education funding be allocated with an evidence-based formula, the…
Higher education was one of the areas hit hardest by the State of Illinois’ two-year budget impasse. This blog post examines how higher education fares under the budget enacted earlier this month by the General Assembly’s override of Governor Bruce Rauner’s vetoes. The new budget has appropriations for fiscal year 2018, which began on July 1, and additional appropriations for the previous fiscal year. With the new spending authority, the State’s average annual funding for higher education from…
