THE ILLINOIS STATE BUDGET FY18 Presentation to the Chicago Jobs - - PowerPoint PPT Presentation

THE ILLINOIS STATE BUDGET – FY18

Presentation to the Chicago Jobs Council Mitch Lifson Senior Policy Analyst Voices for Illinois Children

WLS-TV

August 9, 2017

THE MONEY…..

Prior to Revenue Bill Passage: Government Forecasting and Accountability Commission (COGFA) From March 2017 estimated FY18 general revenues at $32.4 billion dollars –which included, transfers in from other state funds, anticipated federal funds, and $300 million from the sale of the James R. Thompson Center. FY17 saw relatively weak revenue performance with the state taking in approximately $800 million less in GRF than expected. As of this July, with no changes from the adopted state budget and tax package. The state would have been looking at an FY18 revenue forecast of $31 billion. (COGFA)

SB 9 –The revenue bill:

Total Impact [rate increases, changes in credits and deductions, sale of the JRTC] Approximately $5.5 billion (COGFA)

• Increases the Individual Income Tax Rate from 3.75% to 4.95%

(new revenue ~ $4.9 billion)

• Increases the Corporate Income Tax Rate from 5.25% to 7%

(new revenue ~ $678 million) Retroactive to July 1, 2017

CREDITS

• Means Testing

Prohibits a taxpayer with an adjusted gross income of more than $250,000 (or $500,000 for spouses filing a joint federal return) from claiming: Standard Exemption, Property Tax Credit, Education Expense Credit.

• Earned Income Tax Credit

Increases the state’s Earned Income Tax Credit from 10% of the federal EITC to 14% in tax year 2017 and then to 18 percent in tax year 2018.

• Education Expense Credit

Increases the maximum amount from $500 to $750.

• Classroom Expense Credit

Creates a new tax credit of up to $250 for teachers who use personal income on instructional materials and supplies

CORPORATE TAX CREDITS

• Ends Qualified Production Activities Deduction (for state tax purposes)

The federal government allows the deduction for certain production activities within the U.S. By not adding back the amount in calculating state taxes, the Illinois taxpayers could be subsidizing economic activity in another state.

• Includes Continental Shelf Activity

Includes, for state tax purposes, income derived from oil drilling and other natural resource exploration activity along the U.S. continental shelf.

• Combined Reporting

Requires related businesses who currently file separately because of different rules for apportioning income to file a return as one group.

OTHER MEASURES:

• Restores Research and Development Credit
• Eliminates current sales tax exemption on

20% of gasohol sales

• Includes graphic arts machinery and

equipment into the general sales tax exemption for manufacturing and assembly machinery Changes regarding tax liens and unclaimed property

Revenue bottom line after factoring in rate increases and tax credit/deduction changes (including some changes to expected transfer rates)

$36.4 billion

 Approximately $1.4 billion via pension

changes including the creation of a Tier III retirement plan

 Ten percent cut to higher education  Five percent cut to government operations

–largely agency administration

 Ten percent reduction in GRF transfers to

local government distributive fund and public transit funds

 Road fund picks up portion of GRF for debt

service on transportation related items

SB 6 –The Budget Bill $36.1 billion

The cuts: Approximately $3 billion, including:

SB 6 increases early childhood education funding by $50 million in FY 18.

Illinois received a grant from the federal government in 2015 for pre-school expansion. A condition of the grant is that the state must increase early childhood funding by $50 million each fiscal year for five years.

EARLY CHILDHOOD EDUCATION

CPS

State Aid (rolls in 4 prior categoricals): $6.7 billion Ties GSA to “Evidence-Based Funding” model (in SB 1, which is still on hold in the Senate after approval) Because of the language Illinois State Board of Education has no legal direction on how to disperse the $6.7 billion without an evidence-based model in place.

K-12

Without these funds, schools will have a difficult time either opening on time or staying open for the duration of the school year .

State Aid (rolls in 4 prior categoricals): $6.7 billion Under AV:

• Calculates a school district’s hold-harmless at the per-pupil level

beginning in the 2020-2021 school year using average student enrollment.

• Takes the $203 million Chicago Public Schools (CPS) receive as a block-

grant and distributes the funds throughout the rest of the state.

• Moves the CPS pension pick-up ($221 million) to the pension code.
• Removes the adjustments for PTELL and TIF districts from the determination
• f local capacity

K-12

Amendatory Veto

HIGHER EDUCATION

FY 18 % change from FY 15

Chicago State University

$32,697,400

• 10.0%

Eastern Illinois University

$38,678,100

• 10.0%

Governors State University

$21,656,000

• 10.0%

Illinois State University

$65,004,000

• 10.0%

Northeastern Illinois University

$33,209,000

• 10.0%

Northern Illinois University

$81,983,500

• 10.0%

Southern Illinois University

$180,912,800

• 9.3%

University of Illinois

$583,005,900

• 9.9%

Western Illinois University

$46,300,700

• 10.0%

Community Colleges

$248,030,500

• 10.0%

Agency Name Appropriation Name Fund Name Fund Category Name SB 6-FY 17 SB 7 -FY18 Illinois Student Assistance Commission Monetary Award Program (MAP) General Revenue Fund General Funds 77,856,300 401,341,900 Illinois Student Assistance Commission Monetary Award Program (MAP) General Revenue Fund General Funds Illinois Student Assistance Commission Monetary Award Program (MAP) Education Assistance Fund General Funds 287,000,000 Illinois Student Assistance Commission Monetary Award Program (MAP) Fund for the Advancement of Education General Funds

Funding for the Monetary Award Program (MAP grants)

From Illinois Student Assistance Commission Website on FY17 grants:

“ISAC is working to ensure that FY17 MAP claims are paid as quickly as

• possible. Particularly if you are a student who paid the costs your MAP grant was

meant to cover during the 2016-17 school year, it’s important to note that individual colleges handled the delay in MAP funding for FY17 in different ways and individual circumstances may vary.”

