Illinois state budget and finances

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Illinois budget and finances

General information

Budget calendar: Annual

Fiscal year: 2017

State credit rating: BBB- (as of 2017)

Current governor: J.B. Pritzker

Financial figures

Total spending (state and federal funds): $55,978,000,000 (estimated 2016)

Per capita spending: $4,373 (estimated 2016)

Total state tax collections: $38,907,220,000 (2016)

Per capita tax collections: $3,039 (2016)

State debt: $64,221,381,000 (2014)

Per capita state debt: $5,002 (2014)

State budget and finance pages • Total state expenditures • State debt • Tax policy in Illinois

Note: In comparing dollar amounts across the states, it is important to note that the cost of living can differ from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis. This article, which is updated on an annual basis, was last updated in June 2017. It contains information from several sources; consequently, the currency of the information can vary from source to source.

In Illinois, as in other states, lawmakers and public officials are elected in part to manage the state's finances. This includes generating revenues (money coming into the state from various sources) and approving expenditures (the money spent on governmental functions and servicing state debt). State budgets are complex and fluid, as they depend on anticipated revenues and planned expenditures, which may alter over the course of a fiscal year. If revenues do not keep pace with expenditures, states generally have to raise taxes, cut services, borrow money, or a combination of the three. State budget decisions are also influenced by policy decisions at the national level, such as the Affordable Care Act or energy and environmental regulations, and issues at the local level, such as crime and the quality of education.

HIGHLIGHTS

Between fiscal years 2015 and 2016, total government spending in Illinois decreased by approximately $7.5 billion—from $63.5 billion in fiscal year 2015 to an estimated $56.0 billion in 2016. This represents an 11.9-percent decrease.

In Illinois in fiscal year 2015, 47.6 percent of total tax revenues came from sales taxes and gross receipts. Income taxes accounted for 44.1 percent of total state tax collections.

Education accounted for 17.4 percent of state expenditures in fiscal year 2015, while 27.1 percent went to Medicaid.

Definitions

The following terms are used to describe a state's finances:

• Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
• Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
• State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
• The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
• State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
• Federal funds are "funds received directly from the federal government."
• Total spending is calculated by adding together the totals for state and federal funds used for expenditures.

Revenues

2016 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.

State tax collections by source ($ in thousands), 2016
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes	Total	2016 population	Per capita collections
Illinois	$60,814	$18,524,265	$2,745,949	$17,173,986	$402,206	$38,907,220	12,801,539	$3,039
Indiana	$10,699	$10,608,207	$714,634	$6,252,533	$1,885	$17,587,958	6,633,053	$2,652
Missouri	$30,892	$5,302,264	$547,326	$6,352,437	$12,250	$12,245,169	6,093,000	$2,010
Wisconsin	$170,537	$7,721,707	$1,151,656	$8,473,461	$90,372	$17,607,733	5,778,708	$3,047
United States	$18,364,298	$442,909,995	$52,164,396	$392,286,910	$24,538,146	$930,263,745	322,762,018	$2,882.20
Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017

The table below lists 2016 tax collections by source as percentages of total collections. About 47.6 percent of Illinois' total state tax collections came from sales taxes and gross receipts.

State tax collections by source (as percentages), 2016
State	Property taxes	Sales and gross receipts	Licenses	Income taxes	Other taxes
Illinois	0.2%	47.6%	7.1%	44.1%	1.0%
Indiana	0.1%	60.3%	4.1%	35.6%	0.0%
Missouri	0.3%	43.3%	4.5%	51.9%	0.1%
Wisconsin	1.0%	43.9%	6.5%	48.1%	0.5%
Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed April 4, 2016

Federal aid to the state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, mainly in the form of grants for such things as Medicaid, education, and transportation. In 2014, federal aid to the states accounted for roughly 31 percent of all state general revenues. Federal aid varies from state to state. For example, Mississippi received approximately $7.2 billion in federal aid in 2014, accounting for about 41 percent of the state's general revenues, the highest percentage of all of the states. By contrast, North Dakota received about $1.5 billion in federal aid in 2014, or just 17 percent of the state's general revenues, the lowest percentage in the nation.

The table below notes what share of Illinois’ general revenues came from the federal government in 2014. That year, Illinois received approximately $17.9 billion in federal aid, 26.5 percent of the state's general revenues. Taking into consideration the state's 2014 population, this came out to about $1,387 in federal aid per capita. Figures from surrounding states are provided for additional context.

