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A good idea that could cost a pretty penny

Thursday, Apr 27, 2017

* The Illinois Policy Institute on legislative fiscal impact notes

From March 2015 to January 2017, the 99th General Assembly passed 938 bills that were ultimately signed into law; however, only 2.9 percent of the bills contained fiscal notes. A fiscal note essentially acts as a price tag for a bill and contains details about how much the state will pay for a particular law its legislature passes.

Though problematic, this lack of fiscal notes is nothing new for Illinois.

Between 2011 and 2012, less than 3 percent of the 1,173 bills passed by the 97th General Assembly and enacted into law contained fiscal notes. The trend continued into the 98th General Assembly, and in 2013, only 3.4 percent of the bills passed in that year contained fiscal notes.

While not every bill passed relates to fiscal matters, many bills, even those of seemingly little consequence, can have an effect on the state budget. Other laws, which may contain notes pertaining to pensions, land conveyance appraisal and other issues, don’t always have fiscal notes, even though they have a direct or indirect impact on the state’s finances. Illinois’ financial problems are legion, and yet only 27 of the 938 bills passed in the 99th General Assembly have fiscal notes.

The solution is simple: Require every bill to have a fiscal note.

The idea is not uncommon. At least 10 states require every bill to have a fiscal note, according to a report by the National Conference of State Legislatures. But in Illinois, the state’s current fiscal notes law only requires fiscal notes on bills that pertain directly to state revenues or debt impact bills. Despite this requirement, many pieces of legislation that have financial implications do not include fiscal notes.

One example is recent legislation relating to Illinois’ tax credit program, which often benefits large corporations. Senate Bill 513, which would later go on to become Public Act 99-0925, extended the Economic Development for a Growing Economy tax credit program through April 30, 2017, potentially costing taxpayers millions. Yet, the bill did not contain a fiscal note when it was introduced because it did not fall under the narrow criteria set forth by the current fiscal notes requirements. House Bill 2685, now Public Act 99-0238, became law Aug. 3, 2015, and allows the Regional Transportation Authority to borrow over $100 million through bond sales – yet there was no fiscal note. Without real reform, politicians will continue to pass bills that do not tell their true impact on the state’s finances.

Ironically, the most important thing missing from this analysis is a cost estimate. And that might be high. The analysis only reports on the number of bills passed, but about 6,200 bills have been introduced during this spring’s session. The GOMB would have to hire a whole bunch of people to prepare all those notes.

- Posted by Rich Miller        

13 Comments
  1. - L.A. - Thursday, Apr 27, 17 @ 2:44 pm:

    Rep. Tom Demmer has been filing fiscal note requests on anything with a pulse so far this session.


  2. - Anonymous - Thursday, Apr 27, 17 @ 2:45 pm:

    The GA may request a fiscal note whenever they want one. But to require one would give a lot of influence to the executive branch over an essentially legislative function. Imagine the mischief an agency could do if the legislature was required to read their cost estimate into the record.

    No thanks, IPI.


  3. - Michelle Flaherty - Thursday, Apr 27, 17 @ 2:46 pm:

    There’s a potted plant sale outside the Stratton Cafeteria this morning.
    For a moment I mistook it for Demmer and the House Republican caucus.


  4. - Chicago Cynic - Thursday, Apr 27, 17 @ 2:55 pm:

    Great in theory. Waste of money in practice.

    How many times have we seen fiscal notes requested only to get an obviously false “no fiscal impact” response back from GOMB if they were requested on priority items for the Gov.

    Best recent example was the Exelon bill. Fiscal notes were requested and immediately returned “no impact” which was ridiculous on their face. Whether rates went down as proponents claimed or up as opponents claimed, it was going to have an impact on a state that buys millions of dollars of electricity.

    So no, unless they’re going to perform actual honest analysis, this is just a fat waste of resources.


  5. - VanillaMan - Thursday, Apr 27, 17 @ 2:58 pm:

    The intention behind this idea is to hamstring the legislature, little else.


  6. - Anonymous - Thursday, Apr 27, 17 @ 2:59 pm:

    Cynic -

    Exactly correct. Even Batinick was railing against the Exelon fiscal note; as he correctly pointed out, the state of Illinois happens to pay energy bills. So the notion that there was “no fiscal impact” of increased energy prices demonstrates how useless GOMB is when the gov gets involved.


  7. - Chicago Cynic - Thursday, Apr 27, 17 @ 3:07 pm:

    And truthfully Anon259, it points to the difference between an independent agency and an executive branch agency. GOMB does what the gov instructs them too. Sometimes they have more independence but not when it really counts like this.

    It’s like the difference between OMB and CBO on a national scale. OMB just says what the president wants them to say. CBO calls it like they see it. In IL, the role of CBO is filled by outside nonprofits - particularly the Civic Federation. Maybe we can get a CBO for IL?


  8. - Ron Burgundy - Thursday, Apr 27, 17 @ 3:10 pm:

    I’m sort of on the fence on this one, but agree with needing a fiscal note on the fiscal note issue. Yes, they do sometimes slow things down, but some legislators also have a tendency to write whatever they want and place huge demands in money and personnel on agencies without considering if something is doable first or even asking. Would save a lot of trouble if they did.


  9. - Sir Reel - Thursday, Apr 27, 17 @ 3:12 pm:

    While this sounds reasonable, actually doing it is another matter.

    Illinois State government is short staffed, especially the ranks of middle management who would most know how to answer this question.

    I routinely reviewed bills at my former agency and never had the time or ready information to even guess at fiscal impacts. And these were bills involving issues and programs I was familiar with.

    I suspect it’s worse now.


  10. - Juice - Thursday, Apr 27, 17 @ 3:26 pm:

    An easy way to cut back on the amount of work would be to change the law (or adopt a rule) so that the note would only be required prior to final passage.


  11. - Norseman - Thursday, Apr 27, 17 @ 4:36 pm:

    I may be reading this too quickly, but I don’t see where they’re asking for a GOMB provided fiscal note. IPI puts too much import on fiscal notes. Rarely does a fiscal note self-generate opposition. In other words, opposition will already have identified costs as a concern prior to the filing of a fiscal note. The fiscal note process is a hoop to jump through. If the majority wants to avoid the hoop, they do so with impunity.

    I would like to see a requirement that all substantive bills have a written committee report outlining purpose, goals/objectives and costs filed prior to being voted on during 3rd reading.


  12. - Chicagonk - Thursday, Apr 27, 17 @ 4:58 pm:

    A good idea. They also need to track the cost of the unfunded mandates they push on municipalities and school districts. I saw a bill the other day with the “no fiscal impact” tag that would require school districts provide feminine hygiene products to students. Now this is not a bad idea, but just because it will not directly cost the state anything, doesn’t mean it has no fiscal impact.


  13. - PublisServant - Thursday, Apr 27, 17 @ 6:18 pm:

    Oh, well if IPI is for it then … NO! Some things are just that simple.


Sorry, comments for this post are now closed.


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