Reports

American Rescue Plan FAQ: Illinois

Release: July 12, 2021

On March 11, 2021, the Biden Administration secured passage of the American Rescue Plan Act (“ARPA”), which provides fiscal relief designed to counter economic issues created by the pandemic. ARPA is considerable in size and provides a total of $1.9 trillion in federal aid for state and local governments to use to support the provision of various core public services such as healthcare, human services, and education, as well as to infrastructure.

Given the significant federal aid flowing through ARPA, CTBA has compiled the following answers to some of the most frequently asked questions about that legislation and how it will impact Illinois.  

Recommended Changes to Illinois Tax Expenditures, FY 2022

Release: May 13, 2021

To address some of the shortcomings that have created the structural deficit in the state’s fiscal system, the FY 2022 GF Proposal includes a number of initiatives designed to generate new revenue for the General Fund.  Key among these are initiatives that would:

(i) eliminate or modify a number of tax breaks—which are more accurately described as “tax expenditures”—the state currently grants to corporations, to generate some $932 million in General Fund revenue for FY 2022; and

(ii) “decouple” Illinois from tax expenditures granted to businesses by the federal government, that cannot be expected to generate any benefit in the state, but would cause the loss of anywhere from $500 million to $1 billion in annual General Fund Revenue.

Fully Funding the EBF: Volume III

Release: March 16, 2021

In the FY 2022 General Fund budget proposal the Governor announced in February, K-12 funding under the Evidence-Based Funding formula (EBF) is once again held level with FY 2020, in nominal, non-inflation adjusted dollars. While that is certainly better than being cut from FY 2020 levels in nominal dollars, it represents a step backward. By not providing additional new funding for the EBF, the state is extending the time it would take to fully fund the EBF by two years – if the state continues to put in a minimum of $300 million yearly beginning in FY 2023. That two year extension would mean extending the timeline to more than four times longer than what is required by statute. 

This update is the third installment in the Fully Funding the EBF Series.

Analysis of Illinois' FY 2022 Proposed General Fund Budget

Release: March 10, 2021

The FY 2022 Proposed General Fund Budget (the “FY 2022 GF Proposal”) makes one fact abundantly clear: spending on services is not driving the state’s fiscal problems.  Big picture, Illinois’ ongoing disinvestment in General Fund services is harming communities across the state for one simple reason: over 95 percent of all such spending goes to the four, core areas of Education (including Early Childhood, K-12, and Higher Education), Healthcare, Human Services, and Public Safety.

Increasing the Income Tax Rate

Release: February 16, 2021

Without new revenue available from the proposed Fair Tax, short-term borrowing, Federal Aid, and cutting some expenditures has allowed Illinois to hold on during the current fiscal year. But this is a short-term solution, and not a sustainable solution in tackling the long-term fiscal woes of Illinois. In our new short report, “Increasing the Income Tax Rate: One Method for Addressing Illinois’ Long-term Fiscal Problems” CTBA analyzes potential benefits of increasing the income tax rate, while ensuring that any increase in the income tax address the regressivity of a flat rate income tax structure through refundable tax credits.

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