Capitol Fax.com - Your Illinois News Radar » Civic Federation supports Pritzker’s budget plan, with “significant concerns”
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Civic Federation supports Pritzker’s budget plan, with “significant concerns”

Thursday, May 16, 2019

* Press release…

In a report released today, the Institute for Illinois’ Fiscal Sustainability at the Civic Federation announced its support for Governor Pritzker’s recommended FY2020 budget, because it represents a workable short-term plan to move Illinois forward. The Federation is encouraged by the Governor’s decision to not take a partial pension holiday in FY2020. However, significant concerns persist regarding aggressive revenue assumptions at the core of the proposal and the adequacy of the Governor’s long-term plan to deal with the bill backlog and pension obligations.

The Governor has described his proposed budget as a bridge to financial stability, based on expected implementation of a graduated income tax structure in 2021 and resulting infusion of new revenues. The Civic Federation has continued to express concerns that state and local fiscal conditions are deteriorating at a pace that requires more immediate attention.

“As proposed, the budget represents a relatively rickety financial bridge—though it has been significantly strengthened in recent days,” said Civic Federation President Laurence Msall. “The General Assembly is approaching the deadline to pass several components upon which this budget and the Governor’s long-term plan rely, and revenue projections attached to many of the proposals remain uncertain. Accordingly, we encourage the Governor and General Assembly to develop a comprehensive Plan B that does not involve shorting the State’s pensions or running up the backlog of bills.”

Governor Pritzker presented his first budget, for FY2020, in February 2019. In order to close a projected $3.2 billion deficit, that version relied heavily on a seven-year extension of the State’s statutory pension funding plan. The Civic Federation would have been unable to support that proposal, because it would have further jeopardized the financial condition of Illinois’ severely underfunded retirement systems.

In early May 2019, the Governor announced that his office would no longer pursue the partial pension holiday following a surge in revenues in April 2019 that led to higher revenue projections for the current and upcoming fiscal years. While supporting that decision, the Federation is concerned that April’s strong revenue performance might not be sustainable and therefore continues to recommend a series of steps to further stabilize the State’s operating budget and establish a balanced financial path out of its ongoing fiscal crisis.

The report reinforces many previous Civic Federation recommendations, including limiting net agency spending, consolidating and streamlining units of local government (including pension funds) and restructuring Illinois’ public university system, among others. Further, the Federation cautions against many past bad practices such as relying on accounting gimmicks, reducing or extending the pension funding target and ignoring the financial condition of Illinois’ local governments.

“The State of Illinois is not alone in its financial challenges,” said Msall. “Communities across the State are struggling under the weight of their pension and debt obligations. The Civic Federation calls on the Governor and General Assembly to build on the proposed budget to move more directly and effectively in its assistance to and consolidation of local governments throughout Illinois.”

A summary of the report is here. The full report is here.

* Let’s look at some of the numbers analysis

After accounting for $800 million of unexpected revenue announced in May 2019[2] and the Governor’s cancelation of a plan to extend the pension funding target, the FY2020 budget has an expected surplus of approximately $92 million.

The $39.7 billion revised revenue estimate for FY2020 represents an increase of $858 million, or 2.2%, from $38.8 billion in FY2019.[3] The increase is composed of four factors:

    A forecast of strong economic growth leading to a $366 million increase in existing revenues;
    Policy changes expected to bring in an additional $350 million from existing sources;
    New revenues of $401 million; and
    A shift of $259 million in cigarette tax revenues out of the General Funds.

The total one-time revenue included in the FY2020 budget is $525 million. Of this, $350 million derives from sources new to Illinois: legalized sports wagering and recreational cannabis.
Under the revised proposal General Funds expenditures increase by $287 million, or 0.7%, to $39.6 billion from $39.3 billion in FY2019.

Net agency expenditures increase by $211 million, or 0.8% from FY2019, but this increase excludes Medicaid spending that is shifted to a special account outside of General Funds.

The shift of Medicaid spending includes the cigarette taxes, $65 million from new tobacco-related taxes and $390 million from a new assessment on managed care organizations that goes directly to the other fund, relieving pressure on General Funds.

