2. FY14: All Funds Budget
$71 Billion
$3.6 billion of $35
$35 Billion
50%
billion GRF is
attributed to
federal match on
Medicaid
spending.
$8.0 Billion
11%
$27.8 Billion
39.0%
Federal Funds
Other State Funds
General Revenue Funds
3. FY14 General Revenue Funds by Source
$35.5 Billion
Federal Receipts
11%
Personal Income
45%
Other Sources
15%
Personal Income - $16.0B
Sales
21%
Corporate Income - $2.9B
Sales - $7.4B
Corporate Income
8%
Other Sources - $5.1B
Federal Receipts - $4.0B
4. Transfers to
Local
Governments
4.3%
Debt Service on
Capital Bonds
1.7%
FY 2014 Enacted GRF
Discretionary and Non-Discretionary Appropriations
$35 billion
State Employees =
Public Transportation Government Services
1.9%
3.3%
Debt Service on Pension
Bonds
4.7%
Public Safety
and Regulation
4.8%
$4 billion (11%)
Human Services
14.7%
Pensions
16.9%
P- 12
18.9%
Medicaid/Healthcare
23.5%
Higher Ed
5.6%
$ below in millions
Government Services - $1,178
Public Safety and Regulation - $1,692
Human Services - $5,202
P- 12 - $6,687
Higher Ed - $1,991
Medicaid/Healthcare - $8,311
Pensions - $5,988
Debt Service on Pension Bonds - $1,655
Debt Service on Capital Bonds - $527
Public Transportation - $664
Transfers to Local Governments - $1,508
6. Paying Bills
• The budget office
estimates that we will end
the current fiscal year with
$3.5 billion less bills on
hand when compared with
FY12
Unpaid Bills: End of Fiscal Year
($ in Billions)
$10.0
$9.0
$9.1
$8.0
$7.0
$5.6 total
$6.0
$6.1
$2.8
$5.0
•Major reforms to state law
will continue to drive this $4.0
number down in later years
$3.0
$2.8
$2.0
By FY14 half of the unpaid bills
will be less than 60 days old.
$1.0
$0.0
FY12
FY13 est.
FY14 est.
7. Pension Obligation
Bonds Issued in
FY10 and FY11
Cumulative Debt Service Paid
by the End of Each Fiscal Year
($ In Thousands)
$10,000,000
$8,827,541
• For
fiscal years 10 and
11, the state issued $7.166
billion in bonds to make the
required contribution to the
pension systems
$9,000,000
$7,874,648
$8,000,000
$6,870,770
$7,000,000
$5,818,607
$5,036,678
$6,000,000
$5,000,000
• By the end of fiscal year
14, the state will retire $3.8
billion in costs associated
with those bonds
$3,817,370
$4,000,000
$3,000,000
$2,765,815
$1,791,240
$2,000,000 $802,477
$1,000,000
$0
2011
2012
2013
2014
2015
2016
2017
2018
2019
8. Pension Obligation
Bonds Issued in
FY10 and FY11
• Strong performance has
meant a return of nearly
$1.52 billion to the pension
systems, or $806 million
more than the interest costs
FY10 and FY11 POBs
Interest vs. Return
July 1, 2010 through July 1, 2013
$1,600,000,000
$1,400,000,000
Difference = $805.77 million
$1,200,000,000
$1,000,000,000
$800,000,000
•Bonds will retire by FY20
$1,521,163,041
$715,392,200
$600,000,000
$400,000,000
$200,000,000
$0
Interest
Return
9. $20.0
End of Fiscal Year - Bills and Combined Debt Service on
Pension Bonds
($ in Billions)
$7.4 billion in combined debt service
and backlog reduction since FY10
$18.0
$8.8
$16.0
$7.0
$8.0
$14.0
$12.0
$6.1
$10.0
$8.0
$5.0
$9.2
$9.1
$8.0
$6.0
$6.1
$5.6
$4.0
$2.0
$0.0
FY10
FY11
Bills Owed
FY12
Bonds Owed
FY13 est.
FY14 est.
11. Personal Income Tax Rates of Midwestern States
10.00%
9.00%
8.00%
7.00%
Tax Rate
6.00%
Iowa
Wisconsin
5.00%
Missouri
Kentucky
4.00%
Illinois
Indiana
3.00%
Illinois - 2015
2.00%
1.00%
0.00%
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Income (Married Filing Jointly)
*Indiana's tax rate includes an average county tax rate of 1.28%
$300,000
12. Top Corporate Marginal Income Tax Rates of
Midwestern States
14.00%
12.00%
12.00%
Income Tax Rate
10.00%
7.90%
8.00%
6.00%
8.00%
Wisconsin
Indiana
7.00%
6.00%
6.25%
Kentucky
Missouri
4.00%
2.00%
0.00%
Illinois
Iowa
13. FY 2014 Enacted GRF
$35 billion
$ in Millions
Transfers to Local
Governments - $1,508
Debt Service on
Capital Bonds - $527 Public Transportation - $664 4%
2%
1%
State Employees =
$4 billion (11%)
Government Services - $1,178
3%
Public Safety and
Regulation - $1,692
5%
Debt Service on
Pension Bonds - $1,655
5%
Human Services - $5,202
15%
Pensions - $5,988
17%
Human
Services,
P-12, and
Higher
Education
Total
$13.88
billion
P- 12 - $6,687
19%
Medicaid/Healthcare - $8,311
23%
Higher Ed - $1,991
6%
15. GRF Pension Cost as a Percentage of Total General
Funds
Current Law; Assuming No Expiration of Tax Increase
30%
FY 1996 - FY 2046 (Projected)
25%
20%
15%
10%
5%
0%
Notes: All future projections of State pension contributions come from the Retirement System Actuaries.