• Autism Diagnosis Education Program for Individuals
• Best Buddies
• ARC of Illinois Life Span Project
• Epilepsy Services
• Teen Parents Services
• Westside Health Authority Crisis Intervention
• Teen REACH After-School Programs
• Homeless Prevention

HUMAN SERVICES

• Funeral and Burial Services
• Welcoming Centers
• Immigrant Integration Centers
• Community Services
• Children’s Place
• Emergency Food Program
• Youth Jobs Program

Items zeroed out in Governor’s proposed budget that are funded in SB 6:

HUMAN SERVICES

Child Care: Funding restoration for child care assistance to:

• Families earning between 162 and 185% of

the federal poverty level

• Parents enrolled full-time in non-TANF

(Temporary Assistance for Needy Families) education or training program FY17 funding for domestic violence shelters and increases the appropriation for FY18. HB 3213 restores access for families enrolled full-time in non- TANF education and training programs by amending state statute to add them to priority populations – passed both chambers and awaiting action from Governor.

RATE INCREASES

• Home Service Program providers

$0.48/hr increase

• Organizations providing community-based services

for persons with developmental disabilities $0.75/hr increase

• Community Care Program Providers (Dept. on Aging)

$0.72/hr increase

• Mental Health Providers, Drug and Substance Abuse Providers

3% increase

• Supportive Living Facilities

2.8% increase

• Specialized Mental Health Rehabilitation Facilities

2.8% increase

Community Care Program Illinois.gov

• Fully funds the Community Care Program

Within SB 42: Establishes a Community Care Program Services Task Force to review community care programs for seniors and was to reduce costs with out diminishing care levels. The Task force is to report back no later than January 30, 2018.

AGING

Meals on Wheels has a $10 million GRF increase from FY15 to FY18.

Meals on Wheels –Macon County

Approved state budget includes $5.6 million in general revenue funds for the cost of Breast and Cervical Cancer Screening in FY17 (There was $5 million in the stopgap budget from the Commitment to Human Services Fund.) and $13.5 million in FY18.

PUBLIC HEALTH

Appropriation Name Fund Name Fund Category Name FY15 Enacted Approp FY15 Actual Expenditure SB 6 -FY17 SB 6 - FY18 Grants HIV/AIDS Quality of Life Programs and Expenses of HIV/AIDS Prevention and Education Quality of Life Endowment Fund Special State Funds 2,400,000 1,396,662 1,500,000 Expenses of AIDS/HIV Education, Services, Prescription Drugs, CTRPN and Patient and Worker Notification General Revenue Fund General Funds 25,415,000 13,484,566 14,688,200 25,415,000 Expenses of AIDS/HIV Education, Services, Prescription Drugs, CTRPN and Patient and Worker Notification Commitment to Human Services Fund General Funds Grants for prevention and treatment of HIV/AIDS and creation of service delivery system to reduce the disparity of HIV infection and AIDS cases between African-Americans and other populaton groups. General Revenue Fund 975,000 1,218,000

Funding for AIDS/HIV Education and Treatment Restored to FY15 Level

For fiscal year 2018, transfers among line item appropriations to a State agency from the same State treasury fund may be made for

• perational or lump sum expenses only,

provided that the sum of such transfers for a State agency in State fiscal year 2018 shall not exceed 4% of the aggregate amount appropriated to that State agency for

• perational or lump sum expenses for State

fiscal year 2018.

4% transfers Flexibility within agencies…[SB 42]

For FY 18 “the Governor may designate, by written notice to the Comptroller, a reserve of not more than 5% from the amounts appropriated from funds held by the Treasurer for State fiscal year 2018 to any State agency.” However, the Governor may not reserve funds from amounts that: (i) have been appropriated for payment of debt service, (ii) have been appropriated under a statutory continuing appropriation, (iii) are State general funds, (iv) are in the Supplemental Low-Income Energy Assistance Fund, or (v) are funds received from federal sources.

5% reserve Governor’s Authority to set aside funds…[SB 42]

SB 42 [Budget Implementation Bill]

• Authorizes $6 billion in bonds

(payable in 12 years) to pay vouchers incurred before July 1, 2017.

• Authorizes transfers during FY18 of

nearly $293 million from special funds, including:

Energy Efficiency Trust Fund .......……..$7.6 million Illinois Affordable Housing Trust Fund ….$5 million Statewide 9-1-1 Fund ............................$5.9 million

• Authorizes on and after July 1, 2017

and through December 31, 2018, special fund transfers of up to $1.2 billion to be repaid to the respective funds within 24 months.

THE BILLS………

$14.5 billion as of 8/7/17

“This budget will not solve all our problems to tomo morrow

• w.

. We e haven’t won the lottery. We lost it and haven’t even gotten it bac ack yet

• et. The

e tr truth th is, it t wi will ta take e us y yea ears to to pay off th the e $1 $15 5 billion……” Illinois Comptroller Susana Mendoza

Pension liability: $130 billion

Public Act 88-0593 requires total assets of the state retirement systems to equal 90% of their total actuarial liabilities by Fiscal Year 2045.

COGFA

For more information, contact: Mitch Lifson Senior Policy Analyst Voices for Illinois Children phone: 312-516-5557 e-mail: mlifson@voices4kids.org Voices for Illinois Children 208 South LaSalle St., Suite 1490 Chicago, IL 60604

www.voices4kids.org

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