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Illinois faced a combined budget gap of $11.5 billion for FY 2009 ($4.3 billion) and 2010 ($7.2 billion). ^[1] July 7, 2009. Gov. Pat Quinn and the Illinois General Assembly could not agree on cuts and raising income taxes, leading to Gov. Quinn’s veto on July 7, 2009 of budget measures, his second budget veto in a week.^[2] The stalemate and ongoing fiscal crisis is not anticipated to be solved by the General Assembly’s fall 2009 Veto Session that started on October 14. State Comptroller Dan Hynes claims Illinois currently has $3 billion in unpaid bills.^[3]

Anticipated revenues that served as the basis for the FY 2010 budget have dropped significantly. Gov. Quinn warned October 14, 2009 that the state faced an additional $900 million deficit as income tax revenues have fallen $850 million. Riverboat gambling is also $50 million below projections.^[4]

The Governor’s original proposed level of operating appropriations from all funds in fiscal year 2010 was $52.9 billion, compared to a fiscal year 2009 appropriation of $50.8 billion once additional spending related to the federal recovery is accounted for. This represents an increase of $2.0 billion over fiscal year 2009, nearly all of which is accounted for by increased federal funding related to the Recovery Act.^[5]

General Fund appropriations for fiscal year 2010 are $28.4 billion. After taking in to account additional spending in fiscal year 2009 related to Federal Recovery. The fiscal year 2010 General Funds appropriations actually decline from $29.8 billion in fiscal year 2009 to $28.4 billion in fiscal year 2010. ^[6]

Fiscal Year 2010 Operating Appropriations by Major Purpose Percentage of Total: ^[7]

All Funds

• Healthcare & Family Services 29.8%
• Education 27.3%
• Human Services 16.8%
• Economic Development & Infrastructure 10.2%
• Government Services 9.3%
• Public Safety 4.9%
• Environment & Business Regulation 1.6%

General Funds

• Education 38.2%
• Healthcare & Family Services 30.8%
• Human Services 21.3%
• Public Safety 5.2%
• Government Services 3.7%
• Economic Development & Infrastructure 0.6%
• Environment & Business Regulation 0.3%

The Illinois state government appropriated $67,693,357,273.26 to be spent in the 2007 fiscal year.^[8]

Fiscal Year	General Funds Expenditures	% Change from Previous Year
1999	$21,527,000,000[9]	9.4%[9]
2000	$22,976,000,000[9]	6.7%[9]
2001	$24,583,000,000[9]	7.0%[9]
2002	$25,125,000,000[9]	2.2%[9]
2003	$24,861,000,000[10]	-1.0%[9]
2004	$26,365,000,000[11]	6.0%[11]
2005	$28,247,000,000[12]	7.1%[12]
2006	$28,452,000,000[13]	0.7%[13]
2007	$30,116,000,000[9]	5.8%[9]

[edit] Budget Background

Operating Appropriations by fund group FY 2009: ^[14]

• General Funds 53.7%
• Special State Funds 22%
• Federal Trust Funds 16.7%
• Highway Funds 4%
• Debt Service Funds 2.9%
• State Trust Funds 0.6%

The Illinois Constitution requires the governor to prepare and present a State budget recommendation for the state to the General Assembly. The Constitution also requires that the proposed budget be balanced and include recommended spending levels for state agencies, estimated funds available from tax collections and other sources, and state debt and liabilities. The Governor’s Office of Management and Budget (GOMB) estimates revenues in consultation with the Department of Revenue and GOMB subsequently develops budget recommendations that reflect the governor’s programmatic and spending priorities.

The Governor presents the Budget Address in February. After the Governor’s Budget Address, legislative review of the governor’s budget recommendations begins almost immediately with hearings before House and Senate appropriation committees.

Final approval of the budget usually occurs at the end of the legislative session, typically by the end of May. The Illinois Constitution requires a simple majority vote of the General Assembly for a bill passed on or before May 31 to take effect immediately. On or after June 1, a three-fifths super majority vote of the General Assembly is required in order for a bill to take effect for the upcoming fiscal year.

