* The Fiscal Futures Project at the U of I takes a look at how the state manages the rest of the fiscal year…

THE BOTTOM LINE

Comparing all-funds sustainable revenue for FY15 ($65.6 billion from Table 1) to all-funds spending in FY15 ($69.8 from Table 2), the reference year of FY15 had a structural deficit of $4.2 billion. Projected total sustainable revenue for FY16 (Table 1) is $63.7 billion, but the “benchmark” amount needed to achieve prior year spending levels is $70.3 billion—a deficit of $6.6 billion. An enormous deficit to start was made much worse by the scheduled drop in income tax rates and the scheduled increase in pension payments.

In other words, it will take more than a handshake, a vote and a signature to restore spending in FY16 to FY15 levels. There is a $6.6 billion deficit to deal with. Already over seven months into FY16, it is hard to imagine any new sources of sustainable revenue that could be adopted and cover a gap of this magnitude. That leaves either non-sustainable sources, i.e., some form of borrowing that shifts the burden—with interest—of paying for FY16 spending to Illinois taxpayers in future years or huge cuts to FY16 spending relative to FY15 levels.

The distribution of cuts necessary to get through FY16 across different agencies and programs will be very uneven.

First in line to be paid with the limited resources available are those already paid in the first six months of FY16.

Second in line—and mostly the same group— are those with spending authority from annual FY16 appropriations, continuing appropriations, consent decrees or court orders.

Last in line—and on the chopping block— are those with authority to pay only labor costs. A rough indication of the favored and vulnerable groups is given by the column in Table 2 that shows mid-FY16 spending as a percent of FY15 levels. Agencies with the lowest percentage already paid are, in general, most vulnerable.

The chart…

Discuss.

       

