Illinois state budget
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week6class626.docx63679636796FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
THE STATE’S GREAT CHALLENGE
Structural Deficit & Great Recession
Illinois faces a fiscal crisis. The worldwide Great
Recession and the state’s structural deficit have
combined to create unprecedented obstacles for
our elected officials and citizens. In fiscal year
2010, many attempts to address problems—
such as pension and tax reform—fell short,
increasing the severity of the structural deficit
and delaying tough decisions that will affect our
state for decades. For fiscal year 2011, we must
do better.
Around the globe, the Great Recession has taken
a toll on even the most robust economies. This
recession is unlike those previously seen, and its
end has yet to be written.
Every state in our country is still reeling from
the foreclosure crisis and de-leveraging of the
banking industry. Though big business profits
improved in calendar year 2009, success on
corporate balance sheets was not paired with
success in citizens’ pocketbooks. As our nation
wades through this jobless recovery, the Illinois
unemployment rate, 11.3 percent as of January
31, 2010, exceeds the national average and is
nearly three percentage points
higher than the previous year. While national
and state economic development programs are
creating jobs and opportunities, recovery is slow
and currently not sufficient to create the number
of jobs our nation demands.
The Revenue Problem
Meeting the Great Recession is Illinois’ structural
deficit—a situation wherein the state’s
expenditures consistently exceed revenues.
With historically high unemployment, the state’s
revenues have suffered. Individual income tax
revenue is down 4 percent from the previous
year, as of February 28, 2010; sales tax is down
5 percent. In the past two fiscal years, the big
three tax categories (individual income,
corporate income and sales) have declined 14
percent.
These significant revenue declines come at a
time when state resources are being squeezed
by increasing costs, with pensions, human
services, health care, and education
expenditures leading the way and accounting for
about 90 percent of the annual budget. Pension
reform and difficult choices regarding human
service programs, healthcare eligibility and the
P-12 and higher educational systems are
required to reign in these expenditures.
GENERAL FUND REVENUES
FY2008 - FY2011
(in $ millions)
$29,659
$29,144
$27,995
$27,444
$26,000
$26,500
$27,000
$27,500
$28,000
$28,500
$29,000
$29,500
$30,000
FY2008 FY2009 FY2010 (Est.) FY11 (Budget)
THE REVENUE PROBLEM
FY2011 Revenues are forecasted to be
over $2 billion less than FY2008,
despite almost a half billion in Federal
Stimulus dollars in FY2011
Source: Governor's Office
of Management & Budget
Executive Budget for Fiscal Year 2011 Chapter 2 - 1
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
The Pension Problem
While revenues have declined approximately $2
billion in the last three years, pension costs have
increased over $2 billion. Without stabilization,
the problem will only compound in years to
come.
The Governor’s proposal to stabilize the statefunded
public retirement systems would provide
public employees with a fair and secure
retirement, while moderating the fiscal burden
on the state by reducing longer-term pension
obligations by more than $100 billion through
2045. Such stabilization, which calls for
changes that would affect newly-hired, mostly
young employees, would alleviate current and
future burdens of a system that has been
underfunded for decades.
GENERAL FUND
PENSION CONTRIBUTIONS GROWTH *
FY2000-FY2011
(in $millions)
$1,131 $1,238 $1,339
$1,470
$2,111
$1,939
$1,230
$1,614
$2,249
$2,924
$4,052
$4,357
$4,624
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 ** FY2011 FY2011
(Stabilzation)
* FY2003-FY2011 includes debt service on FY2003 Pension Obligation Bonds
** FY2010 General Fund Pension Contribution was largely financed by issuance of $3,466 million in Pension Obligation Notes
THE PENSION PROBLEM
Required Pension contributions
have increased by over 300%
since FY2000
Source: Governor's Office
of Management & Budget
Executive Budget for Fiscal Year 2011 Chapter 2 - 2
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
THE FIVE PILLARS OF FISCAL RECOVERY
Given the revenue and pension problems, and
the obligations the state has to provide for its
citizens, Illinois cannot cut its way out of this
deficit. Rather, a multi-faceted fiscal strategy
must be pursued. The Five Pillars of Fiscal
Recovery, utilized together, can provide muchneeded
fiscal relief now, while protecting myriad
important programs and services. The Five
Pillars can also set Illinois on a path of fiscal and
economic recovery and long-term sustainability.
Request continued FEDERAL ASSISTANCE
through the recession
The federal government’s stimulus plan brought
billions of dollars to Illinois and funded vital
services like education and health care. As
federal stimulus dollars are exhausted over the
next fiscal year, decreased federal assistance
will have serious consequences in Illinois.
Reduced federal funds will result in fewer
teachers and overcrowded classrooms.
Children’s health care coverage and prescription
drug coverage for seniors will be jeopardized,
and businesses throughout Illinois may be
forced to close down. Governor Quinn is
committed to working with the President and
members of Illinois’ Congressional delegation in
support of continued federal assistance.
Use short-, intermediate- and long-term
BORROWING
The budget presented herein contains an
increase in structured borrowing. Balancing the
budget on the backs of our providers—many of
which are small businesses, vital to the future of
our economy—is one form of borrowing, and for
some elected officials, has been the easy way
out. But it is a form of borrowing that requires
little action. It is passive borrowing. And at 1
percent per month, it is also expensive
borrowing. Elected officials must explore other
means of financing our state’s obligations, until
such time as new and growing revenue can
match leaner spending.