Once the General Assembly passes the budget, the governor must sign appropriation bills before funds can be spent. If the Governor chooses not to approve a specific appropriation, he may either veto a specific line item or reduce it. The rest of the appropriation bill is unaffected by these vetoes and becomes effective. Line items that have been vetoed or reduced must be reconsidered by the General Assembly during the fall session. The General Assembly may return an item to the enacted level by simple majority vote in both chambers in the case of a reduction veto and by a three-fifths super majority vote in the case of a line item veto. ^[15]

See Illinois state budget (2008-2009) for more details.

[edit] Accounting Principles

The Illinois Auditor General is William G. Holland. Since August 1992, William G. Holland has served as Auditor General of the State of Illinois. He was appointed by the General Assembly to a ten-year term commencing August 1, 1992. He was unanimously re-appointed to a second ten-year term, effective August 1, 2002.^[16] The Auditor General is a constitutional officer of the State of Illinois charged with reviewing the obligation, expenditure, receipt and use of public funds. The office issues approximately 150 post-audits of State agencies each year, reviewing an agency's financial records, compliance with State and federal laws and regulations, and program performance after the close of its fiscal year. Report digests (summaries) and full audit reports of released audits are available online. ^[17]

The Illinois State Comptroller is Daniel W. Hynes, who has had 3 terms since first elected in November of 1998. The Comptroller's Office was created by the Constitutional Convention of 1970 as an expanded replacement for the Office of the Auditor of Public Accounts.^[18]

The Institute for Truth in Accounting (IFTA) rates Illinois “Worst” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Illinois’ CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[19] Illinois’ CAFRs are published online by the Illinois State Comptroller.^[20]

Credit Rating	Fitch	Moody's	S&P
Illinois[21]	A	A1	AA-

Governor Pat Quinn joined with Attorney General Lisa Madigan and members of the Illinois Reform Commission on August 17, 2009 to sign bills to increase transparency and accountability in state government. The legislation strengthens the Illinois Freedom of Information Act (FOIA) and ensures the state’s boards and commissions are open and accessible to the public. The website makes the State’s expenditures and employee pay data available through a single, searchable portal: Accountability.Illinois.gov.^[22]

[edit] Pension Reform

According to Gov. Quinn, Illinois has $55 billion in unfunded pension obligations. ^[23] In an effort to avoid a further deficit, Quinn proposed restructuring state pensions for new hires. ^{[23] [24]} This restructuring involves increasing the retirement age for new workers and capping cost-of-living increases that are in line with other public retirement systems. ^[23] Quinn believes that taking these steps will reduce taxpayers' tax liabilities for te state pension by $162 billion over the next 36 years. ^[23]

In May 2009, Quinn abandoned his proposal to require public employees pay 2 percent more of their salary into their pensions after public employees protested.^[25]

[edit] Ethics Reform

In his first act as Governor, Pat Quinn enacted the Illinois Reform Commission. ^{[23] [26]} The board will examine ethics in state government and make recommendations to continue to keep government open and transparent. ^[26]

Gov. Quinn also announced the creation of a Taxpayer Action Board that will evaluate all state spending and taxes in an effort to "root out all waste and inefficiency". ^{[23] [26]}

[edit] Transparency Reform

On February 25, 2009, Gov. Quinn sent a letter to state agencies stating that requests under the Freedom of Information Act must be considered valid unless the law clearly requires the relevant information remain secret. ^[27] In his State of the Budget address, Quinn emphasized that his government is focused on making government more responsive to the people of Illinois. ^[23] He also stated that "sunshine is the best disinfectant" and referred to his implementation of the Illinois Sunshine Project, which will make Illinois government more open by providing information about government online. ^[23]

[edit] State Sales Tax Holiday

Gov. Quinn proposed a state sales tax holiday effective for 10 days during the month of August in an effort to give a break to families shopping for back-to-school items such as school supplies, clothing and footwear. ^{[23] [26]}

The sales tax holiday would be"paid for" by reducing the amount given to retailers to help them process and remit sales taxes back to the state.^[28]

[edit] Increasing Taxes

The Illinois Economic Recovery and Tax Reform Act of 2009 proposes to increase the individual income tax rate from 3% to 4.5% while tripling the amount of income shielded from income taxes for lower-income individuals. ^[24] Even with a higher personal exemption, a single taxpayer making $14,000 would see a tax hike. Couples making more than $28,000 also would have to pay more in taxes, as would families of three earning in excess of $42,000. A family of four making more than $56,000 would pay higher taxes under Governor Quinn's plan. ^[29]