31 Comments - Honeybear - Tuesday, Feb 16, 16 @ 12:55 pm: Man what a bloodletting this is going to be. God help us. - burbanite - Tuesday, Feb 16, 16 @ 12:58 pm: So clearly an educated work force is not a priority in making Illinois Business Friendly. So what is he going to say tomorrow? Does he even have a proposed 16 budget? Remember the pensions have now been ruled on, so he can’t count that money. - Pawn - Tuesday, Feb 16, 16 @ 1:14 pm: Rich, I can’t tell from the linked report — do they include in their accounting the unpaid contracts for which there are no appropriations? The $6.6 billion deficit they cite does not include spending that has been obligated by the governor but that lacks the legal authority to pay. If you run a human service organization with unpaid contracts, this report should be putting ice in your veins right about now. - thechampaignlife - Tuesday, Feb 16, 16 @ 1:16 pm: Hot off the press from the Illinois government playbook: 1. Cut Human Services by 63%. 2. Tout all the waste that has been cut. 3. Restore funding to 80% of pre-cut level the following year. 4. Tout the new funding for critical services. 5. Eviscerate the opposition for the unsustainable 216% growth in just one year. 4. ??? 5. Profit! Thanks, Turnaround! - Mama - Tuesday, Feb 16, 16 @ 1:16 pm: I have a feeling that anyone not willing to trade their pension in for a 401K will be let go. However, I am not sure that would be legal. RNUG? - DHSJim - Tuesday, Feb 16, 16 @ 1:18 pm: Broke on purpose. Illinois has a gdp of $700 billion, yet we’re getting all worried about a $10 billion deficit. Broke on purpose. And it’s the average people who will suffer what they must as they always do. Shameful. - Mama - Tuesday, Feb 16, 16 @ 1:18 pm: Honeybear, hang in there. - RNUG - Tuesday, Feb 16, 16 @ 1:30 pm: == Remember the pensions have now been ruled on, so he can’t count that money. == They’re slow learners and are going to try again with the Sidley-Austin “not yet earned” logic. - Beaner - Tuesday, Feb 16, 16 @ 1:32 pm: So when is the Governor going to request FY16 Vouchers be honored by the Comptroller, even if they are submitted in June 2017? What will be the impact on Illinois Bond ratings when the State Comptroller cannot produce a FY16 CAFR by December 31, 2016? What do Blago and Rauner both have in common? “Fiduciary duty” doesn’t mean a thing to either one. - sparky791 - Tuesday, Feb 16, 16 @ 1:42 pm: -Mama - Tuesday, Feb 16, 16 @ 1:16 pm:- -I have a feeling that anyone not willing to trade their pension in for a 401K will be let go. - Is this a joke? - Honeybear - Tuesday, Feb 16, 16 @ 1:47 pm: Mama, I’m doing well but the folks that see me now daily are not well at all. You know I hate grocery and supply shopping these days. I see so many older workers at Walmart and Homedepot. I know that these folks are hurting and they are the lucky ones to find a job at their age. But buying groceries at Walmart is tough especially on days that I know foodstamp benefits come out. I know it’s bad when the vast majority of folks in Walmart look exactly like the folks in our lobby. They aren’t clothed enough for the weather and not a new coat in the house. Southern Illinois is not looking good at all. At all. - RNUG - Tuesday, Feb 16, 16 @ 1:49 pm: == I have a feeling that anyone not willing to trade their pension in for a 401K will be let go. However, I am not sure that would be legal. RNUG? == -Mama-, While it “depends”, except for the “at will” positions (typically double-exempt, directors, bureau chiefs, etc.), all other state employees have some level of protection from wrongful dismissal. The union protections, for now, are fairly obvious with the existing bumping rules, etc. Doesn’t mean layoffs can’t occur, just that there must be a clear process to it and, for a rational manager, the bumping turmoil / pain usually isn’t worth the possible gain. The “four year appointment” / “Vinson bill” positions (mostly SPSA’s) are automatically “let go” at the END of their 4 year appointment UNLESS they are reappointed by the Governor. So while it takes time, you can legally get rid of all the SPSA’s (and most the institutional knowledge) by just waiting out their terms. In between, SPSA’s have “normal” Civil Service protection against wrongful dismissal. Now should the union contract with it’s protections, etc. no longer be in place, there is still Civil Service rules. Civil Service was in place before the unions. It should also protect against wrongful dismissal. Some people have mentioned age discrimination in terms of possible State layoffs. Because it is the state itself as government employer dealing with their own employees, it is likely the federal age discrimination laws would not apply. There is some precedent for this, but only for states and their direct employees. So you may have to make any age case under the State laws, with the agency making the final ruling being controlled by the Governor. Regardless of how the law reads, I wouldn’t bet on winning that complaint. Finally, with the way this Governor has been operating to date, having said protection on paper may just mean you will eventually win a lawsuit against the State. - 4 percent - Tuesday, Feb 16, 16 @ 1:58 pm: Not sure the chart is relevant unless you differentiate between General Funds and other funds. The EPA for example has very little, if any, GRF and is funded almost exclusively through user fees and federal money. Seems a GRF chart would make more sense. - RNUG - Tuesday, Feb 16, 16 @ 1:59 pm: == Is this a joke? == - sparky791 -, not completely. Some of the pension “reform” proposals being batted around are based on the (to date) discredited Sidley-Austin argument that not yet earned benefits are subject to change. So the plan is to require you to make a choice between your current pension plan with 