Pensions

Released October 16, 2020

Do you still have questions about Illinois’ proposed amendment to the Illinois Constitution, often referred to as the “Fair Tax”? Over the past several months, the Center for Tax and Budget Accountability (“CTBA”) has been compiling some of the most frequently asked questions about the Fair Tax and has created this FAQ to help voters understand this ballot initiative.

Released August 19, 2020

If the Illinois FY 2021 Enacted General Fund Budget proves anything, it is that no matter how much things change in the world at large, the structural revenue problems in the state’s budget remain the same. Consider that, not even accounting for the impact of COVID-19, Illinois would nonetheless still have a General Fund deficit—meaning the state would not have had enough current revenue to cover some spending on public services this year—even if the pandemic never happened.

Despite the poor performance of the state’s revenue system over time, many commentators and editorial boards still try to blame the state’s historic, recurring deficit problems on overspending for services. The data, however, have simply never supported that canard, which is explained at length in this Report. The long-term structural deficit in Illinois’ General Fund—which will certainly become worse over the next few years as the impact of the COVID-19 pandemic on the economy is projected to drive revenue down significantly in all 50 states—is a real cause for concern.

A structural deficit like the one in Illinois’ General Fund, which is demonstrably driven by an underperforming revenue system, cannot be eliminated without raising taxes. In fact, Governor Pritzker has worked with the General Assembly to pass a tax reform package—known as the “Fair Tax”—predicated on replacing the flat rate individual income tax Illinois currently imposes with a graduated rate income tax. Recognizing the difficult political battle that will be waged over the Fair Tax, Governor Pritzker introduced two different General Fund budget proposals for FY 2021. But all of that happened before COVID-19 devasted the economy and drove down tax revenue in all 50 states, including Illinois. 

So, as expected, the economic downturn created by the COVID-19 pandemic has significantly worsened the state’s fiscal condition. That said, the analysis in this Report makes it clear that, even if the coronavirus had never happened, the fiscal shortcomings that plague Illinois’ General Fund are long-term, material, and structural, and cannot be resolved without comprehensively reforming the state’s tax policy. 

Released May 5, 2020

This report shows how the data make it quite clear that: Illinois incurred pension debt—under both Republicans and Democrats-- to mask its fiscal problems, not to pay irresponsibly high benefits; Illinois is not a high spending state, and in fact has cut spending on services in real terms by more than 23% since FY2000; that over $9 out of every $10 Illinois, and frankly every other state in America, spends on services goes to the four core areas of Education (including Pre-K, K-12, and Higher Ed), Healthcare, Human Services and Public Safety—meaning those are the services which are imperiled if the feds don’t come through with a significant relief package for state governments suffering revenue loss from the downturn caused by the COVID-19 pandemic; and the Pritzker Administration has actually pushed a number of fiscal initiatives that are actually responsible and counter some of the poor practices of the past.

Released October 31, 2019

In his first year in office, Governor J. B. Pritzker signed a General Fund budget that the General Assembly passed into law — something it took his predecessor four years to accomplish.

Released February 18, 2019

One idea that has been proposed by a number of observers to repay some of Illinois’ pension debt is an “asset transfer.” Under this proposal, the state (or the City of Chicago, which is also facing a large pension debt problem) would make a contribution to the pension systems in the form of a pub

Released May 24, 2018

Fiscal Year (FY) 2019 marks the fourth General Fund Budget proposed by Governor Bruce Rauner. For the first two years of Governor Rauner’s administration, FY2016 and FY2017, the state went without a full General Fund Budget.

Released August 12, 2015

This Report provides a detailed analysis of both Governor Bruce Rauner’s and the General Assembly’s two very different proposals for the FY2016 General Fund budget. Both budget proposals would cut services and increase the state’s deficit due to the phase down of the temporary tax increases in the state’s personal and corporate income tax rates that became effective on January 1, 2015. Collectively, those income tax rate cuts will cause Illinois’ General Fund to lose $4.6 billion in recurring revenue over the course of the full fiscal year.