The following posts were among the most highly read on the Institute for Illinois’ Fiscal Sustainability’s blog in 2014 and represent the most closely followed Illinois fiscal issues of the year: State pension reform and the State budget. States Face Legal Challenges Over Reduced Pension COLAs January 3, 2014 This blog reviews legal challenges to reductions in state pension COLAs in several states, considering the basis of the lawsuit and the state’s level of constitutional pension…
For anyone who wants to understand the pension crisis facing the State of Illinois, a recent report for the State’s largest pension fund would be a good place to start. The preliminary actuarial valuation report for the Teachers’ Retirement System (TRS) for the fiscal year ended on June 30, 2014 uses relatively plain language and reader-friendly charts to address a complex subject. The report’s new 24-page executive summary describes the pension valuation process and explains how the State’s…
The Civic Federation's legislative priorities for 2015 include public employee pension and retiree healthcare reforms, requiring the State of Illinois to develop and implement a capital improvement plan, establishing a consensus revenue forecast for the State of Illinois, creating a new governing board for the Cook County Forest Preserve District
On a preliminary trip to Springfield after winning the November election, Governor-elect Bruce Rauner held a press conference to draw attention to some of the gimmicks included in the current State budget, including interfund borrowing. Mr. Rauner called the plan to use $650 million borrowed from Special State Funds for FY2015 General Funds operations “fundamentally wrong.” The Governor-elect critiqued the practice, known as interfund borrowing, due to the requirement to pay back the funds…
The Illinois House adjourned on Wednesday, December 3, 2014 with no further session days scheduled before the 99th General Assembly begins in January 2015. The Illinois Senate is expected to adjourn on December 4, 2014 and has one addition session day scheduled for January 13, 2015. This will mark the end of the 98th General Assembly. At the end of each two-year legislative session, all of the bills not passed by both chambers of the General Assembly are cleared from the legislative agenda and…
Shortly after a Sangamon County Circuit Court Judge ruled that the pension reform law passed in Illinois almost a year ago violated the State constitution, Attorney General Lisa Madigan announced she will be seeking an immediate appeal of the decision to the State Supreme Court. Judge John W. Belz issued the Circuit Court’s decision on Friday, November 21, 2014, one day after hearing oral arguments on the case. The short ruling concluded that the changes in Public Act 98-0599 to the…
As the State of Illinois nears its deadline for moving Medicaid recipients into managed care, three managed care organizations have been disciplined for providing poor quality medical care or failing to comply with operational requirements. The Illinois Department of Healthcare and Family Services (HFS) announced on November 14, 2014 that Harmony Health Plan, Family Health Network and Illinois Partnership for Health had been suspended from receiving new Medicaid clients through automatic…
Nearly all indicators point to positive economic growth in the State of Illinois for the fifth consecutive year in 2015 but due to a change in income tax rates, State government finances remain in crisis. In a report issued earlier this month on the results for the first quarter of fiscal year 2015, which began on July 1, 2014, the Illinois Department of Revenue (IDOR) reviewed the State’s economic condition and tax revenue trends dating back to 2010 through September 2015. According to the…
The State of Illinois will need to increase contributions to its pension funds by $682.0 million in the next budget year, according to preliminary amounts released by the State’s five retirement systems. Total pension contributions required by State law are estimated at $7.5 billion in the year that ends on June 30, 2016, up from $6.9 billion in FY2015. The steep increase is mainly due to decisions earlier this year by the three largest funds to reduce their assumed investment rates of…
When the Illinois Jobs Now! capital spending program was approved in 2010 the State also approved a series of dedicated revenue sources intended to fund new borrowing costs outside the State operating budget. As previously sold capital bonds were retired, it was anticipated that the cost for new bond funded capital projects would fall outside the operating budget. However, five years into the capital spending program the FY2015 General Funds debt service costs for capital bonds continue to…