Some combination of short-, intermediate- and
long-term borrowing—including borrowing from
a rainy-day fund of the state’s own money—
would provide the state with the flexibility to
address many current needs while maintaining a
long-term focus. But until Illinois addresses its
structural deficit—and takes on the fundamental
challenges threatening the budget and the
state—its bond ratings will continue to suffer.
Future ratings downgrades could be quite
costly, and are likely if no corrective actions are
taken.
Continue to CUT SPENDING
In Fiscal Year 2010, Governor Quinn oversaw
reductions in leased office space, declines in
travel reimbursements, cuts to select programs
across many agencies, and decreases in the
government’s workforce, with headcount down
over 1,000 since he took office.
For fiscal year 2011, the belt-tightening will
continue, and the cuts will be deep. Such
decisions do not come without bold conviction
and fierce resolve, but they will be necessary to
return our state’s finances to a firm footing.
Nearly every area of government and our state
will be affected by fiscal year 2011 cuts,
including:
• Education
• Local governments
• Human services
• Health care
• State police
• Government operations
Adopt REVENUE ENHANCEMENTS
Even with continued federal assistance,
borrowing and reduced spending, the state is
still faced with a shortfall of several billion
dollars. Illinois’ current tax structure can no
Department of Central Management Services
Bureau of Property Management
Lease Consolidation Savings
Time
Period
through
3/4/10
Number
of Lease
Terminations
Lease Cost
Savings
Square
Footage
Savings
FY10 52 $11,466,061 661,106
<1/29/09* 59 $12,997,090 742,239
*The date Governor Quinn took office
Executive Budget for Fiscal Year 2011 Chapter 2 - 3
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
longer finance the state’s fundamental needs.
Illinois’ income tax rate is the lowest (among
those with an income tax) of any state in the
country, and it relies heavily on taxing working
families. Revenue enhancements would enable
the state to continue investing in education,
healthcare, human services and public safety.
Promote JOB GROWTH
The future success of Illinois depends on a
strong fiscal footing and a robust economy.
Last spring, the General Assembly passed and
the Governor signed Illinois Jobs Now!, a $31
billion capital program which finances projects
in communities throughout the state to
stimulate job growth and the Illinois economy.
It will support nearly 439,000 jobs.
Economic development cannot stop there.
Illinois must welcome new companies the state,
promote growth in economically-depressed
regions, encourage small business owners, and
continue to expand exports and foreign direct
investments.
To spur economic growth, strategic tax credits
must be offered. In January, the governor and
Ford Motor Company announced 1,200 new jobs
would come to Illinois as Ford will manufacture
its next-generation Explorer in Chicago. Illinois’
Economic Development for a Growing Economy
(EDGE) tax credit allows the auto industry to
retain employee income tax withholdings and
reinvest those funds into operations to generate
greater employment.
INITIATIVES
Job Creation Tax Credit
To promote job growth in Illinois, for one year,
beginning this April, small businesses would
receive a $2,500 credit for each permanent fulltime
job they create. A total of $50 million
would be available throughout the state on a
first-come-first-serve basis. For-profit and nonprofit
business with fewer than 50 employees
are eligible for the credit.
Performance Metrics
In response to PA 96-0045, the Public
Accountability and Performance System Act, the
Governor’s Office is working closely with
agencies to create and improve metrics that will
promote quality management, accountability,
and performance. More robust performance
metrics will allow agencies to better evaluate
their programs’ success, as well as provide
valuable information to citizens about the use of
their tax dollars.
Illinois Health Information Exchange Initiative
(HIE)
The Governor’s Office of Health Information
Technology is leading a statewide and multiagency
initiative to facilitate the exchange of
health information among Illinois healthcare
providers. HIE will enable healthcare providers
to securely share and access vital health
information electronically, to reduce medical
errors and improve patient care coordination.
Initial funding for HIE comes from an American
Recovery and Reinvestment Act (ARRA) grant.
In the short-term, this initiative maximizes
available ARRA funding. In the longer-term, the
Medicare and Medicaid programs expect to
realize significant cost savings by eliminating
redundant testing and reducing hospital
readmissions and other costs that result from
poor care coordination.
Integrated Care Delivery System
The Department of Healthcare and Family
Services (HFS) has taken the first step in
significantly reforming the delivery of care to
the most vulnerable populations covered by
Medicaid. HFS issued a request for proposals
seeking managed care organizations to provide
adults with disabilities and older adults in the
Medicaid program the full spectrum of Medicaid
covered services through an integrated care
delivery system. The first phase of the program
will focus on traditional medical services with
later phases coordinating long-term care. The
initial phase is expected to save taxpayers close
to $200 million in its initial five-year period.
UPDATES
Both ARRA and Illinois Jobs Now! are crucial to
the economic recovery of our state and nation.
Many recovery dollars are at work now and
Executive Budget for Fiscal Year 2011 Chapter 2 - 4
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
projects are underway. The result of these
economic recovery and development projects
will be seen in months and years to come.
ARRA
Since President Obama signed the American
Recovery and Reinvestment Act on February 17,
2009, Illinois has been awarded over $13.5
billion in grants and entitlements. Of awarded
funds, Illinois paid out nearly $6 billion to
schools, service providers, and companies.
Illinois is ranked third in the nation for total
dollars expended with 63 percent of available
funds spent. Through ARRA, approximately
63,000 Illinois jobs have been created or saved.
Highlights of ARRA-financed projects follow:
• $1.23 billion to bring high-speed
passenger rail service to Illinois by 2014.
