Of the 41 states with broad-based personal income taxes, Illinois is one of eight with a flat tax rate. The Illinois Constitution requires everyone to pay a single statutory rate, regardless of taxable income. The other 33 states and the federal government have graduated income tax rates, with higher rates applied to higher income levels. Should Illinois amend its constitution to allow graduated…
Amid concerns about renewed political stalemate in Springfield, Illinois Governor Bruce Rauner on February 14, 2018 proposed a budget for the next fiscal year that relies on shifting State pension and health insurance costs to school districts and public employees. The budget recommendation for fiscal year 2019 also requires public universities and community colleges to pick up additional…
After two years without a complete budget but with spending exceeding revenues, Illinois’ backlog of unpaid bills rose to $16.8 billion in November 2017. Now the cost for that payment delay is coming due. Through the first seven months of FY2018, the State spent $337.9 million on interest penalties on overdue bills, according to Civic Federation calculations based on data on the Illinois…
Click here to read the full report. 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 multi-year plan to stabilize Illinois’ finances and balance the State's budget. While Illinois has…
Illinois has grappled with a number of financial challenges over the last decade, including structural deficits, pension underfunding and a two year standoff without a budget. Now, some leaders and advocates have begun to demand renewed attention to how the State funds transportation and other infrastructure. In recent testimony before the Illinois General Assembly House Transportation Committee…
2018 Civic Federation Legislative Priorities The Civic Federation's legislative priorities for 2018 include public employee pension reforms, consolidation of local government units in Illinois, enacting policies to rationalize the property tax system, creation of a Local Government Protection Authority, requiring the State of Illinois to build a…
The following are the five most read blog posts presented by the Institute for Illinois’ Fiscal Sustainability in 2017. These posts discuss issues ranging from Medicaid expansion to the end of Illinois’ historic two-year budget impasse and related legislation. A Review of Medicaid Expansion in Illinois under the Affordable Care Act January 12, 2017 Medicaid expansion was a key feature of the…
After stabilizing due to legislative changes, Illinois’ contributions to its severely underfunded retirement systems are expected to resume their climb in the upcoming budget year. Proposed State contributions to the five pension funds rise by $539.9 million to $8.5 billion in fiscal year 2019, which begins on July 1, 2018. That represents an increase of 6.8% from $7.9 billion in FY2018.…
The financial condition of Illinois’ pension funds improved slightly due to strong investment returns, but they remained critically underfunded at the end of fiscal year 2017. The five State-funded retirement systems had total unfunded liability of $129.1 billion as of June 30, 2017, based on the market value of assets, and a combined funded ratio of 39.8%. That compares with unfunded liability…
When the Illinois General Assembly overrode Governor Rauner’s veto of the FY2018 budget package in July, it estimated that the enacted budget would have an operating surplus of about $360 million. Since the override, Governor Rauner has insisted that the legislature’s budget plan results in a deficit rather than a surplus. This week the Governor’s Office of Management and Budget (GOMB) released…