Federal aid to state budgets, 2014
State	Total federal aid ($ in thousands)	Federal aid as a % of general revenues	Ranking (by % of general revenues)	Est. 2014 population	Aid per capita
Illinois	$17,851,826	26.5%	42	12,867,544	$1,387
Indiana	$10,974,721	33.0%	23	6,595,233	$1,664
Missouri	$10,128,483	38.0%	6	6,060,930	$1,671
Wisconsin	$9,015,403	27.8%	38	5,758,377	$1,566
Sources: United States Census Bureau, "2014 State and Local Government Finances," accessed June 26, 2017 Note: Per-capita figures were generated by Ballotpedia by dividing total federal aid for the state by the estimated population of that state in 2014.

Spending

Estimated 2016 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2016 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.

The total estimated government spending in Illinois in fiscal year 2016 was $56.0 billion.

Total estimated state spending, FY 2016 ($ in millions)
State	State funds	Federal funds	Total spending	Population	Per capita spending
Illinois	$39,168	$16,810	$55,978	12,801,539	$4,373
Indiana	$18,958	$12,448	$31,406	6,633,053	$4,735
Missouri	$16,951	$7,677	$24,628	6,093,000	$4,042
Wisconsin	$34,874	$10,796	$45,670	5,778,708	$7,903
Per-capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census Bureau estimates. Source: National Association of State Budget Officers, "State Expenditure Report (Fiscal 2014-2016)," accessed June 26, 2017

Spending by function

See also: State spending by function as a percent of total expenditures

State spending in Illinois can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2015 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.

In fiscal year 2015, other spending accounted for 43.7 percent of Illinois' total expenditures.

State spending by function as a percent of total expenditures, FY 2015
State	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Trans- portation	Other
Illinois	14.0%	3.4%	0.3%	27.1%	2.4%	9.0%	43.7%
Indiana	30.0%	6.6%	1.4%	31.2%	2.6%	5.3%	22.7%
Missouri	22.9%	4.8%	0.6%	36.1%	2.8%	8.2%	24.5%
Wisconsin	16.0%	14.5%	0.3%	19.3%	2.7%	6.3%	40.8%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

Spending trends

The table below details the spending trends in Illinois in previous years. Figures are rendered as percentages, indicating the share of the total budget spent per category.

Spending by function from 2010 to 2015 (as percentages)
Year	K-12 education	Higher education	Public assistance	Medicaid	Corrections	Transportation	Other
2015	14.0%	3.4%	0.3%	27.1%	2.4%	9.0%	43.7%
2014	14.6%	4.1%	0.3%	26.1%	2.4%	9.3%	43.1%
2013	13.3%	3.7%	0.3%	23.8%	2.1%	8.4%	48.4%
2012	15.8%	5.5%	0.1%	19.7%	2.2%	8.5%	48.1%
2011	18.9%	5.6%	1.0%	32.9%	2.9%	11.4%	27.4%
2010	18.2%	4.5%	0.2%	23.6%	2.0%	8.1%	43.3%
Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."

State debt

See also: Illinois state debt

State debt refers to any debt owned by a state government. Debt may include any financial obligations a state has that have not been paid, such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees. According to the U.S. Census Bureau, Illinois had a debt of $64,221,381,000 in fiscal year 2015. The state debt per capita was $5,002. This ranked Illinois fifth among the states in debt and 11th in per capita debt. The total state debt owned by the 50 states was $1.15 trillion with a per capita debt of $3,582.

Economic indicators

See also: Economic indicators by state

Illinois' GDP increased by 1.2 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.

In September 2014, Illinois had an unemployment rate of 6.6 percent, higher than any of its neighboring states. Most residents in Illinois earned incomes at least 400 percent above the federal poverty level, with a median annual household income of $54,083.

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state
State	Distribution of population by FPL* (2013)				Median annual income (2011-2013)	Unemployment rate		Total GSP (2013)†
	Under 100%	100-199%	200-399%	400%+		Sept. 2013	Sept. 2014
Illinois	13%	17%	31%	39%	$54,083	9.1%	6.6%	$720,692
Indiana	12%	23%	31%	35%	$48,178	7.3%	5.7%	$317,102
Iowa	11%	18%	35%	36%	$53,364	4.5%	4.6%	$165,767
Wisconsin	11%	15%	31%	42%	$54,205	6.6%	5.5%	$282,486
United States	15%	19%	30%	36%	$52,047	7.2%	5.9%	$16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government." † Median annual household income, 2011-2013. ‡ In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state." Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

Budget process

State documents and agenciesBelow are links to official Illinois budget and financial documents. The first is the state's Comprehensive Annual Financial Report (CAFR). A CAFR is a detailed presentation of a government entity's financial condition. This includes fiscal activities and balances for a fiscal year. The second link is to the state's relevant budget agency or office. Illinois CAFR Illinois budget agency

Illinois operates on an annual budget cycle. The sequence of key events in the budget process is:

1. In September and October of the year preceding the start of the new fiscal year, the governor sends budget instructions to state agencies.
2. In October and November, agencies submit their budget requests to the governor.
3. Budget hearings with the public are held from February through May.
4. On the third Wednesday in February, the governor submits his or her proposed budget to the Illinois General Assembly.
5. The General Assembly passes a budget in May.