Illinois is one of only three states to receive
over $1billion for high-speed passenger rail.
The network is designed to connect Midwest
cities to Chicago with reliable high-speed
and conventional intercity rail service.
• Nearly $1 billion in energy investments.
Energy funding in Illinois will weatherize an
estimated 27,000 homes, provide rebates to
upgrade to energy efficient appliances,
support renewable energy and upgrade local
and state transportation resources to lower
emissions vehicles.
• $1.3 billion for transportation.
Illinois has committed to completing 1,011
miles of road repair (reconstruction,
patching and resurfacing) and 62 bridge
repair/replacements on the state and local
Highway system. Ten Illinois airports
received ARRA funds to rehabilitate runways
and taxiways. Infrastructure funds are being
expended quickly, 496 ARRA contracts have
been awarded and 175 have been
completed.
Capital program and Illinois Jobs Now!
Last spring Governor Quinn and the General
Assembly enacted Illinois Jobs Now!, the state’s
first new capital program in more than 10 years.
Illinois Jobs Now will utilize $15 billion in state
funds, $13.2 billion in federal funds and $2.7
billion from local sources. Over six years, it is
expected to spur economic growth and create
nearly 440,000 jobs in Illinois.
The construction plan will provide funding to
build critically needed schools, improve roads,
repair bridges, protect natural resources,
improve public transit, make investments in
energy and the environment, and provide access
to capital for economic development, affordable
housing and community health centers
throughout the state.
Through March, $1.637 billion of bonds have
been sold for Illinois Jobs Now!, and an
additional $1.056 billion is scheduled to be sold
through the end of fiscal year 2010.
Agency
FY 2011
Total
Appropriations
Board Of Higher Education 3 41,638,368
Capital Development Board 1 ,925,611,248
Chicago State University 6 1,557,794
Department Of Agriculture 3 9,648,881
Department Of Central Management Services 1 81,541,897
Department Of Children And Family Services 2 7,587,874
Department Of Commerce And Economic Opportunity 2 ,125,950,445
Department Of Corrections 4 19,155,579
Department Of Human Services 1 38,022,097
Department Of Military Affairs 70,430,215
Department Of Natural Resources 9 27,124,523
Department Of Public Health 1 70,153,465
Department Of Revenue 1 56,595,064
Department Of State Police 8 1,277,455
Department Of Transportation 1 9,055,232,318
Department Of Veterans' Affairs 1 15,985,907
Eastern Illinois University 2 1,769,302
Governors State University 2 8,908,052
Illinois Commerce Commission 4 6,123
Illinois Community College Board 6 37,147,143
Illinois Emergency Management Agency 2 5,000,000
Illinois Environmental Protection Agency 1 ,892,523,208
Illinois Finance Authority 13,010,142
Illinois Historic Preservation Agency 28,795,568
Illinois Mathematics And Science Academy 10,360,151
Illinois Medical District Commission 3 ,864,045
Illinois State University 9 0,577,388
Northeastern Illinois University 9 1,009,635
Northern Illinois University 6 7,591,820
Office Of The Architect Of The Capitol 1 07,462,587
Office Of The Attorney General 2 ,135,040
Office Of The Secretary Of State 3 49,999,790
Southern Illinois University 2 11,435,701
State Board Of Education 4 30,000,000
Supreme Court 1 7,319,426
University Of Illinois 4 56,796,728
Western Illinois University 1 47,882,073
Total Capital Appropriations 30,471,147,052
Executive Budget for Fiscal Year 2011 Chapter 2 - 5
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
($ whole)
User Agency and Location Project Description 1 2012 2013 2014 2015 2016 Total 3
State Facilities
Department of Agriculture
Centralia Diagnostic Lab Replace Roof $13,437 $6,748 $6,748 $6,748 $6,748 $40,430
Illinois State Fairgrounds Replace HVAC - Administration Building Chillers $42,798 $38,798 $38,798 $38,798 $38,798 $197,989
Illinois State Fairgrounds Replace Roof $83,646 $42,008 $42,008 $42,008 $42,008 $251,679
Office of the Architect of the Capitol
Capital Complex HVAC Renovation & Upgrade $36,028 $36,028 $36,028 $36,028 $36,028 $180,139
Central Management Services
James R. Thompson Center HVAC Renovation and Upgrade $26,864 $26,864 $26,864 $26,864 $26,864 $134,319
Elgin Regional Office Building Upgrade HVAC System $33,127 $28,127 $28,127 $28,127 $28,127 $145,637
Collinsville State Office Building Replace Roof $54,809 $25,378 $25,378 $25,378 $25,378 $156,323
Office of the Attorney General
Attorney General Building Replace Light Ballasts $72,904 $72,904 $72,904 $72,904 $72,904 $364,520
Department of Human Services
Illinois School for Visually Impaired Replace Roof $4,759 $2,390 $2,390 $2,390 $2,390 $14,319
Department of Corrections
Southwestern Correctional Center Replace Roof $7,746 $3,890 $3,890 $3,890 $3,890 $23,308
Logan Correctional Center Replace Roof $7,746 $3,890 $3,890 $3,890 $3,890 $23,308
Vienna Correctional Center Replace Roof $8,316 $4,177 $4,177 $4,177 $4,177 $25,023
Department of Juvenile Justice
Illinois Youth Center-Joliet Replace Roof $1,160 $583 $583 $583 $583 $3,490
Illinois Youth Center-Pere Marquette Replace Roof $2,065 $1,037 $1,037 $1,037 $1,037 $6,214
Illinois Youth Center-St Charles HVAC replacement for residential cottages $19,629 $15,629 $15,629 $15,629 $15,629 $82,145
ANTICIPATED TOTAL OPERATING SAVINGS $415,035 $308,452 $308,452 $308,452 $308,452 $1,648,843
($ whole)
User Agency and Location Project Description 1 2012 2013 2014 2015 2016 Total 3
State Facilities
Illinois Historic Preservation
Springfield Purchase the Tinley Dry Goods Store $43,000 $43,000 $43,000 $43,000 $43,000 $215,000
Illinois State Police
Belleville Construct New Metro-East Forensic Lab $100,000 $100,000 $100,000 $100,000 $100,000 $500,000
$250,000 $250,000 $250,000 $250,000 $250,000 $1,250,000
ANTICIPATED TOTAL OPERATING COSTS $393,000 $393,000 $393,000 $393,000 $393,000 $1,965,000
Footnotes:
1 Projects listed are presented as part of the FY10 Illinois Jobs Now! Capital Plan. Projects are subject to change depending upon such factors as funding
availability and unforeseen emergencies at other state facilities, etc.
