The State of Illinois ended its two-year budget impasse on July 6, 2017, enacting a $36.1 billion spending plan with about $5 billion in tax increases. To break the logjam, the General Assembly narrowly overrode Governor Bruce Rauner’s…
The State of Illinois has renegotiated the termination thresholds on four of its five interest rate swaps to help avoid termination fees if the State’s credit rating is downgraded further. After the regular Illinois legislative session closed on May 31, 2017 with no budget being passed by both chambers of the General Assembly, two ratings agencies moved swiftly to downgrade the State. On June 1, both S&P and Moody’s lowered Illinois’ General Obligation bond rating by one notch, to BBB…
The Illinois General Assembly ended its regular session on May 31, 2017 without passing a budget, heightening concerns that the State might move into a third year without a complete financial plan. Standard & Poor’s and Moody’s Investors Service immediately lowered Illinois’ credit rating by one notch to just above junk status. S&P cited “the severe deterioration of Illinois’ fiscal condition, a byproduct of its stalemated budget negotiations” and Moody’s pointed to the “prolonged…
June 13, 2017 UPDATE: The State of Illinois has renegotiated the termination thresholds on four of its five interest rate swaps to help avoid termination fees if the State’s credit rating is downgraded further. Original post published on May 19, 2017 With the end of the Illinois General Assembly legislative session looming and a budget compromise still out of reach, the potential for ratings downgrades once again threatens to trigger termination of Illinois’ interest rate…
Click here to read the full report. The Civic Federation’s Institute for Illinois’ Fiscal Sustainability not able to support Governor Rauner’s recommended FY2018 budget because it has an operating deficit of at least $4.6 billion, presents an insufficiently detailed plan for closing the gap and does not address Illinois’ massive backlog of bills. In addition to analyzing the recommended budget, the report examines the costs of the ongoing impasse and the irreparable harm caused to our…
As Illinois approaches the end of its second year without a complete budget, lawmakers are debating a new plan to provide partial funding for higher education and human services. This blog post examines the size of the funding gap and how far the proposal would go toward closing it. Most State spending has continued during the prolonged budget impasse due to court orders, consent decrees, existing statutory authority and full-year enacted appropriations for elementary and secondary education.…
While Illinois lawmakers remain gridlocked over a State budget plan, another area shows promise of compromise in Springfield: government consolidation. With over 6,900 local government units, Illinois has more units of government than any other state. The multiplicity of local units of government, many of which are funded predominantly by property taxes, is often cited as a reason for high property tax rates in Illinois. The issue of government consolidation receives bipartisan support by…
On Friday March 24, 2017 Illinois Governor Bruce Rauner vetoed Senate Bill 2437, legislation that was intended to increase city funding to help prevent the City of Chicago’s Municipal and Laborers’ pension funds from going insolvent within the next decade. The legislation had passed with large bipartisan majorities in the Illinois House and Senate. This was the City’s second attempt to improve the funding status of its Municipal and Laborers’ Pension Funds. The Illinois Supreme Court struck…
On March 22, two State Senate committees heard testimony on Illinois’ fiscal crisis. The not surprising message of the nearly three-hour hearing: the State’s budget problems have built up over many years, driven largely by rising pension costs, and will not be easy to fix. Thomas Walstrum, an economist at the Federal Reserve Bank of Chicago, testified about his research on the history of Illinois’ fiscal performance, which compares Illinois’ spending and revenues with that of other…
In addition to many other obstacles to achieving a balanced budget, Illinois now faces another setback this week, this time in the form of under-performing revenues. A report issued by the Commission on Government Forecasting and Accountability (COGFA) revised the agency’s earlier forecast of FY2017 General Funds revenues down by $674 million. The first forecast, issued in July 2016, had estimated $31.8 billion[1] in total revenues for the fiscal year. The revised estimate projects only $31.1…
