In a report released today, the Civic Federation’s Institute for Illinois’ Fiscal Sustainability proposes a comprehensive plan for achieving long-term fiscal sustainability for the State of Illinois. The five-year plan would fully pay down the State’s $5.4 billion backlog of unpaid bills while gradually reducing income tax rates by 20%, broadening the tax base and building a reserve fund as protection against future economic downturns. The full 47-page report is available here. “This…
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. The report reviews Governor Quinn’s three-year budget projection and proposes a comprehensive five-year plan for achieving long-term fiscal sustainability for the State of Illinois. The Civic Federation’s plan would fully pay down the State’s $5.4 billion backlog of unpaid bills while…
The Illinois House of Representatives has approved a revenue projection for the coming fiscal year that includes a $2.2 billion loss in operating resources for FY2015, after a holding series of committee meetings to deliberate varying estimates. The General Funds revenue estimate totaling $34.5 billion was unanimously approved on February 25, 2014 in House Joint Resolution 80. The revenue projection represents a 6.1% drop from the current FY2014 estimate of $36.7 billion by the Illinois…
This week, Chicago Public Schools released its FY2013 Comprehensive Annual Financial Report for July 1, 2012 to June 30, 2013. In it, the District reports a year-end FY2013 deficit of $119 million that was closed using fund balance. This is smaller than the $273 million deficit that was anticipated when the District released its FY2014 budget. One of the main drivers behind the positive variance was also the cause of a significant increase in fund balance last year: the District received…
This article discusses a Standard & Poor’s Rating Services report released February 27 that disputed comparisons between Chicago and Detroit, concluding Chicago has the ability to make the changes necessary to avoid bankruptcy. The Civic Federation said the report is another reminder that Illinois lawmakers need to pass pension reform for Chicago in order for the city to start making fiscal progress.
It is widely known that the State of Illinois faces a dramatic reduction in general operating revenue starting on January 1, 2015, when temporary income tax rate increases enacted in 2011 are scheduled to partially roll back. General Funds income tax receipts will also decline around the same time for another reason: beginning on February 1, 2015, a portion of individual income tax collections will be diverted from General Funds to fund education and human services. This revenue will not be…
This article examines Chicago’s growing debt load due to unfunded pension liabilities and ongoing borrowing. The Civic Federation said Chicago’s level of debt is unsustainable and the City is short on time to find a solution. The article cites the Civic Federation’s Status of Local Pensions and Financial Indicators reports, which respectively highlight the declining health of the City’s pension funds and Chicago’s fiscal performance relative to other cities.
At a recent committee hearing, Illinois lawmakers were provided with a mixed message regarding the economy and State budget for the coming fiscal year. Officials from the Illinois Department of Revenue explained that although the State could expect improved underlying economic growth in the next two years, operating resources would still plummet in the next year due to current tax policy. Many of the key indicators the Revenue Department uses as the basis for its General Funds revenue…
This week the Chicago City Council granted the City authority to issue $900.0 million in general obligation bonds and $1.0 billion in Midway Airport revenue bonds. At the Finance Committee meeting on February 3, 2014, the City’s Chief Financial Officer Lois Scott said that approximately $90.0-$100.0 million of the GO bonds would be used to pay for litigation settlements from last year. About $130.0 million would be used to restructure debt by delaying principal payments for ten years, a…
This article discusses a proposed ordinance for the City of Chicago to issue up to $900 million in general obligation bonds, with over $100 million used to push upcoming debt payments into the future. The Civic Federation said this practice, known as “scoop and toss,” increases the total cost of borrowing and the burden to taxpayers. The practice is prohibited under State law, but remains an option for municipalities. The ordinance passed the City Council’s Finance Committee on February 3 and…