2 Project completion estimates are provided by the Capital Development Board.
3 Amounts represented are in present day dollars and not adjusted for inflation.
Appendix A
Select State Facility Projects: Anticipated Impact on Operational Costs
Fiscal Year 2
Fiscal Year 2
Select State Facility Maintenance Projects: Anticipated Operational Savings
Chart 1: 5-Year Savings Impact on the Operating
Budget ($1.6 million)
Savings on
Utilities,
$1,426,774,
87%
Savings on
Repair and
Maintenance,
$222,069,
13%
Chart 2: 5-Year Cost Impact on the Operating Budget ($2.0
million)
Increase in
Personnel Cost,
$500,000, 25%
Increase in Utility
Cost, $1,465,000,
75%
Executive Budget for Fiscal Year 2011 Chapter 2 - 6
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
FINANCIAL SUMMARY
The proposed level of operating appropriations
from all funds in fiscal year 2011 is $51.7
billion, compared to a fiscal year 2010
appropriation of $53.7 billion. This represents a
decrease of $2.0 billion from fiscal year 2010.
Appropriations are made from individual funds,
the names of which are often indicative of either
the purpose of the appropriation or the major
source of the funds’ receipts. The following
table shows appropriations by major fund
group.
Operating Appropriations by Fund Group
Fiscal Year 2011
General Funds
47.4%
Special State
Funds
25.2%
Federal Trust
Funds
18.8%
Highway Funds
4.0%
Debt Service
Funds
3.9%
State Trust Funds
0.6%
All Funds Total - $51.7 Billion
General funds - The largest fund group, in
terms of dollars, are the General Funds. This
fund group represents 47.4 percent of total
recommended appropriations and consists of
the General Revenue Fund, the Common School
Fund, the Education Assistance Fund and the
General Revenue-Common School Special
Account Fund. The General Funds support the
largest proportion of state programs as well as
the executive, legislative and judicial branches
of state government. The General Funds are
commonly known as the state’s operating funds.
Special State Funds - The next largest fund
group, in terms of dollars, are the Special State
Funds. Included within this group are the
following major categories:
• Highway Funds – These funds include the
state Construction Account Fund (only
presented in the capital budget), the Road
Fund, the Grade Crossing Protection Fund
(only presented in the capital budget) and
the Motor Fuel Tax Fund. Appropriations
from the highway funds support
transportation and highway maintenancerelated
activities and include a mechanism
for diverting a portion of road-related fees to
local governments.
• Other Special State Funds – Over 300 funds
support such diverse activities as medical
assistance, children’s services,
environmental cleanup, financial regulation
and health insurance.
Executive Budget for Fiscal Year 2011 Chapter 2 - 7
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
Federal Trust Funds – This fund group
supports a variety of state programs funded
with Federal revenues, including education,
health care, human
services, community development,
transportation and energy. Nearly 60 percent of
these dollars support education and
employment related activities.
Appropriations also may be grouped according
to purpose. The charts above show
appropriations by major purpose, identifying the
principal spending activities of state
government. The charts show that the major
portions of the state’s resources are allocated to
education, healthcare and social human
programs.
Approximately 24.3 percent of the state’s All
Funds total operating budget, or $12.6 billion, is
dedicated for educational purposes. The
recommended appropriations for Human
Services and Healthcare and Family Services -
which include Medicaid, other medical
assistance, income support, child and
community care programs and other health and
social services - total $25.7 billion or nearly 49.8
percent of the state’s total operating budget.
Fiscal Year 2011 Operating Appropriations by Major Purpose Percentage of Total
Fiscal Year 2011 Revenues by Source Percentage of Total
Healthcare And
Family Services
32.2%
Education
24.3%
Human Services
17.6%
Economic
Development And
Infrastructure
10.8%
Government
Services
8.8%
Public Safety
4.7%
Environment And
Business
Regulation
1.6%
All Funds Total - $51.7 Billion
Education
33.7%
Healthcare And
Family Services
32.3%
Human Services
23.1%
Public Safety
5.9%
Government
Services
4.0%
Economic
Development And
Infrastructure
0.8%
Environment And
Business
Regulation
0.2%
General Funds Total - $24.5 Billion
Individual Income
Tax
31.6%
Sales Tax
22.9%
Federal Aid
22.0%
Public Utility
4.2%
Corporate Income
Tax
5.7%
Lottery &
Riverboat Gaming
3.9%
Other Sources
9.7%
General Funds - $27.4 Billion
Income Tax
19.4%
Sales Tax
13.5%
Federal Aid
34.0%
Lottery &
Riverboat Gaming
3.1%
Motor Fuel Tax
2.6%
Public Utility
Taxes
3.7%
Other Receipts
23.8%
All Appropriated Funds - $52.8 Billion
Executive Budget for Fiscal Year 2011 Chapter 2 - 8
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
The two charts above identify the major revenue
sources for all appropriated funds and the
General Funds.
