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Illinois state budget (2008-2009)

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State Information

The Illinois state budget is implemented annually for a fiscal term that runs from July 1 to June 31 of the following year.[1] The state budget is drafted by the governor.[2] The governor prepares suggestions for the amount of funds that will be appropriated to each department, provides estimates of the incoming revenue that will be derived from sources other than taxation and estimates the amount of revenue that must be raised through taxes.[2]

Illinois's budget history

As of March 2009, Illinois was expected to face an $11.5 billion shortfall by the end of the fiscal year.[3][4]

The Illinois state government appropriated $86,401,237,988.00 to be spent in fiscal year 2008.[5]

The Illinois state government appropriated $67,693,357,273.26 to be spent in fiscal year 2007.[6]

Fiscal year General funds expenditures  % Change from previous year
1999 $21,527,000,000[7] 9.4%[7]
2000 $22,976,000,000[7] 6.7%[7]
2001 $24,583,000,000[7] 7.0%[7]
2002 $25,125,000,000[7] 2.2%[7]
2003 $24,861,000,000[8] -1.0%[7]
2004 $26,365,000,000[9] 6.0%[9]
2005 $28,247,000,000[10] 7.1%[10]
2006 $28,452,000,000[11] 0.7%[11]
2007 $30,116,000,000[7] 5.8%[7]

Budget status, 2008-2009

Illinois faced an $11.5 billion deficit.[4] In a letter to lawmakers in Springfield, Gov. Pat Quinn referred to the state's financial crisis as a result of a national recession and poor fiscal discipline by previous administrations.[4]

On March 18, 2009, Gov. Quinn gave his State of the Budget address to legislators in Springfield.[3] Quinn stated that the state of Illinois was facing a crisis on two fronts, one surrounding former Governor Rod Blagojevich and the other concerning the looming financial crisis.[3] Amid decreasing revenue and rising unemployment, Quinn presented his budget for 2010, which he stated would cut costs, provide tax relief and create thousands of jobs.[3]

Reasons for the budget crisis

There were several reasons for the budget crisis in Illinois, a deficit which was expected to stand at $11.5 billion by July 1, 2009.[12] The budget already contained a deficit of approximately $2 billion when it was passed, since legislators and Governor Blagojevich could not reach a suitable compromise.

As laid out in the $11.5 billion deficit calculation by Governor Quinn, Illinois’s state spending would increase from $31.487 billion in 2009 to $34.261 billion in 2011, an increase of $2.774 billion or almost 9 percent. Holding spending constant from 2009 would eliminate $2.774 billion from the deficit, leaving a deficit of just $8.832 billion.[13]

Prior attempts at solving the budget crisis

Illinois attempted to handle the budget crisis by delaying payments to vendors. As of November 2008, the payment backlog was $4.2 billion, according to the Comptroller Dan Hynes.[14]

The Illinois Policy Institute recommended "lower taxes, restraint in spending, and working to create a business-friendly environment that empowers entrepreneurs, investors and workers instead of expanding the government’s role in our lives."[15]

The Illinois Policy Institute also suggested the implementation of a comprehensive transparency program that would inject sunlight into the budget process and open up the books in an online searchable database. The site would provide a complete, itemized and clear description of all the state’s expenditures including, but not limited to, all contracts, vendors and grants. In addition, all expenditures would have a detailed account of the payment's purpose and who authorized the payment.[16]

Governor Quinn's proposed reforms

On March 18, 2009, Gov. Quinn gave a State of the Budget address before the Illinois legislature in which he presented his proposal to address the state deficit through a combination of spending cuts, ethics reforms and tax and fee increases.[3] According to the governor's 2010 Executive Budget Overview, the projected $11.6 billion deficit Illinois faced for 2009 and 2010 puts Illinois just behind California and New York for having the largest deficit.[17] If no action was taken, the governor's office expected unemployment in Illinois to reach 9.7% by fiscal year 2010.[17] The governor's office also anticipated a $2.5 billion loss in revenue for 2009, with continuing losses to follow.[17] Without budget reforms and spending cuts, increases in spending for Medicaid, social services and other costs would amount to $34.3 billion in 2010.[17] Citing the national economic crisis, the decreases in revenue and increased spending pressures, Gov. Quinn asserted that spending cuts alone would not suffice to address the dire economic situation but that the following proposals, including tax increases and new investments, were necessary to jump start the state's economy.[17]

Spending cuts and increases

Quinn proposed a $1.3 billion cut in spending that would be accomplished by:

  • ordering state employees to take furloughs of four days;[3]
  • requiring across the board reductions in grant programs; and[3]
  • making targeted cost-reductions at every state agency.[3]

Governor Quinn proposed increasing the fiscal year 2010 budgets of certain departments by $980 million over their 2009 enacted appropriations.[18]

Pension reform

According to Gov. Quinn, Illinois had $55 billion in unfunded pension obligations.[3] In an effort to avoid a further deficit, Quinn proposed restructuring state pensions for new hires.[3][19] This restructuring involved increasing the retirement age for new workers and capping cost-of-living increases that were in line with other public retirement systems.[3] Quinn believed that taking these steps would reduce taxpayers' tax liabilities for the state pension by $162 billion over the next 36 years.[3]

In May 2009, Quinn abandoned his proposal to require public employees to pay 2 percent more of their salaries into their pensions after public employees protested.[20]

Ethics reform

In his first act as governor, Pat Quinn enacted the Illinois Reform Commission.[3][21] The board would examine ethics in state government and make recommendations to continue to keep government open and transparent.[21]

Gov. Quinn also announced the creation of a Taxpayer Action Board that would evaluate all state spending and taxes in an effort to "root out all waste and inefficiency."[3][21]

Transparency reform

On February 25, 2009, Gov. Quinn sent a letter to state agencies stating that requests under the Freedom of Information Act must be considered valid unless the law clearly requires the relevant information remain secret.[22] In his State of the Budget address, Quinn emphasized that his administration was focused on making government more responsive to the people of Illinois.[3] He also stated that "sunshine was the best disinfectant" and referred to his implementation of the Illinois Sunshine Project, which would make Illinois government more open by providing information about government online.[3]

State sales tax holiday

Gov. Quinn proposed a state sales tax holiday effective for 10 days in August 2009 in an effort to give a break to families shopping for back-to-school items such as school supplies, clothing and footwear.[3][21]

The sales tax holiday would be "paid for" by reducing the amount given to retailers to help them process and remit sales taxes back to the state.[23]

Increasing taxes

The Illinois Economic Recovery and Tax Reform Act of 2009 proposed to increase the individual income tax rate from 3% to 4.5% while tripling the amount of income shielded from income taxes for lower income individuals.[19] Even with a higher personal exemption, a single taxpayer making $14,000 would see a tax hike. Couples making more than $28,000 also would have to pay more in taxes, as would families of three earning in excess of $42,000. A family of four making more than $56,000 would pay higher taxes under Governor Quinn's plan.[24]

It would also increase the corporate tax rate from 4.8% to 7.2%.[19] The Tax Foundation reported that Governor Quinn's corporate income tax increase would result in Illinois having the fourth highest combined corporate tax rate in the nation: "Currently, Illinois imposes a 4.8% corporate income tax, plus a 2.5% 'replacement tax' also levied on corporate income. Quinn's plan would raise the 4.8% rate to 7.2%, while retaining the replacement tax, for a total rate of 9.7%."[25]

The Tax Foundation also noted that the plan from Governor Quinn would sharply reduce the ranking of the state's business tax climate, moving it from the top half to the bottom half in the nation when it comes to "business-friendliness."[26]

Tax economist Scott Moody estimated that the long-term loss associated with the personal income tax hike, in present value terms, would cost the Illinois economy $8.6 billion in lost economic output. To put this massive sum into perspective, the hidden cost of Governor Quinn's tax hike was the economic equivalent of taking all the tax revenue for FY 2008, from the sales tax ($7.2 billion), cigarette tax ($350 million), liquor tax ($158 million), inheritance tax ($373 million), corporate franchise tax and fees ($225 million) and insurance taxes and fees ($298 million) and dumping that money into Lake Michigan.[27]

Increasing various taxes and fees

In addition to raising individual and corporate tax rates, the Illinois Economic Recovery and Tax Reform Act of 2009 would include the following measures:

  • doubling the cost of a 4-year driver's license to $20;[19]
  • increasing the $79 cost for license plates by $20;[19]
  • increasing vehicle title fees; and[19]
  • increasing the $0.98 sales tax on cigarettes by $0.50.[19]

Job creation

As of March, 2009, the Illinois unemployment rate was 7.9%.[3] Gov. Quinn proposed the "Illinois Jobs Now" plan, a $26 billion plan through which he hoped to create 340,000 jobs statewide.[3] Highlighted included:

  • $14 billion to build new roads and bridges;[3]
  • $5 billion for improving transportation;[3]
  • $4 billion to repair schools;[3]
  • $2 billion for environmental, energy and technology projects;[3]
  • $1 billion for "economic development efforts;" and[3]
  • a third airport to be built in the suburbs of Chicago.[3]

The plan would be funded through a combination of state and federal funds.[21] Funding for construction of roads and bridges would come from increases in motor vehicle registration fees and driver's license fees.[21]

Increase funding for education

Gov. Quinn's proposed budget would increase funding for early childhood education by $171 million.[3] The proposal also called for $40 million for community colleges and higher education initiatives.[3]

Increase funding for veterans

  • Opening an 80-bed expansion in the LaSalle Veteran's Home; and[3]
  • Allocating $70 million to be used in expanding veterans' healthcare and opening a new 200-bed Chicago veteran's home.[3]

Future deficits

Quinn's proposal did not balance the budget. His plan rolled a $334 million deficit into fiscal year 2011.[28]

State budget website and analysis

See also: State budget websites and analysis

As of May 2009, the Illinois Office of Management and Budget website did not post copies of budget proposals from previous fiscal years. This was unusual, given that many other states' budget offices keep archived copies of past budgets.[29]

Government tools

As of March 2009, Gov. Pat Quinn launched Budget Illinois, which summarized the proposed budget for 2010, offered budget figures and also detailed a capital projects list including information on the recommended and actual appropriations and expenditures going forward.[21]

According to Joe Calomino, Illinois State Director of Americans for Prosperity, Illinois's
"current opaque spending process creates the perception, or possible reality, of legislators or bureaucrats using the state budget to fund unnecessary, wasteful, or even corrupt programs, confident that most Illinoisans will never know about it. Giving taxpayers the tools to understand where and how their money is being spent will make state government more accountable and reduce waste, fraud, and abuse."[30]

"Open Book" is a searchable database of state contracts and campaign contributions that is hosted by the Illinois State Comptroller. Also available from the Comptroller's Office is aggregate expenditure information that can be sorted in a variety of ways. Line-item information is not available.

The following table is helpful in evaluating the level of transparency provided by "Open Book"and the Comptroller's aggregate expenditure website.

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency budgets Public employee salary Exemption level
Open Books
600px-Red x.png
600px-Red x.png
600px-Red x.png
600px-Red x.png
Comptroller's aggregate expenditure website N
600px-Red x.png
600px-Red x.png
600px-Red x.png
600px-Red x.png
600px-Red x.png

Limitations and suggestions for improvements

  • Add copies of the actual contracts to Open Book.
  • Provide line-item spending information on the Comptroller's aggregate expenditure information website.

Support for creation of the database

Kate Campaigne with Illinois Policy Institute wrote a policy brief entitled "Illinois Government Needs An X-Ray Machine." She argued, "educating both the public and legislators about how government spends tax dollars makes it easier to expose corruption and pay-to-play politics. Transparency allows people to connect the dots and see who is asking for money, who authorizes what spending, and who benefits from the funding. Unless government implements transparency and stops the waste, it cannot perform its core functions as well as it could."

Joe Calomino with Americans for Prosperity authored a pro-transparency opinion piece] in The State Journal-Register.

Economic stimulus transparency

  • The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.[31]
  • It was estimated that Illinois would receive at least $6.3 billion in federal funding.[32]

Independent transparency sites

Public employee salary information

See also: Illinois state government salary

See also

External links

Helpful budget links


  1. Center for Budget and Tax Accountability, Citizen's Guide to the Illinois State Budget & Tax System, January, 2008
  2. 2.0 2.1 Illinois General Assembly, 15 ILCS 20/Civil Administrative Code of Illinois, Article 50. State Budget
  3. 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 Office of Governor Pat Quinn, Illinois Budget Address, March 18, 2009 (dead link)
  4. 4.0 4.1 4.2 Chicago Tribune, Quinn making most of his opportunity, March 18, 2009 (dead link)
  5. [http://www.wh1.ioc.state.il.us/Expert/Exp/EESummary.cfm Illinois Comptroller Office, "In-Depth Analysis of Expenditures."
  6. [http://www.wh1.ioc.state.il.us/Expert/Exp/EESummary.cfm Illinois Comptroller Office, "In-Depth Analysis of Expenditures."
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 Executive Summary FY2007
  8. Executive Summary FY2003
  9. 9.0 9.1 Executive Summary FY2004
  10. 10.0 10.1 Executive Summary FY2005
  11. 11.0 11.1 Executive Summary FY2006
  12. Chicago Tribune, FACTCHECK: Quinn pushes tax hike to balance budget, March 18, 2009 (dead link)
  13. [1] Governor Pat Quinn FY2010 Budget PowerPoint Presentation.
  14. St. Louis Business Journal, "Comptroller: Ill. bill backlog now $4.2 billion," November 21, 2008
  15. Illinois Policy Institute, "Illinois Fast Facts."
  16. Illinois Policy Institute, "Operating Without Looking At An X-Ray: Illinois Government Needs An X-Ray Machine."
  17. 17.0 17.1 17.2 17.3 17.4 Fiscal Year 2010 Budget, March 18, 2009
  18. [2] Governor Pat Quinn FY2010 Budget PowerPoint Presentation.
  19. 19.0 19.1 19.2 19.3 19.4 19.5 19.6 Chicago Tribune, What Quinn's Budget May Cost You, March 18, 2009
  20. Illinois Policy Institute (dead link) "Quinn Caves on Pension Reforms; Would He Cave on Tax Hikes?" May 8, 2009.
  21. 21.0 21.1 21.2 21.3 21.4 21.5 21.6 State of Illinois - Budget, March 19, 2009
  22. NBC5 Chicago, Quinn: Follow the FoIA, February 25, 2009
  23. [3] The Pantagraph. "Quinn's plan for sales tax breaks not unique" April 15, 2009
  24. [4] (timed out) "National Review Online," "If Blago Wasn’t Bad Enough" March 26, 2009.
  25. [5] Tax Foundation, "Illinois’s “Business-Friendliness” Ranking Would Decline Sharply Under Governor’s Plan." March 18, 2009
  26. [6] Tax Foundation, "Illinois’s “Business-Friendliness” Ranking Would Decline Sharply Under Governor’s Plan." March 18, 2009
  27. [7] (dead link) Illinois Policy Institute, "The Tax That Keeps on Taking," March 24, 2009.
  28. [8] Governor Pat Quinn FY2010 Budget PowerPoint Presentation.
  29. Illinois Policy Institute, "Where can I find past copies of the Illinois state budget?," May 11, 2009 (dead link)
  30. Helium.com, "Should the salaries of all Illinois state employees be available for public viewing on a Web site, as suggested in a bill in the General Assembly?"
  31. National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
  32. Wall Street Journal, "Stimulus Spending by State"