With Illinois’ new fiscal year beginning July 1, Governor Pat Quinn
signed the bulk of the state budget into law on the last day of June.
The budget does not include an extension of
the 67% tax hike pushed by Governor Quinn throughout the legislative session. Although
the Governor and his allies had painted a picture of draconian, and possibly
dangerous, cuts if the tax hike was allowed to expire as promised, the
Legislature adjourned May 31 without extending the tax hike.
However, the Governor and his legislative
allies did not abandon a vote on the tax hike extension, but simply deferred it
until after the fall elections.
While taxpayers can breathe at least a
temporary sigh of relief, the budget signed by Governor Quinn defers decisions, rather
than forces the state to live within its means. It is patched together using a
variety of short-term fixes, fund transfers and other gimmicks.
tosses health insurance changes
In a decision that is likely to impact
pension reforms adopted in 2013, the Illinois
Supreme Court reversed a lower court ruling on changes in
the state’s health insurance benefits for retirees.
In a 6-1 ruling on July 3, the state’s high
court said state health insurance benefits for retirees are protected by the
Illinois Constitution’s pension protection clause. Although the ruling focused
on a July 2012 law that reduced health insurance benefits for retired state
employees, the court’s finding was widely viewed as providing a clear signal on
whether or not pension changes approved in December 2013 would be held
Those pension changes are currently under
review by a lower court, but the case was expected to be ultimately decided by
the state supreme court. The ruling in the health insurance case is likely to
be used as guidance by the judge deciding the pension case.
A central issue is a provision in the
Illinois constitution which states that pension benefits are “an enforceable
contractual relationship, the benefits of which shall not be diminished or
The FY15 budget is based on a revenue
estimate of $35.352 billion and total General Revenue Funds spending is
approximately $35.4 billion.
It relies on $650 million in inter-fund
borrowing (fund sweeps), $167 million in natural growth over original
estimates, and another $40 million in hospital assessments.
A detailed analysis of the Fiscal Year 15
Budget can be found online in the Senate Republican Caucus document “At
a Glance – An Overview of the 2014 Spring Session.” The
publication can be found on the Senate Republican Web site by clicking
on either the “Senate Action” or the “At a Glance (2014 Session Summary) links.
The budget continues the pro-ration of the
state’s General State Aid Formula’s foundation level grants for schools,
granting schools just 89% of the foundation level.
In fact, since Pat Quinn became Governor,
education funding for the state’s elementary and secondary schools has fallen
by $621 million (FY 09 – FY 14).
In May, Republican lawmakers pushed for a
change in the state’s school funding allocation. We argued that the state
should guarantee the foundation level grant (that is meant to provide a base
level of support for all students) be funded at 100% first, before other
special purpose allocations are made.
The Governor’s sole cut in the budget was the
elimination of a $250 million re-appropriation for Capitol building renovation
and restoration. Critics pointed out that the cut was not real, as the money was
not going to be spent in the coming year anyway.
Governor Quinn left untouched all other earmarks,
shell games and fund diversions.
The Governor left intact his failed, but now
re-branded and reshuffled, Neighborhood Recovery Initiative, which has been
shipped over to the Department of Labor and given a new, yet to be determined,
He didn’t touch several undefined earmarks
that were put into the State Board of Education budget. And he continued to
approve taxpayer dollars for a teacher education initiative that has produced
only a handful of teachers at a per-teacher cost that exceeds the tuition costs
at Ivy League schools.
Bills signed into law
measures were also signed into law during the week. Click here for a list of those bills.