COGFA publishes annual Budget Summary. The report published on August 1 covers the State budget passed for FY20, the fiscal year that began on July 1, 2019. Like the State’s monthly budget summaries (see below), the annual Budget Summary is published by the nonpartisan Commission on Government Forecasting and Accountability (COGFA). Unlike the monthly reports, however, the annual Summary is an overview of the entire State budget, including the public-sector operations for which the various budget line items have been appropriated. It is an anticipatory document for the Annual Report on FY20 to be published by the Office of the Illinois Comptroller after the fiscal year comes to an end.
As FY20 began, the General Assembly had passed a balanced budget for the State and its citizens. Expenditures are tied to appropriations, the sums of money that the General Assembly has authorized each agency to legally spend. For FY20, the General Assembly appropriated $38.45 billion in general funds, the money that pays State school aid and also pays most of what the State and its employees do in offices and workplaces. Substantial additional money has been appropriated for non-general-funds expenditures. These, typically, are things done by non-State-employee contractors outside of offices. The repair of roads and bridges is a key element of this non-general-funds category within the overall State budget. As an example of this category of spending, the General Assembly has appropriated $12.04 billion in highway funds for FY20. Non-general-funds revenue flows – including the State tax on motor fuel, paid by drivers at the pump – will cover these expenditures.
These appropriations have to match the money that is scheduled to come in from State income tax flows, motor fuel tax flows, and other sources. COGFA anticipates that general funds sources will bring in a bit more than $38.81 billion in State revenues in FY20, which will exceed anticipated FY20 general funds expenditures by approximately $360 million.
COGFA reports on July 2019 fiscal picture. The month of July 2019 marked the first 31 days of the State of Illinois’ fiscal year 2020 (FY20), which began on July 1, 2019. The numbers posted in this month are harbingers for the fiscal year as a whole. On a year-over-year basis, State cash flow was up $600 million in July 2019 as opposed to July 2018. Only $69 million of this increase came, however, from tax-financed recurring revenue streams controlled by Illinois law. Other moneys came from one-time sources, gambling taxes, and federal aid.
Recurring Illinois tax-supported cash flow is buttressed by the Illinois personal income tax, which yielded more than $1.56 billion in July 2019 – up $100 million from the $1.46 billion paid to the State from this tax in July 2018. More than half of this revenue comes from income taxes withheld at the paycheck stage – in Illinois, there are more than 6.1 million employed people who are working right now. With sales tax revenues up by $54 million in the same period, these two major taxes – personal income and sales taxes – now account for almost 90% of the total moneys taken in by the State from recurring tax revenues. Other taxes, such as cigarette taxes, are yielding lower revenues due to changes in smoking habits and other trends in personal behavior. In addition, another recurring tax – the corporate franchise tax charged by the State as a levy upon declared and paid-in equity capital – is being phased out in Illinois over a five-year period. The phase-out of the corporate franchise tax was one of the components demanded by House Republicans as part of the negotiations to pass the FY20 budget.
FIRST RESPONDERS
Illinois leaders pay tribute to Trooper Gerald Ellis. While on duty in Lake County on March 30, State Trooper Gerald Wayne Ellis was killed in the line of duty in Lake County on March 30, 2019. Trooper Ellis deliberately collided with a wrong-way driver on Interstate 94 in Green Oaks, Illinois, thereby saving a civilian family from harm. Trooper Ellis is survived by his wife and two daughters.
The Illinois State Police Memorial Park in Springfield contains an inscribed list of names of fallen members of this branch of State law enforcement. Trooper Ellis’s name was added to the memorial in a ceremony held on Wednesday, August 7.
GAMBLING
Potawatomi Hotel & Casino, other applicants apply for Waukegan license. The notices of intent follow passage by the General Assembly in June 2019 of SB 690, a bill creating up to six new casino gaming licenses throughout Illinois. One of the licenses is earmarked for the city of Waukegan. Casino gambling is taxed in Illinois, with part of the revenues going to the municipality in which the casino is located. In addition, successful applicants for a new casino license will have to pay a fee to the State for the right to set up new gaming positions. A chair next to a slot machine is a “gaming position,” as is a space at a table where games like craps or blackjack are played. The new Waukegan casino may have as many as 2,000 gaming positions.