If the portion of shifted expenditures traditionally associated with General Funds is included, net agency expenditures grow by 2.0% over FY2019.

- Posted by Rich Miller        

8 Comments »
  1. - wordslinger - Thursday, May 16, 19 @ 9:31 am:

    –If the portion of shifted expenditures traditionally associated with General Funds is included, net agency expenditures grow by 2.0% over FY2019.–

    That is the current rate of inflation, on the nose.

    https://tradingeconomics.com/united-states/inflation-cpi


  2. - EV discrimination - Thursday, May 16, 19 @ 9:47 am:

    The $1,000 licensure fee for EVs in HB 3233 is the most insane, irrational, discriminatory language I have seen all session!

    Understandably, EVs don’t pay road tax at the pump, but the legislation fails to acknowledge that vehicle consumption of gas (and therefore the amount of road tax paid) varies by vehicle type.

    Will the state now have a graduated licensure fee for hybrids or vehicles based on MPG ratings?


  3. - Grandson of Man - Thursday, May 16, 19 @ 9:47 am:

    “the Federation is concerned that April’s strong revenue performance might not be sustainable”

    We can’t rely on something that may not happen that much again. We need more-reliable revenue, and just as importantly, we need tax fairness.

    It’s a great idea to use the extra revenue to pay pensions, so kudos to Pritzker for that.

    I respect the Civic Federation’s Laurence Msall. He was on a TV panel, I think Chicago Tonight, with Ralph Martire and Diana Rickert around the height of the budget crisis in 2017. He and Martire appeared to want to get or agree to a budget/revenue. Illinois was about to go into junk status. Rickert said no to a budget/revenue, showing that the IPI is about destructive zealotry and extremism.


  4. - JS Mill - Thursday, May 16, 19 @ 10:22 am:

    =I respect the Civic Federation’s Laurence Msall. He was on a TV panel, I think Chicago Tonight, with Ralph Martire and Diana Rickert around the height of the budget crisis in 2017. He and Martire appeared to want to get or agree to a budget/revenue. Illinois was about to go into junk status. Rickert said no to a budget/revenue, showing that the IPI is about destructive zealotry and extremism.=

    This is a prime example of what we need to be. Good and reasonable people can have different opinions and find a way to come to agreement. That is how government is supposed to work.

    Zealots want what they want and are not interested or are not mature enough to realize that other voices matter too.


  5. - City Zen - Thursday, May 16, 19 @ 10:53 am:

    I suppose this is better than opposing the budget plan with significant indifference.


  6. - Lucky Pierre - Thursday, May 16, 19 @ 11:16 am:

    Good and reasonable people can have different opinions and find a way to come to agreement. That is how government is supposed to work.

    Who do you recommend become the New Speaker of the House?

    The current “reasonable and moderate” Speaker will not come to an agreement on reforming anything except tax hikes


  7. - Demoralized - Thursday, May 16, 19 @ 1:13 pm:

    ==The current “reasonable and moderate” Speaker ==

    Would you come up with a new talking point for crying out loud. You incessant whining became old a long time ago.


  8. - BAP - Thursday, May 16, 19 @ 5:26 pm:

    Why is Pritzker proposing more spending? Any additional tax revenue is needed to shore up the state pension systems.


TrackBack URI

This is not Facebook, so uncivil comments, profanity of any kind, rumors and anonymous commenters will not be tolerated and will likely result in banishment.



* Reader comments closed until Sunday afternoon
* Illinois separatist interviewed on Fox News show
* House's newest freshman ponders tax vote
* Gatehouse cuts jobs to the marrow while spending $100 million on stock
* Leader Brady upbeat on budget talks
* Capital bill roundup
* Cannabis roundup
* House Revenue Committee approves Senate income tax rate bill
* The Credit Union Difference
* Congratulations, Rhiannon!
* Read the Lightfoot tea leaves
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* *** LIVE COVERAGE ***
* *** UPDATED x1 - Pulled *** Rate the new FanDuel/DraftKings TV ad
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............

...............


Loading


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller