On July 17, 2014, Bruce Rauner, the Republican nominee for Governor, released his long anticipated position paper on fiscal policy, dubbed the “Bring Back Blueprint: Jobs and Growth Agenda” (the “Blueprint”). The Blueprint represents candidate Rauner’s most complete policy statement on how to resolve the very real and serious fiscal problems that have plagued Illinois state government for decades.
In summary, those fiscal problems start with a projected deficit of $6.5 billion in the General Fund budget that was enacted for the state’s current fiscal year, FY2015, which began on July 1, 2014 and will end on June 30, 2015. (CTBA’s analysis of the FY2015 budget that passed into law is at available at CTBA’s website www.ctbaonline.org or by clicking here and CTBA’s analysis of the FY2015 budget proposed by Governor Quinn which did not pass the General Assembly is available by clicking here). For context, the projected FY2015 General Fund deficit of $6.5 billion represents 26.4 percent of all spending scheduled for public services this year.1 Unfortunately, running a General Fund deficit is nothing new in Illinois. According to the state Comptroller, this is the 25th consecutive year the state has run a General Fund deficit. That is a problem because $9 out of every $10 of General Fund spending goes to education (Pre-K through higher education, 34 percent), healthcare (29 percent), human services (19 percent), and public safety (7 percent).
Moreover, without a change in law, the General Fund deficit will worsen materially in FY2016. That is because the temporary state income tax rate increases passed as part of the Taxpayer Accountability and Budget Stabilization Act of 2011 (TABSA) are scheduled to phase-down, from 5 percent to 3.75 percent for the personal income tax, and from 7 percent to 5.25 percent for the corporate. Both state income tax rates will phase-down commencing on January 1, 2015, which is halfway through the state’s current fiscal year. This means the revenue loss from the rate phase-down is somewhat mitigated this year, as it will only pertain for six months. In FY2016, however, the lower income tax rates will be fully in effect for the whole year, causing significantly greater revenue loss. The net result will be that in FY2016, the state will realize a loss of revenue of around $3 billion from FY2015 levels—on top of the extant $6.5 billion deficit. [Emphasis added.]
But there’s plenty of money to go around.
Right.
* The CTBA also analyzed Rauner’s plan to cut nearly a billion dollars out of the budget and concluded that it would save a tenth of that.