Only the GRF portion of the regular pension appropriation plus pension bond debt service is shown here.
GRF FY 2013-2016 projections provided by CoGFA's revenue staff; figures for FY 2017 - 2045 used an assumed growth rate of 2.3%.
Approximately 66% of SERS' total annual appropriation is assumed to come from GRF while the rest comes from other State Funds not shown here.
FY 2010 and FY 2011 amount do not reflect the pension bond/note proceeds pursuant to P.A. 96-0043 and P.A. 96-1497.
16. GRF Pension Cost as a Percentage of Total General
Funds
Comparison; Assuming No Expiration of Tax Increase
FY 1996 - FY 2045 (Projected)
30%
25%
Statutory Contributions
SB 2404
SB 1
20%
15%
10%
5%
0%
Notes: All future projections of State pension contributions come from the Retirement System Actuaries.
Only the GRF portion of the regular pension appropriation plus pension bond debt service is shown here.
GRF FY 2013-2016 projections provided by CoGFA's revenue staff; figures for FY 2017 - 2045 used an assumed growth rate of 2.3%.
Approximately 66% of SERS' total annual appropriation is assumed to come from GRF while the rest comes from other State Funds not shown here.
FY 2010 and FY 2011 amount do not reflect the pension bond/note proceeds pursuant to P.A. 96-0043 and P.A. 96-1497.
Projections including transfers pursuant to the PSA were not available for neither GARS nor JRS.
SB 2404 choice: Younger 50% of Actives Elect Choice A, Older 50% of Actives and 100% of Inactives Elect Choice B, Option 2; Retirees: 100% Elect Choice A
The red slice of the pie represents Other State Funds. There are over 700 state funds, or checking accounts. Examples include the Road Fund, which funds road construction and maintenance, and the Medical Disciplinary Fund, which doctors pay into through their license fees and then use to fund the agency that regulates physicians.
Other sources include gaming proceeds and utility taxesFederal receipts are the match we generate on Medicaid spending
The Governor’s introduced budget include a $145 million cut to money the state uses to reimburse school districts for the cost of transporting students
So here is Illinois personal rate at 5%. It is flat, regardless of income level.Now, let’s take a look at: (Illinois 5% rate will appear first, followed by this list)Indiana, which yes, is lower although individual counties can assess an income tax on top of the state rateKentuckyMissouriWisconsinAnd IowaOh and wait, as a reminder, Illinois rate drops to 3.75% on January 1, 2015. That’s law. And THAT puts us lower than Indiana. DatesIndividual Corporate1/1/11-12/31/14 5.0% 7.0%1/1/15 – 12/13/24 3.75% 5.25%1/1/25 – 3.25% 4.8%Illinois’ corporate income tax rate is sometimes listed as 9.5%. That rate includes 2.5% Personal Property Tax Replacement Income Tax collected for local governments. (corporations: 2.5% of federal taxable income; partnerships, trusts, and “S” corporations: 1.5% of federal taxable income)
DatesIndividual Corporate1/1/11-12/31/14 5.0% 7.0%1/1/15 – 12/13/24 3.75% 5.25%1/1/25 – 3.25% 4.8%Illinois’ corporate income tax rate is sometimes listed as 9.5%. That rate includes 2.5% Personal Property Tax Replacement Income Tax collected for local governments. (corporations: 2.5% of federal taxable income; partnerships, trusts, and “S” corporations: 1.5% of federal taxable income)
$5.4 billion dollars lostWhat does that mean in terms of state spending?Well, we can’t cut debt service costs. We already have the lowest ratio of state employees to population in the nation.So let’s look at three major areas of discretionary spending: human services, p-12, and higher educationA $5.4 billion loss is a 39% hit to those budgetsIf we were to spread that proportionally, p-12 would lose $2.6 billion. That’s more than half of the $4.4 billion we will spend on state aid to school districts this year
In FY10 and FY11, TRS and SURS DID receive GRF before bonds were sold and bond proceeds were distributed to the systems. The GRF they received prior to the bond sale was NOT returned to GRF. This is why the 5.1% and 4.8% , respectively, appears.
I’m proud of many of the accomplishments made by Senate Democrats in the last few years. Many of those successes were on issues of vital importance to this region. Here are just a few: We passed a responsible concealed-carry measure. In the wake of a ruling by the U.S. 7th Circuit Court of Appeals that declared the state’s ban on the right to carry unconstitutional, Forby has been collaborating with colleagues from both sides of the aisle to bring Illinois in line with the 49 other states who have some form of concealed carry. We passed fracking legislation. And it goes without saying that Southern Illinois has been known as a resource-rich area with deep coal deposits and an abundance of fertile farm ground. During the spring session, a push has been made by Forby and other local lawmakers to tap what is being called one of the largest natural gas reserves in the Midwest. We are proud of our commitment and fight to keep Tamms open as both an important jobs center for the region and a deterrent within the criminal justice system.