Illinois is one of 44 states in which the governor has line item veto authority.

The governor is constitutionally required to submit a balanced budget. In turn, the legislature must pass a balanced budget.

Agencies, offices and committees

The following standing committees in the Illinois General Assembly deal with budget and finance matters:

1. Appropriations I Committee, Illinois State Senate
2. Appropriations II Committee, Illinois State Senate
3. Appropriations-Elementary & Secondary Education Committee, Illinois House of Representatives
4. Appropriations-General Service Committee, Illinois House of Representatives
5. Appropriations-Higher Education Committee, Illinois House of Representatives
6. Appropriations-Human Services Committee, Illinois House of Representatives
7. Appropriations-Public Safety Committee, Illinois House of Representatives
8. Revenue & Finance Committee, Illinois House of Representatives

The Illinois Treasurer is the state's chief financial officer and is responsible for overseeing the state's funds, managing investments and disbursing monies. The treasurer is elected every four years and is a partisan position.

The Illinois Comptroller maintains the state's fiscal accounts and oversees withdrawals from and deposits into the state's accounts. The comptroller is elected every four years and is a partisan position.

Public Interest Research Group 2016 report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2016. The report, entitled "Following the Money," measured how transparent and accountable state websites were with regard to state government spending. According to the report, Illinois received a grade of A- and a numerical score of 93, indicating that Illinois was "Leading" in terms of transparency regarding state spending.

Noteworthy events

Credit rating downgrade

On June 1, 2017, Stanford and Poor's Global Inc. and Moody’s Investors Service, credit rating agencies, downgraded Illinois’ credit rating. S&P also said that it might downgrade the state's credit rating further if the state failed to adopt a budget. The downgrade placed the state’s credit rating at one step above a junk rating (a low rating which indicates the state is a high risk investment). At the time of the downgrade, the state had not passed a budget in two years due to disagreements between the Democratic state legislature and Republican Governor Bruce Rauner. According to S&P analyst Gabriel Petek, “the rating actions largely reflect the severe deterioration of Illinois' fiscal condition, a byproduct of its stalemated budget negotiations, now approaching the start of a third fiscal year.” Prior to this downgrade, Illinois' credit rating was the lowest in the country. If downgraded again, Illinois would become the first state to receive a junk rating from a credit agency.

On July 6, 2017, the Illinois General Assembly passed a $36 spending plan and $5 billion tax increase. The legislature overrode Rauner's veto to pass the budget, which ended the two-year budget impasse. Moody's Investors Service said they may downgrade Illinois' rating despite the budget. On July 5, after the state Senate voted to override the veto, Moody's wrote that, "so far, the plan appears to lack concrete measures that will materially improve Illinois' long-term capacity to address its unfunded pension liabilities." S&P, in response to the budget passing, removed the state from its credit watch for a potential downgrade.

On October 9, 2017, S&P maintained the state's BBB- rating following the state's plan to sell $6 billion in bonds. The agency told the state that it still faces fiscal issues that could push the rating down further.

2017 budget

• In 2017, disagreements between Governor Bruce Rauner (R) and the Democratic-controlled Illinois General Assembly over the state budget drew national attention when S&P Global Inc. and Moody’s Investors Service downgraded Illinois' credit rating and some government services, including transportation projects and the state lottery, were on the verge of being shut down. Rauner and the legislature failed to come to an agreement on a budget during the regular session, which ended on May 31, leading Rauner to call a special session from June 21 to June 30, the last day of the 2017 fiscal year. A budget agreement was not reached before June 30, meaning Illinois entered the 2018 fiscal year without a budget.

• A budget was passed on July 6, 2017, when the legislature overrode Rauner's vetoes of a $36 billion spending plan and a $5 billion tax increase. In the votes in the Illinois House, 10 Republicans joined the Democrats in voting for the overrides. Up to this point, Illinois had not passed a budget since 2014, when Pat Quinn (D) served as governor. According to The Associated Press, two years was the longest any state had gone without a budget in recent memory.

• Important issues surrounding the budget debate included differences in Democratic and Republican plans concerning income tax rate increases, a property tax freeze, changes to regulations related to injured worker compensation, and the state's pension liabilities. The budget deal that eventually passed increased the personal income tax rate from 3.75 to 4.95 percent, increased the corporate tax rate from 5.25 to 7 percent, and left overall spending at $36 billion for fiscal year 2018.