This week half a dozen applicants took steps to apply for the Waukegan license. One of the applicants was the established, Milwaukee-based, Potawatomi Hotel and Casino. Only one license can be awarded per city. Similar one-winner licenses are being granted in other Illinois cities such as Danville and Rockford. Although some applicants, such as the Potawatomi Hotel, are based in other states, if any of them get the Waukegan license they will have to pay taxes in Illinois, and their employees will have jobs in Illinois. Studies indicate there is a substantial outflow of gamblers from the Lake County, Illinois area to the Milwaukee-based Potawatomi Hotel and Casino.
NATURAL RESOURCES
State parks and recreation areas begin to tackle deferred maintenance. Capitol infrastructure at Illinois state parks, including heavily-used, sensitive resources such as swimming pools and family-picnic kiosks, have been neglected due to recent budget stalemates and cuts in funding. Appropriation moneys, enacted by the General Assembly in the FY20 budget, are starting to move towards essential Illinois Department of Natural Resources (IDNR) projects. Visitors to state parks are starting to see work crews repairing weary, concrete-cracked parking lots and replacing splintered picnic tables.
SENIORS
Governor Signs Medicaid Reform Legislation. State Representative Tom Demmer joined a bipartisan and bicameral group of lawmakers on Monday as Governor JB Pritzker signed Medicaid reform legislation that will improve transparency, access, and the overall effectiveness of Illinois’ health care system. Demmer, the House Republicans’ leading voice on health care issues, was the Chief House Co-Sponsor of the bill.
“I’ve long believed that our best legislation comes from bipartisanship, and SB 1321 is the product of a dedicated bipartisan work group who listened to a wide range of concerns and suggestions,” said Demmer.“Together we worked to find solutions and make progress toward improving the Medicaid program that serves millions of Illinoisans. I appreciate the work from the Governor’s office, state agencies, and my fellow legislators on this important bill.”
Specifically, SB 1321 enables key state agencies, including the Department on Aging, Department of Healthcare and Family Services, Department of Human Services and Department of Innovation and Technology, to lead one of the most aggressive cross-agency efforts in Illinois history to expand access to health care for low-income Illinoisans, and eliminate a large application backlog. The new law also centralizes claims from providers to Managed Care Organizations (MCOs) in order to increase transparency and accountability.
Additionally, SB 1321 requires MCOs to make timely payments within 30 days and make expedited payments to health care providers serving large Medicaid populations, including long-term care facilities where more than 80 percent of residents receive Medicaid, safety-net hospitals and government-owned providers. The new law also mandates a full review of the Medicaid redetermination process to identify changes that will allow more patients to be renewed automatically and ensure patients are maintaining the highest continuum of care possible.
“More than three million Illinoisans rely on Medicaid to meet their health care needs, and these reforms will go far in addressing access and adequacy issues,” Demmer added. “I was proud to be a part of the work group that brought these reforms forward.”
ILLINOIS STATE FAIR
Illinois State Fair opens in Springfield. This is the 162nd running of Illinois’s chief agricultural showcase event. The Illinois State Fair opened on the 366 acres of the State Fairgrounds on Thursday, August 8. A focus of this year’s Fair is on the Fairgrounds Coliseum, the recently rebuilt 100-year-old performance showplace for horses and draft animals. The State Fair features an extravaganza of concerts, rides, competition showings, festival food, and events. More than 50 new vendors have been added to the lineup of small businesses selling food and crafts. The Illinois Department of Natural Resources (IDNR) has reopened its Conservation World venue, with 35 additional attractions, tents, and food vendors, within the Fairgrounds. An admission fee is charged. Next week marks the final days of the Fair, which will close August 18. Attention will then shift to the DuQuoin State Fair in Southern Illinois, which will meet from August 23 until September 2.
WEEK IN REVIEW
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