Total state revenues are projected to be $52.8
billion in fiscal year 2011, and General Funds
receipts are estimated at $27.4 billion. General
Funds revenues are estimated to decrease by
1.9 percent, or $551 million.
A breakdown by major revenue category can be
found in Table II-A for total revenues and Table
II-B for General Funds revenues. As can be seen
in those tables, revenues from the income and
sales taxes are the major source of state funds.
They account for 33 percent of all receipts and
60.2 percent of General Funds receipts, as
illustrated above.
Executive Budget for Fiscal Year 2011 Chapter 2 - 9
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
The fiscal year 2011 Budget Plan is set to the
below. This plan reflects the basis for
appropriations and is the same information
provided in prior years’ budgets, although
utilizing standard business language and “plain
English” to reflect
the governor’s commitment to and principle of
truth in budgeting. Revenues are estimated on
the modified accrual basis of revenues
recognition.
See the schedule below for a fiscal year 2011
Operating Budget Plan for all appropriated
funds.
3/6/2010
F
OPERATING REVENUES PLUS TRANSFERS IN
REVENUES
State Sources $ 2 0,984 $ 19,085 $ 1 9,684
Federal Sources $ 6,567 $ 6,743 $ 6,032
TOTAL REVENUES $ 27,551 $ 2 5,828 $ 2 5,716
STATUTORY TRANSFERS IN
Statutory Transfers In $ 1,593 $ 2,167 $ 1 ,728
TOTAL TRANSFERS $ 1,593 $ 2 ,167 $ 1,728
TOTAL OPERATING REVENUES PLUS TRANSFERS IN $ 29,144 $ 2 7,995 $ 27,444
OPERATING EXPENDITURES AND TRANSFERS OUT
CURRENT YEAR EXPENDITURES
APPROPRIATIONS (Total Budget) 1 $ 2 7,796 $ 26,309 1 $ 2 4,777
Less: Unspent Appropriations (Unspent Budget plus Uncashed Checks) ($322) ($400) ($496)
NET APPROPRIATIONS BEFORE PENSION CONTRIBUTIONS $ 2 7,474 $ 25,909 $ 2 4,281
PENSION CONTRIBUTIONS $ 2,486 $ - 1 $ 4 ,157
Less: Savings from Pension Stabilization $ - $ - ($267)
Equals: CURRENT YEAR EXPENDITURES (Net Appropriations Spent) $ 29,960 $ 2 5,909 $ 2 8,171
STATUTORY TRANSFERS OUT
Legislatively Required Transfers (Diversions to Other Funds) $1,897 2,002 $ 2 ,004
Pension Obligation Bond Debt Service (includes FY10 Pension Funding Bonds) $466 $564 $ 1 ,611
Debt Service Transfers for Capital Projects $636 $670 $ 6 38
Less: Reduced Transfer to Local Government Distributive Fund $0 $ - ($308)
TOTAL TRANSFERS OUT $ 2,999 $ 3 ,236 $ 3,946
TOTAL OPERATING EXPENDITURES AND TRANSFERS OUT $ 32,959 $ 2 9,145 $ 32,117
BUDGET BASIS FINANCIAL RESULTS AND BALANCE
BUDGET BASIS OPERATING SURPLUS (DEFICIT) [Receipts less Payments] ($3,815) ($1,150) ($4,672)
OTHER FINANCIAL SOURCES (USES)
Short-Term Borrowing Proceeds $2,400 $1,250 $0
Repay Short-Term Borrowing (including interest) ($1,424) ($2,295) $0
Voucher payment notes 2 $0 $0 $4,672
TOTAL OTHER FINANCIAL SOURCES (USES) $976 ($1,045) $4,672
BUDGET BASIS SURPLUS (DEFICIT) FOR FISCAL YEAR ($2,839) ($2,195) $0
Plus: Budget Basis Fund Balance at Beginning of the Fiscal Year ($834) ($3,673) ($5,868)
BUDGET BASIS FUND BALANCE (DEFICIT) AT END OF FISCAL YEAR ($3,673) ($5,868) ($5,868)
CASH BASIS FINANCIAL RESULTS
BUDGET BASIS SURPLUS (DEFICIT) FOR FISCAL YEAR ($2,839) ($2,195) $0
Change in Accounts Payable (Change in Lapse Period Amounts)
Accounts Payable at End of Prior Fiscal Year $975 $3,953 $6,148
Less: Accounts Payable at End of Current Fiscal Year ($3,953) ($6,148) ($6,148)
Equals: Increase/(Paydown) of Accounts Payable During Fiscal Year $2,978 $2,195 $0
CASH BASIS SURPLUS (DEFICIT) FOR FISCAL YEAR 3 $139 $0 $0
CASH POSITION
CASH BASIS SURPLUS (DEFICIT) FOR FISCAL YEAR $139 $0 $0
Plus: Cash Balance in General Funds at Beginning of Fiscal Year $ 141 $ 2 80 $ 280
Equals: Cash Balance in General Funds at End of Fiscal Year $ 280 $280 $280
Plus: Cash Balance in Budget Stabilization Fund at End of Fiscal Year $ 276 $ 2 76 $ 276
Equals: Total Cash at End of Fiscal Year $ 556 $ 5 56 $ 556
1
2
3
Fiscal Year 2010
Revised Budget
Fiscal Year 2011
Introduced Budget
GENERAL FUNDS - BUDGET RESULTS & BUDGET PLANS FY2009-FY2011
Fiscal Year2009
Actual
FY2010 appropriations do not reflect the FY2010 statutory pension contribution for the General Funds. That amount will be financed and paid through issuance of approximately
$3,466 million in General Obligation Pension Funding Bonds during the fiscal year.
A series of notes to pay specific vouchers during the fiscal year.
Cash Basis Surplus (Deficit) equals Budget Basis Surplus (Deficit) minus (plus) Other Cash Uses (Sources) relating to changes in Accounts Payable
during the fiscal year.
Executive Budget for Fiscal Year 2011 Chapter 2 - 10
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
The table and chart below summarize the
employee headcount totals for fiscal year 2011,
as well as the prior two fiscal years, by major
functional area of state government. The
budgeted employee headcount total for fiscal
year 2011 will increase as the Department of
Human Services and the Department of
Corrections address costly overtime issues by
increasing staff. Additionally, state reform and
federal stimulus programs will necessitate an
increase in some agencies.
Human Services
37.9%
Public Safety
27.0%
Economic
Development And
Infrastructure
15.8%
Government
Services
7.7%
Environment And
Business
Regulation
7.1%
Healthcare And
Family Services
4.5%
FY 2010 FY 2010 FY 2011
FY 2009
Actual
GOMB
Managed
Agency
Estimated
Agency
Recommended
Human Services 20,110 20,289 20,908 21,182
Public Safety 15,141 15,302 15,535 15,072
Economic Development And Infrastructure 7,864 8,419 8,528 8,827
Government Services 4,010 4,013 4,106 4,329
Environment And Business Regulation 3,699 3,673 3,934 3,973
Healthcare And Family Services 2,404 2,327 2,487 2,510
Total 53,227 54,023 55,497 55,892
Employee Total
Purpose
Executive Budget for Fiscal Year 2011 Chapter 2 - 11
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
BUDGET POLICIES
Operating Budget Policies
The Illinois Constitution requires a balanced
budget. Expenditures proposed by the
Governor shall not exceed funds estimated to be
available for the fiscal year. Public Act 90-479
amended the Civil Administrative Code to
provide guidance to the governor as he
proposes the budget. Tables II-C and II-D
provide revenue and expenditure information
pursuant to Public Act 90-479.
The state will impose budgetary reserves:
General Funds and Special State Funds will be
required to maintain a two percent reserve to
ensure that spending does not exceed estimated
revenue.
Strategic Fiscal Policies
The state’s strategic fiscal policies will be
designed to eliminate the fiscal imbalance
caused by expenditures growing at a faster rate
than revenues. These policies will include the
following:
• Help families during times of recession
• Fund key priorities including education and
healthcare
• Invest in the economy and the state’s
infrastructure
• Reduce the state’s pension liability
• Implement new revenue streams that reflect
the state’s economic base
• Contain core costs
• Improve the efficiency of state procurement
• Maintain debt affordability processes for
capital programs
• Measure program performance
• Enhance revenue compliance and
enforcement
• Require new spending to be matched by new
revenues
• Transfer excess balances in special funds
• Streamline government by reducing the size
and increasing its responsiveness.
Financial Reporting Policies
The state annual financial report will follow
accounting and financial reporting practices in
conformity with accepted principles and
standards of the Governmental Accounting
Standards Board (GASB) and best practices of the
Government Finance Officers Association
(GFOA).
Revenue Policies
To develop revenue policies, the state will
consult with the Council of Economic Advisors
and independent national economic consulting
firms, and utilize various revenue forecasting
methodologies including econometric modeling,
historical relationships and economic indicator
projections.
The state will monitor revenues on a semimonthly,
and quarterly basis. Comparisons will
be made to both budget and prior year, in order
to facilitate a rapid response to changes in
economic conditions and fiscal status.
Expenditure Policies
The state will monitor expenditures on a
monthly basis through the Budget to Actual
Variance reporting and variance analysis.
Operating Expenditure Policy
Agencies will prepare Budget to Actual Variance
Reports: actual expenditures will be compared
to budget, monthly and quarterly allotments will
be made, and significant variances will be
addressed by all agencies under the governor.
Agencies will prepare Corrective Action Plans:
budget to actual variances of two percent or
Executive Budget for Fiscal Year 2011 Chapter 2 - 12
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
more from their allotments will require a
corrective action plan that will be monitored by
the Governor’s Office of Management and
Budget.
The Governor’s Office of Management and
Budget will approve procurement transactions of
$1 million or more.
The Governor’s Office of Management and
Budget will approve all personnel transactions.
Reserve Policy
The state will reserve general funds for cash
management purposes to reduce the need for
short term borrowing and provide additional
resources to assist the state in meeting its
needs.
Debt Capacity, Issuance and Debt Service
Policies
The state will identify new or increased revenues
when authorizing additional debt to support
capital spending.
The state will conduct debt affordability
analyses to determine the long-term effects of
debt repayment on future operating budgets.
Unless otherwise necessary to offset pension
liability, the state will limit debt service
expenditures to no more than seven percent of
General Revenue and Road Funds
appropriations.
Capital Expenditure policy
The state will annually forecast and analyze
revenues available for capital expenditures.
The state will conduct a formal capital planning
process to annually rank projects based on
specific criteria including life/safety factors,
code compliance, infrastructure maintenance,
cost benefit analysis and targeted new
construction programs.
The state will annually evaluate the impact of
new capital spending on the operating budget.
The state will perform facilities management
and condition assessments in order to provide
information and recommendations for current
and future capital expenditures.
Pensions
The state will continue to implement
recommended pension actions that improve the
systems’ financial condition and affordability.
The state will approve a proposed increase in
pension benefits only if matched by continuing
revenue sources.
Performance Measures
The agencies under the governor will develop
performance measures that indicate progress
toward the governor’s priorities and each
agency’s core mission.
The performance measures will focus on
outcome measurement in order to assess the
impact on the public.
The performance measures presented in the
budget book will include estimated data for the
current year, projected data for the budget year
and historical data for the three prior fiscal
years.
Legislative Policies
Agencies under the governor will submit
proposed legislation to the Governor’s Office of
Management and Budget to determine the fiscal
impact to the budget. All proposed legislation
that has a fiscal impact is accounted for in the
governor’s proposed budget.
During the course of the legislative session, the
Governor’s Office of Management and Budget
will prepare balanced budget notes at the
request of members of the General Assembly.
These notes assess the fiscal impact of
proposed legislation on the budget.
The Governor’s Office of Management and
Budget will review rule change proposals of
agencies under the governor to determine their
fiscal impact on the operating budget.
The table below summarizes additional fiscal
policies of the state. The state’s fiscal policies
are designed to minimize administrative cost
and maximize state efficiency.
Executive Budget for Fiscal Year 2011 Chapter 2 - 13
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
SELECT FINANCIAL POLICIES
State Agency Financial Policy Brief Policy Description
Treasurer’s Office
State Treasurer’s Investment Policy
http://www.state.il.us/treas/InsideOffice/invpo
licy.htm
The Treasurer’s investment policy calls for
investment of all funds in a manner that provides
the highest investment return using authorized
instruments while meeting the state’s daily cash
flow demands. The policy covers the following
areas: ethics and conflict of interest; authorized
broker/dealers and financial institutions;
authorized and suitable investments; investment
restrictions; collateralization; diversification;
custody and safekeeping; internal controls;
limitation of liability; and reporting.
Comptroller’s Office
Statewide Accounting Management System
procedures manual (SAMS Manual)
ftp://163.191.177.34/iocpdf/
SAMSManualMaster.pdf
The Comptroller’s SAMS Manual documents the
fiscal policies, accounting principles, controls,
operating procedures and reporting
requirements for the Statewide Accounting
Management System. The Manual assists state
agencies by indicating the method to be used for
processing accounting information between
agencies and the Comptroller’ Office.
Governor’s Office of
Management and
Budget
Interest Rate Risk Management Policy
http://www.state.il.us/budget/Intr_Rate_Policy
_October2003Final.pdf
This policy establishes the purposes and
procedures by which the state may enter into an
exchange contract or issue direct variable rate
debt. The policy covers the following areas:
definition of variable interest rate position;
purposes of interest rate exchange contracts;
risk assessment; form and legality of agreement;
qualified counterparties and collateral provisions;
counterparty aggregate position limits; liquidity
facility; monitoring and reporting; and terms of
policy review.
Central Management
Services
Standard Procurement Rules
http://www.state.il.us/cms/download/pdfs/sel
_rule.pdf
All qualified vendors are invited to participate in
bidding on the wide variety of commodities and
equipment purchased by the state. The
Department of Central Management Services is
authorized by law to buy commodities and
equipment for state agencies and elected
officials. The state’s procurement rules establish
standards for procurement authority, bid
thresholds, bid publication, bid security, duration
of contracts, contract pricing, preferences,
ethics, protests, supply management and
governmental joint purchasing.
Comptroller’s
Office
Budget Stabilization Fund (30 ILCS 122/1)
http://www.ilga.gov/legislation/ilcs/ilcs.asp
Funds are reserved for use in the cash
management of the General Revenue Fund, thus
reducing the need for short term borrowing and
serving to provide additional resources to assist
the state in meeting its needs. The priority for
the use of these funds include secondary and
elementary education, child care and other
programs that may provide a direct benefit to
children.
Executive Budget for Fiscal Year 2011 Chapter 2 - 14
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
THE BUDGET PROCESS
The Illinois Constitution requires the governor
to prepare and present a state budget
recommendation for the state to the General
Assembly. The Constitution also requires that
the proposed budget be balanced and include
recommended spending levels for state
agencies, estimated funds available from tax
collections and other sources, and state debt
and liabilities. The Governor’s Office of
Management and Budget (GOMB) estimates
revenues in consultation with the Department of
Revenue. GOMB subsequently develops budget
recommendations that reflect the governor’s
programmatic and spending priorities.
Planning: September through February
Planning for the next fiscal year begins each fall.
During the planning phase, the following
activities occur:
• Agencies work with GOMB and the
governor’s Office to refine strategic
priorities, develop initiatives to achieve those
priorities, and evaluate actual performance
compared to benchmarks from comparable
states or other peer entities;
• GOMB and agency staff identify and estimate
potential spending for the coming fiscal
year, including both the costs of current and
potential programs and the value of
expansion, modification or elimination of
various programs;
• Working with the Council of Economic
Advisors, GOMB and the Department of
Revenue review economic forecasts and
make preliminary revenue estimates;
• GOMB, the Department of Central
Management Services and agencies review
statewide trends and administrative
processes to find and reduce inefficiencies
and propose reallocation of resources to
improve efficiency and promote better
government;
• Based on targets, assumptions and materials
provided to agencies by GOMB, agencies
prepare, and GOMB reviews, preliminary
budget materials;
• GOMB, the Governor’s Office and agencies
meet to review and discuss available
revenue, anticipated spending and program
priorities to develop budgets that reflect the
core priorities of the agency;
• Periodically, GOMB reviews revenue and
spending estimates, resulting in review and
reprioritization of agency and state
priorities;
• When final budget options are developed,
they are presented to the governor for
review and approval before they are drafted
in legislative form. GOMB then produces the
budget book, a narrative explaining the
budget and providing complete budget table
forms;
• The governor announces and describes the
budget in the annual Budget Address; and
• GOMB drafts appropriation bills to
implement the governor’s budget
recommendations.
Legislative Deliberation: March through May
After the Governor’s Budget Address in March,
legislative review of the governor’s budget
recommendations begins with hearings before
House and Senate appropriation committees.
During this period, the following activities occur:
• Appropriation committees may adopt
amendments to change the funding level
recommended by the governor;
• Once passed by the first committee, an
appropriation bill moves to the full House or
Senate for consideration, amendment and a
vote. Following passage in the first
legislative chamber, the appropriation bill
moves to the second chamber, where a
similar process takes place. Changes made
in either chamber must ultimately be
Executive Budget for Fiscal Year 2011 Chapter 2 - 15
FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State3679FY2011: Fiscal Overview & Budget
Summary
State of Illinois
www.state.il.us/budget
108 State House
Springfield, IL 62706
217.782.4520
accepted in identical form by both chambers
for the bill to pass and be presented to the
governor;
• As the budget moves through the
legislature, GOMB monitors any amendments
as well as substantive legislation to identify
potential fiscal impacts;
• By statute, and if requested, any proposed
amendments to the budget and any
substantive legislation with fiscal or revenue
impacts must be accompanied by a fiscal
note to describe such impacts; and
• Final approval of the budget usually occurs
at the end of the legislative session, typically
by the end of May. The Illinois Constitution
requires a simple majority vote of the
General Assembly for a bill passed on or
before May 31 to take effect immediately.
On or after June 1, a three-fifths super
majority vote of the General Assembly is
required in order for a bill to take effect for
the upcoming fiscal year.
Gubernatorial Review:
Following end of Legislative Session
Once the General Assembly passes the budget,
the governor must sign appropriation bills
before funds can be spent. If the governor
chooses not to approve a specific appropriation,
he may either veto a specific line item or reduce
it. The rest of the appropriation bill is
unaffected by these vetoes and becomes
effective. Line items that have been vetoed or
reduced must be reconsidered by the General
Assembly during the fall session. The General
Assembly may return an item to the enacted
level by simple majority vote in both chambers
in the case of a reduction veto and by a threefifths
super majority vote in the case of a line
item veto. If additional resources beyond those
initially approved in the budget become
necessary, a supplemental appropriation bill
may be passed any time the General Assembly is
in session. Please refer to Table I-B for current
supplemental appropriation bills being
considered for spring 2010.
Executive Budget for Fiscal Year 2011 Chapter 2 - 16
www.state.il.us/budget
Table I-A Operating Appropriations by Agency – All Funds
Summarizes each agency’s general funds, other state funds, federal funds and total
appropriations for fiscal years 2009, 2010, and 2011. The footnotes to Table I-A
explain the various transfers of functions and funds related to agency reorganizations
and program changes.
Table I-B: Supplementals to Complete Fiscal Year 2010
Lists of the Governor’s recommended supplemental appropriations for fiscal year 2011
as of January 31, 2010.
Table II-A: Revenues by Source – All Appropriated Funds
Summarizes, by source, all appropriated state revenues for four fiscal years.
Table II-B: Revenues by Source – General Funds
Summarizes, by source, all revenues deposited into the state’s general funds for four
fiscal years.
Table II-C: Budgeted Funds Revenues – GAAP Basis
Budgeted funds revenues prepared in accordance with Public Act 90-479 for fiscal year
2011.
Table II-D: Budgeted Funds Expenditures – GAAP Basis
Budgeted funds expenditures prepared in accordance with Public Act 90-479 for fiscal
year 2011.
Table III-A: Road Fund
Provides a summary of the receipts into the Road Fund and allocations from the fund to
various state agencies for four fiscal years.
Table III-B: Motor Fuel Tax – State Funds
Summarizes the receipts into the Motor Fuel Tax Fund and distributions from the fund
for four fiscal years.
Table IV-A: Appropriated Operating Funds by Fund Group for Fiscal Year 2011
Summarizes, by fund group, the appropriated funds and projected operating cash flow
for fiscal year 2011.
Table IV-B: Appropriated Operating Funds by Fund for Fiscal Year 2011
Lists all appropriated funds and describes each fund’s projected operating cash flow for
fiscal year 2011.
State of Illinois Summary Tables
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