3% compounded AAI and some less valuable alternative (Tier 2, 401K are possibilities) or not have either (a) the current level of health insurance or (b) not have future raises be part of your pension. Based on the clear SB-1 ruling by the IL SC, such a forced choice is patently unconstitutional but it will probably still be attempted. Rumors, repeat, RUMORS have it that the choice will be coerced (or more coerced that the simple choice that is already coercive). Some people have taken that rumor and extended it to it’s logical conclusion that if you want to fix the pensions, you have to eliminate the workforce earning the pensions. It’s logical but who knows if it is factual? - Anonymous - Tuesday, Feb 16, 16 @ 2:04 pm: 4 percent Same with agriculture - wordslinger - Tuesday, Feb 16, 16 @ 2:06 pm: –Agencies with the lowest percentage already paid are, in general, most vulnerable.– With universities and community colleges at 1% and ISAC at 15%, the governor’s priorities could not be more clear. Still believe this all about the governor’s desire to promote “economic growth?” Show me the economic growth model based on taking a wrecking ball to public higher education. - RNUG - Tuesday, Feb 16, 16 @ 2:08 pm: Back to the subject: the actual chart I went and looked at the full document. The did show Federal revenue on the first page which amounts to $16.7B. But on the page 4 chart breaking things out more or less by agency, they don’t distinguish between federal and state money in the expenditure. You can assume that the federal money is mostly in Health & Family Service, Human Services, and maybe a couple of other agencies … but it would have been nice to see it showing either just state dollars or the federal / state breakdown. - Honeybear - Tuesday, Feb 16, 16 @ 2:28 pm: - Some people have taken that rumor and extended it to it’s logical conclusion that if you want to fix the pensions, you have to eliminate the workforce earning the pensions.- This I believe. I absolutely believe that the governor thinks he can control the waters when he breaks the dam of the workforce. Really? You are going to lose the best workers who most likely will have other options for employment. It’s just sick. Venture capital techniques don’t work in government. - Mama - Tuesday, Feb 16, 16 @ 2:33 pm: RNUG, if you go to each State Agency’s Website, you may be able to find the State and Federal $ breakdown. - Joe M - Tuesday, Feb 16, 16 @ 2:33 pm: From past experience, Rauner will be relying on some of the following to balance next FY’s budget in his upcoming budget address: - public pension diminishment - sweeps (rob peter to pay paul - put he won’t specify who peter and paul are) - cuts in state and state university employee health ins. - a big proposal to consolidate many social services to just a few private entities. - his already proposed 31% cut to higher ed - however, he may even be more aggressive that that now, since the status quo has been a 99% cut. - socking it to state and state university employees any other which way he can. - disguised cuts to local government share as a way to reward them into accepting his turnaround agenda - disguised cuts to K-12 public ed, that really support charter schools, etc. - and a pat on the back to Illinoisans, telling them to be patient. In other words, more of the same. - Mama - Tuesday, Feb 16, 16 @ 2:35 pm: “It’s logical but who knows if it is factual?” We won’t know if it is factual until after it happens. - Mama - Tuesday, Feb 16, 16 @ 2:39 pm: It appears public universities and community colleges may be consolidated and/or forced from a public to a private entity. - RNUG - Tuesday, Feb 16, 16 @ 2:42 pm: == RNUG, if you go to each State Agency’s Website, you may be able to find the State and Federal $ breakdown. == I didn’t want to do that much work. I’ve got other things I’m trying to get done. - DuPage - Tuesday, Feb 16, 16 @ 3:30 pm: I got a spoofed call from “unknown caller” the other day. They were campaigning for a local candidate. One of the things I was told was that she fully supports “the new era of greater accountability” in spending taxpayers money. Sounds kind of Orwellian, I wonder if Rauner will use some similar description for his budget. - Angry Chicagoan - Tuesday, Feb 16, 16 @ 3:33 pm: Mississippi levels of services, with a Minnesota-scale total revenue take, and Washington state levels of regressivity. Given the scale of the crisis that’s really our only option without a constitutional amendment. And it’s a recipe for economic contraction. - Bemused - Tuesday, Feb 16, 16 @ 4:16 pm: Honeybear Just an FYI the folks at Schnucks are Union. Wally World and Rauner share an agenda. - Jack Stephens - Tuesday, Feb 16, 16 @ 4:28 pm: @angry: Funny in Minnesota they cut Government Entitlements for the Top 1% and their state is now growing. In the state just to the East of Minnesota there was a huge expansion of Wealthy Welfare and that state has gone downhill. I think I’d rather follow the Minnesota example. - cailleach - Tuesday, Feb 16, 16 @ 5:00 pm: Rich, if Rauner’s speech tomorrow is as bad as I think it will be, would you consider posting a pic of Oscar to soothe our wounded spirits, please? He does seem to have a calming influence. And if the speech isn’t that bad, Oscar will still be a welcome sight. Thank you. - cailleach - Tuesday, Feb 16, 16 @ 5:02 pm: Jack Stephens +1 - Angry Chicagoan - Tuesday, Feb 16, 16 @ 5:20 pm: @Jack Stephens, I agree, but I said, “without a constitutional amendment.” How do we adopt their system in this political environment? - LoneWolf - Tuesday, Feb 16, 16 @ 7:33 pm: The new state motto of Illinois: “Thank god for Michigan!” At least Rauner hasn’t permitted wide-scale poisoning under his watch. Death by a thousabd cuts is more like it. Sorry, comments for this post are now closed.