As public pension liabilities around the nation continue to grow, public officials and pension fund boards are looking into alternatives to traditional defined benefit (DB) pension plans. Two kinds of “hybrid” retirement plans have achieved particular prominence in the past year: plans that combine a smaller DB plan with a supplemental 401(k)-style plan, known as “DB+DC”[1] and cash balance (CB)…
Despite increased revenues from higher income tax rates and a slight improvement in tax receipts due to some economic stabilization, the State of Illinois’ audited financial statements indicate fiscal deterioration continued through the end of FY2011. Increased bonded debt and long-term liabilities due to underfunding of the State’s retirement systems far outpaced growth in capital assets and…
In light of the State of Illinois’ pension funding crisis, it has become more widely understood that the annual Cost of Living Adjustment, or COLA, plays a large role in the State’s overall pension costs. Just how large, however, has been difficult to pin down. As discussed here, detailed information on pension costs and projected savings due to proposed changes was hard to come by during the…
As part of the spring legislative session, the Illinois General Assembly approved a sweeping reform measure intended to add transparency, accountability and competition to the State’s Enterprise Zone Act. The final version of the measure, Senate Bill 3616, passed both chambers of the legislature unopposed on the final day of regular session, May 31, 2012. Earlier in the spring a series of…
State of Illinois officials expect unpaid Medicaid bills to decline to $600 million by the end of the 2013 budget year, but that prediction depends on legislation that has not yet passed the Senate. As discussed here, unpaid Medicaid bills on hand were projected to reach nearly $1.9 billion by the end of the current fiscal year on June 30, 2012, due largely to significant underfunding of the…
The following opinion piece by Civic Federation President Laurence Msall was published by Crain's Chicago Business on June 1, 2012. Yesterday was a most disappointing day in the State of Illinois. Efforts to stabilize the State’s broken pension system dissolved last night amid confusion and acrimony in the Illinois General Assembly. Illinois lawmakers must do better and the recent passage of…
This blog post was updated on June 4, 2012 to reflect corrected information. With just hours to go before a midnight adjournment deadline, the Illinois General Assembly has passed most components of a legislative package designed to eliminate a projected $2.7 billion gap in the Medicaid budget for FY2013. The bills, which are expected to be signed by Governor Pat Quinn, include Medicaid program…
UPDATE: On Thursday, August 2, 2012, Governor Quinn signed legislation to require all counties to release their financial statements within six months of the end of their fiscal year as Public Act 097-0890. The legislation takes effect upon becoming law. On May 11, 2012 the Illinois House of Representatives joined the Illinois Senate in voting to eliminate an exemption for Illinois’ largest and…
The Illinois General Assembly passed legislation to end the Legislative Scholarship Program as of September 1, 2012—allowing lawmakers one more opportunity to award the controversial tuition waivers before they are eliminated. House Bill 3810, as amended by the Senate, was approved by the House on May 21, 2012 by a vote of 79 to 32. In addition to ending the legislative tuition waivers as of this…
With two weeks left to go before the Illinois General Assembly is scheduled to adjourn, two budget plans for FY2013 are on the table: Governor Pat Quinn’s recommended budget and an alternative budget framework approved by the Illinois House. The General Assembly is scheduled to adjourn on May 31, 2012. Bills voted on after that date require three-fifths majority to pass, rather than a simple…