• The budget had an impact beyond the state, costing Wisconsin millions from its state budget. This was because, as of July 2017, Illinois and Wisconsin had a reciprocity agreement to account for the greater number of Wisconsinites that cross the state border to work in Illinois, but not pay state income taxes, than Illinoisans who came to work in Wisconsin. With higher incomes taxes in Illinois, Wisconsin's reciprocity payment increased.

• Coverage of the budget negotiations centered on the relationship between Rauner and Speaker of the House Michael Madigan (D). As of July 6, 2017, Rauner was seeking re-election as governor in 2018 and Madigan was defending the Democrats' 67-51 majority in the state house. Rauner and Madigan disagreed on a number of issues including whether the income tax increases should have been permanent.

Education funding

• $8.2 billion in state aid for public schools was included in the budget agreement. However, language was also included that said $6.76 billion of the aid had to be dispersed through a funding formula that calculated state aid for school districts based on the cost of strategies that supporters say are proven to improve student performance. The funding for districts could be increased by elements such as income, property wealth, and English-learning needs. On August 29, the Illinois General Assembly passed a bill that included the necessary funding formula. Read more the timeline of events below.

• On May 31, the Legislature passed SB 1, which contained the necessary funding formula. Gov. Rauner indicated that he would veto the bill, causing Senate President John Cullerton (D) to hold it in the chamber. According to Rauner's office, the governor would not support the bill because he believed it would benefit Chicago at the expense of other areas of the state.

• On July 24, Rauner called the General Assembly into a special session starting July 26 to address education funding. He had set a deadline of 12:00pm CT on July 24 for Cullerton to send him SB 1 so that he could use his amendatory veto power to make unspecified changes to the provisions he disagreed with. When the deadline passed without Cullerton sending him the bill, he called the special session. On July 31, the last day of the special session, SB 1 was transmitted to Rauner.

• Rauner issued an amendatory veto on August 1, rewriting SB 1 to remove a $250 million block grant to Chicago Public Schools and changing how the funding formula determines state aid. According to the Illinois State Board of Education, Rauner's changes would result in a $463 million decrease in funding for Chicago Public Schools in the 2017-2018 school year. The Illinois Senate met on August 13 and overrode the veto by a 38-19 vote, with all Democrats and Republican Sam McCann voting to override. The Illinois House was scheduled to vote on the override on August 23, but Speaker Madigan cancelled the vote on August 22. He said that progress had been made in negotiations with Rauner and Republicans.

• On August 24, the four leaders in the General Assembly— Madigan, Cullerton, Senate Minority Leader Bill Brady (R), and House Minority Leader Jim Durkin (R)— announced that they had reached a compromise agreement on SB 1. According to Politico, the agreement kept the funding formula from SB 1 and included $75 million in subsidies for private school education. On August 28, 2017, the Illinois House rejected the agreement in a 46-61 vote. The chamber next voted on an override of SB 1. After the override vote received just 63 of the 71 votes it needed to pass, the chamber took up the compromise bill again and passed it 73-34. On August 29, the Illinois Senate passed the compromise bill by a 38-13 vote. Gov. Rauner signed the bill into law on August 31.

• According to The Chicago Sun-Times, some schools in low-income areas cannot remain open without the state money that is allocated by the budget. In addition to the state aid in the budget, education funding in Illinois also comes from property taxes levied by local governments. Areas that pay more in property taxes can spend more on schools and are less dependent on state aid.

Budget and finance ballot measures

Voting on state and local government budgets, spending, and finance
Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
Local City budgets County budgets Spending limits School budgets

See also: Spending and finance on the ballot and List of Illinois ballot measures

Ballotpedia has tracked the following ballot measures relating to state and local budget and financial matters in Illinois.

1. Illinois Transportation Taxes and Fees Lockbox Amendment (2016)

Budget and finance legislation

The following is a list of recent budget and finance bills that have been introduced in or passed by the Illinois state legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.

Recent news

The link below is to the most recent stories in a Google news search for the terms Illinois budget. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Illinois state budget and finances - Google News

Contact information

Office of Management and Budget
401 South Spring
603 Stratton Building
Springfield, Illinois 62706
Email: [email protected]
Phone: 217-782-4520
Fax: 217-524-4876

See also

• Historical Illinois budget and finance information
• Tax policy in Illinois
• Illinois government sector lobbying
• Illinois public pensions
• Governor of Illinois
• Illinois State Senate
• Illinois House of Representatives
• Illinois State Legislature