In the absence of a budget for FY2016, the State of Illinois is moving forward with a plan to issue debt through the Illinois Finance Authority to fund some essential operating expenses. However, the loans could cost the State millions in interest over the next 10 to 20 years based on information being circulated by the IFA to potential underwriters for the bonds. According to procurement documents on the IFA website, the Authority currently has statutory approval to issue $115 million in…
The State of Illinois’ contributions to its five pension funds will rise by $288.8 million to $7.8 billion in the next budget year, according to preliminary estimates by the retirement systems. The proposed 3.8% increase will add to the State’s budgetary pressures in the year that begins on July 1, 2016. However, the increase is considerably below the prior year’s increase of $682.0 million, or 9.9%, which was mainly due to reductions in the assumed investment rates of return by the three…
Two of the three major rating agencies have cut the State of Illinois’ bond ratings 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 signal a weakened capacity for the government to meet its financial obligations. Both downgrades come on the heels of the announcement by the State Comptroller that due to year-end spending pressures and lower revenues, Illinois would be delaying…
With Illinois operating without a budget for more than three months, concerns have arisen about whether the State is going to run out of money. The simple answer is no—at least not in the way that running out of money is typically understood. Despite the lack of a budget since fiscal year 2016 began on July 1, 2015, money is still going into the State’s checking accounts. However, this revenue can only be used if there are budgetary appropriations or other spending authority. The following…
On September 22, 2015, Mayor Rahm Emanuel released the City of Chicago FY2016 Budget, which includes a nearly $1.3 billion property tax levy, an increase of $427.7 million over the originally adopted FY2015 budget. The property tax levy would be dedicated to the Police and Fire pension funds. In addition, the Mayor has proposed a property tax exemption that would exclude homeowners of homes with a market value of $250,000 or less from the property tax increase. Although representatives from the…
Revenue collected by the State of Illinois from the largest two areas of legal gaming in the State, riverboat casinos and lottery, both declined significantly in fiscal year 2015 while the State’s more recently implemented video gaming continued to grow. However, unlike previous years the gains in video gaming were not enough to offset the losses in the other areas. According to the annual gaming report produced by the Commission on Government Forecasting and Accountability, total revenues from…
On September 9, 2015, the Cook County Board of Commissioners approved the preliminary budget of the County’s public health system for the fiscal year that begins on December 1, 2015 and runs through November 30, 2016. The vote cleared the way for inclusion of the preliminary budget in the County Board President’s overall FY2016 budget recommendation, which is scheduled to be announced in October. In FY2016 the County is expected to reduce its tax support for the Cook County Health and…
The State of Illinois is often cited for its unique financial challenges. However, at least in one respect, Illinois does not stand alone in its financial difficulties. Illinois is one of four states that began the fiscal year without an enacted budget and is one of three still struggling to produce a spending plan in the third month of the fiscal year. As discussed here, although Governor Bruce Rauner signed the education portion of the budget, he vetoed the remaining appropriations bills and…
Even without an annual operating budget, the State of Illinois has already spent billions of dollars for the fiscal year that began on July 1, 2015. What remains unclear is how much the State is obligated to pay out for the entire year and how that compares with estimated FY2016 revenues. The State is obligated to make numerous FY2016 payments due to continuing appropriations and court orders. In addition, although Governor Bruce Rauner vetoed most of the budget passed by the General Assembly…
Although the State of Illinois in entering the second month of its new fiscal year without an operating budget, the Governor and General Assembly have agreed on a capital construction budget for fiscal year 2016. Governor Bruce Rauner issued several line item vetoes to the capital appropriations bill, which primarily reauthorized ongoing spending from the Illinois Jobs Now! program that began in 2010. Following a proposal included in the Governor’s recommended FY2016 capital budget,…
