Despite a stopgap spending measure enacted on June 30, 2016, State of Illinois appropriations for higher education remain below expenditures in fiscal year 2015—the last year the State had a complete annual budget. For FY2016 and FY2017, appropriations from general operating funds and related accounts total $1.6 billion, or 82.4% of the $1.9 billion spent in FY2015. In other words, higher education has been authorized to receive less than a full year’s worth of funding, compared with FY2015…
After a yearlong stalemate, the State of Illinois finally saw a crack in its ongoing budget impasse on the last day of the fiscal year. The General Assembly rushed approval of bills authorizing a full year of preschool through high school education funding, including additional assistance for the Chicago Public Schools, along with a partial spending plan for other government services to cover some FY2016 and FY2017 costs. The stopgap budget bills were passed and signed into law…
In advance of a $550 million bond sale this week, the State of Illinois announced it had negotiated new terms with the largest holder of Illinois swaps. The new lower level for termination of the swaps based on Illinois’ credit ratings dropped to Ba1 with Moody’s Investors Service and BB+ with Standard and Poor’s. As discussed here previously, under its swap agreements the State is required to maintain a bond rating above a certain level or the deal is terminated. When a swaps contract is…
With the current year’s budget still incomplete, the State of Illinois is now facing the prospect of starting another year without a financial plan. Due to a political dispute between Illinois’ Republican Governor and Democratic legislators who control the General Assembly, the State does not have a comprehensive budget for fiscal year 2016, which ends on June 30. Despite recent efforts by lawmakers, there are no clear signs of progress on a budget for FY2017, which begins on July 1. Since…
The State of Illinois can add another complication to its already stressed financial condition, an $800.7 million shortfall in its capital spending plan caused by failure in several of the dedicated revenue sources enacted to fund debt service. The State relies heavily on the sale of bonds to fund the capital budget. The original Illinois Jobs Now! capital program passed in 2010 included approximately $16.2 billion of bond-funded expenditures.[1] The State has issued $11.9 billion in bonds to…
The Civic Federation is unable to support Governor Rauner’s recommended budget for FY2017 because it has an operating deficit of at least $3.5 billion and presents an insufficiently detailed plan for closing the gap. According to the report, the $3.5 billion deficit appears to be significantly understated, because it does not fully account for the actual cost of essential State services. Illinois’ backlog of bills could grow as high as $12.8 billion by the end of FY2017 under the plan. This…
The State of Illinois’ budget impasse could cost taxpayers another $138 million due to liabilities associated with its swaps portfolio, if the lack of a spending plan causes its bond ratings to fall much further. As previously discussed here, two of the three major rating agencies cut Illinois’ bond ratings in October 2015 due to its ongoing budget crisis and worsening financial condition. These downgrades make Illinois the only state credit currently rated below the ‘A’ category and…
Due to its growing backlog of overdue group health insurance bills, the State of Illinois is expected to pay a total of at least $454 million in interest penalties in the current and upcoming budget years, according to a new report. The report by the General Assembly’s Commission on Government Forecasting and Accountability (COGFA) shows that the backlog of unpaid claims held by the State Employees’ Group Insurance Program stood at approximately $2.9 billion at the end of February 2016. That…
As the State of Illinois’ budget impasse continues to drag on, it is commonly overlooked that the underlying economy and tax base in the State continue to grow. In FY2017 the State of Illinois is projected to have an additional $631 million in General Funds revenues available compared to FY2016, the current fiscal year. The Governor’s FY2017 recommended budget shows a maintenance level of revenues totaling $32.3 billion, which represents resources available based on current law, compared to $…
With the budget for the current fiscal year still incomplete, Governor Bruce Rauner proposed a financial plan for the next budget year with an operating deficit of $3.5 billion. The proposed budget for fiscal year 2017, which begins on July 1, 2016 and ends on June 30, 2017, was issued on February 17, 2016. The recommended FY2017 budget includes general operating revenues of $32.8 billion and expenditures of $36.3 billion. Rather than providing a specific plan to close the $3.5 billion gap…
