In recent years, Illinois’ delayed payment of bills has caused financial stress for vendors, social service agencies and local governments. It has also cost the State $1.0 billion in interest penalties since fiscal year 2006, according to data from the Illinois Comptroller’s Office. Under the State Prompt Payment Act, interest accrues at 1% a month on “proper bills” that are not paid within 90 days. Proper bills are defined as those that include the information needed to process the payment.…
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 three-year plan to stabilize Illinois’ finances and addresses the State’s critical financial situation. More than seven months into the current fiscal year, the State of Illinois continues to operate without a budget. Under current revenue…
Based on available market data, the State of Illinois paid approximately $40 million more for the $480 million of new bonds it sold in January than it would have before its bond ratings were downgraded at the end of last year. As previously discussed here, due to the FY2016 budget impasse, two of the three major rating agencies reduced the State of Illinois’ bond ratings in October 2015. These downgrades made Illinois the only state credit currently rated below the ‘A’ category and signals a…
2016 Civic Federation Legislative Priorities The Civic Federation's legislative priorities for 2016 include public employee pension reforms, consolidation of local government units in Illinois, expanding the income and sales tax base while controlling spending, creation of a Local Government Protection Authority, development and implementation of a capital improvement plan, establishing a consensus revenue forecast procedure for the State of Illinois and extending the property…
The Civic Federation has long supported legislation aimed at improving the efficiency and effectiveness of government operations in Illinois by consolidating or abolishing redundant and/or anachronistic local governments. For example, on November 17, 2003, the Federation called on the State to abolish the Suburban Cook County Tuberculosis Sanitarium District. The District was ultimately dissolved by State statute 70 ICLS 920/5.4 in 2006. The Federation also released a report on June 30, 2008,…
A new report by Governor Bruce Rauner’s administration projects that the State of Illinois’ backlog of unpaid bills could grow to $25.0 billion in FY2019 from $4.4 billion in FY2015 based on current tax and spending policies. The three-year forecast, issued on January 6, 2016, covers FY2017 through FY2019. It also includes actual budget results for FY2015, which ended on June 30, 2015, and estimated results for FY2016, which began on July 1, 2015. The projected growth in unpaid bills is not…
After a 20-month hiatus from the municipal bond market, the State of Illinois recently announced it would sell bonds later this month in order to continue paying for ongoing capital projects in need of additional funding. According to the bond sale documents posted online, the State will sell $480 million of tax-exempt bonds on January 14, 2016. The bonds will be sold through a competitive bid process and will include equal amounts of principal repaid over 25 years to comply with State…
The following were among the most highly read posts provided by the Institute for Illinois’ Fiscal Sustainability in 2015. Understandably, they represent the most closely followed Illinois fiscal issue of the year: the ongoing state budget impasse. The posts have been listed in chronological order, rather than by number of views, for the purpose of best explaining the events related to the matter. Governor Proposes Deep Cuts and New Pension Reforms to Balance FY2016 Budget February 20…
As Illinois enters the sixth month of fiscal year 2016 without a budget, the backlog of unpaid group health insurance bills has reached more than $2 billion and is likely to grow much larger. In the absence of an FY2016 budget, the group health insurance program is one of the major areas of State government for which there appears to be no legal authority to pay the bills. Nevertheless, the program’s costs must be paid eventually because of State law and union contracts. When the overdue bills…
The Civic Federation supports the Chicago Park District’s proposed FY2016 operating budget of $458.1 million that reduces the District’s reliance on one-time revenue sources and accommodates increased employer pension contributions for the second year in a row while holding the property tax levy relatively flat. The budget balances the demands of increased pension funding while showing restraint in not unduly increasing the tax burden on Chicago residents. However, a pending lawsuit…
