The Illinois House of Representatives took a significant step in its annual budget negotiations this week when legislators unanimously passed a resolution limiting General Funds spending to $33.2 billion. The cap on spending is tied to the total estimated revenues for FY2012 set by the House Revenue Committee and is significantly lower than the $36.8 billion annual spending limit included in the legislation passed in January 2011, which raised the State’s income tax rates. House…
For the second year in a row, the State of Illinois raised funds in the municipal bond market to make its annual pension contributions. On February 23, 2011, the State finalized the sale of $3.7 billion worth of Pension Obligation Bonds (POB) for FY2011. Similar to its FY2010 POB sale, Illinois’ bonds that sold last week were also oversubscribed, meaning more orders were placed for the bonds than the available supply. The State’s bond underwriters received $6.1 billion in orders for the…
In order to pay income tax refunds owed to taxpayers, the State of Illinois sets aside a percentage of income tax receipts received throughout the year and deposits them into a special fund. Different percentages apply to individuals and businesses, but all refunds are paid from the same fund—the Income Tax Refund Fund. These percentages are known as Refund Fund rates. The higher the Refund Fund rates, the more money deposited into the fund and the less revenue available for the State’s…
Governor Pat Quinn’s proposed FY2012 budget for the State of Illinois features additional borrowing and an overall increase in spending, despite steep spending reductions in the area of human services. The Governor’s FY2012 budget, issued on February 16, 2011, includes total operating resources of $33.9 million and total expenditures of $35.4 billion. In order to close the operating shortfall, the Governor’s plan uses $1.45 billion of the proceeds from a proposed $8.75 billion borrowing in…
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 and actionable recommendations for the Governor and General Assembly for the coming fiscal year. This year the State of Illinois Budget Roadmap also includes an analysis and recommendations based on Governor Pat Quinn’s preliminary budget plans for FY2011 and three-year budget plan published…
Illinois’ budgetary woes put it in the company of states such as California and Nevada that are suffering major economic consequences due to unsound fiscal policies and the current economic climate. However, other states, including those known for better fiscal management, are being forced to make tough choices to reconcile their budgets. The state of Texas, whose economic condition was described in a recent Pew Center on the States’ report as least similar to California’s, is facing a major…
The State of Illinois is anticipating a large increase in revenues from income tax rate increases approved in January and additional resources from borrowing to make its pension payment for the second year in a row. Even so, the Governor and General Assembly are considering borrowing billions more before the end of the fiscal year. The massive borrowing plan was introduced in the prior legislative session as Senate Bill 336 and has been reintroduced as Senate Bill 3 in the new 97th General…
In discussions of the State of Illinois’ budget, no issue is more contentious—or more confusing—than recent spending trends. Simply stated, is Illinois spending more or less than it was two years ago? As previously indicated on this blog, the answer depends on what is meant by spending. According to preliminary information (available at MuniOs.com) provided by the State on January 21, 2011 in connection with an upcoming bond sale, General Funds appropriations are projected to decline by $1.2…
The Institute for Illinois’ Fiscal Sustainability at the Civic Federation recently described how some State of Illinois pension bond proceeds could be transferred to the State’s General Funds and used for other operating purposes. The final legislation authorizing the state to borrow money in order to make its FY2011 pension contribution may open the door for the state to transfer some of the loan proceeds from the pension funds into the State’s General Funds. The transfer would be made if the…
In addition to the tax increase and spending limits bill approved in the last hours of the 96th Illinois General Assembly, the legislature authorized a new round of pension borrowing with provisions that could lead to hundreds of millions in bond proceeds being transferred to the State’s General Funds and used for operations. Almost a year after the Governor proposed borrowing to make the State’s required FY2011 pension payment, the General Assembly passed a pension-borrowing bill on…