It would also increase the corporate tax rate from 4.8% to 7.2%. ^[24] The Tax Foundation reports that Governor Quinn's corporate income tax increase would result in Illinois having the 4th highest combined corporate tax rate in the nation: "Currently, Illinois imposes a 4.8% corporate income tax, plus a 2.5% "replacement tax" also levied on corporate income. Quinn's plan would raise the 4.8% rate to 7.2%, while retaining the replacement tax, for a total rate of 9.7%."^[30]

The Tax Foundation also noted that the plan from Governor Quinn would sharply reduce the ranking of the state's business tax climate, moving it from the top half to the bottom half in the nation when it comes to "business-friendliness."^[31]

Tax economist Scott Moody estimates that the long-term loss associated with the personal income tax hike, in present value terms, will cost the Illinois economy $8.6 billion in lost economic output. To put this massive sum into perspective, the hidden cost of Governor Quinn's tax hike is the economic equivalent of taking all the tax revenue, for FY 2008, from the sales tax ($7.2 billion), cigarette tax ($350 million), liquor tax ($158 million), inheritance tax ($373 million), corporate franchise tax and fees ($225 million) and insurance taxes and fees ($298 million) and dumping that money into Lake Michigan.^[32]

[edit] Increasing Various Taxes and Fees

In addition to raising individual and corporate tax rates, the Illinois Economic Recovery and Tax Reform Act of 2009 would include the following measures:

• doubling the cost of a 4-year driver's license to $20; ^[24]
• increasing the $79 cost for license plates by $20; ^[24]
• increasing vehicle title fees; and ^[24]
• increasing the .98 cent sales tax on cigarettes by .50 cents. ^[24]

[edit] State budget websites and analysis

As of May 2009, the Illinois Office of Management and Budget website does not post copies of the budget proposals from previous fiscal years. This is unusual, given that many other states' budget offices to keep up archived copies of past budgets.^[33]

The Illinois Policy Institute posted the PDF budget books from 2005, 2006, 2007, 2008, 2009, and 2010.

According to the Illinois Policy Institute, Illinois ranks 48th in economic performance, doing better than Michigan and Ohio^[34]:

• 42nd in economic outlook. Neighboring Indiana and Missouri rank well ahead in terms of future opportunity, at 12th and 17th respectively.
• 44th in GDP growth, averaging only 3.83% over the last decade. Illinois GDP growth has declined since 1977 at a rate from 7.6% to 5.9%.
• 46th in debt burden. Illinois continues to spend government revenue growth on government expansion rather than funding past debt obligations, including pensions.
• 44th in personal income growth over the past decade, averaging at 3.83% while the U.S. average is 4.19%.
• 47th in employment growth from 1977 till 2006, ranking ahead of only Michigan, Ohio and Louisiana.
• 37th in improving its standard of living, growing at only 1.13% per year over the past decade. While Illinois ranks relatively high in standard of living (18th), the state continues to fall farther down the ranks.
• 48th in net migration, with over 727,150 people having left the state from 1997-2006.
• 7th highest in median property taxes paid.
• 14th highest overall tax burden in the nation.
• 9th highest in property tax burden.
• 4th highest gas tax burden (approximately 40 cents per gallon).
• 1st in sales tax burden (Chicago & Cook County).
• Illinois is shrinking in wealth, once ranking as high as 6th in per capita personal income and dropping to 18th today.
• The growth of the Illinois economy has lagged the rest of the country for each of the last three decades.

[edit] Legislation

• House Bill 35 is a reintroduction of Rep. Michael Tryon's 2008 transparency bill House Bill 4765. Illinois House Bill 35, a.k.a. the Illinois Transparency and Accountability Portal (ITAP) passed the Senate on May 15, 2009. This bill would require the Department of Central Management Services to create a website that would provide comprehensive state financial and tax information to the public. It was sent to Governor Pat Quinn on June 12, 2009.^[35]

• House Bill 4765 (introduced April 2, 2008) would require the state to create and maintain a Web site on state employees’ salaries, state contracts, state expenditures, state tax credits and revocations and suspensions of state professional licenses. Rep. Michael Tryon is the lead House sponsor of House Bill 4765, and Sen. Pamela Althoff is the lead Senate sponsor. Various groups and organizations have promoted this bill.^[36] HB 4765 was approved unanimously last year by the House of Representatives as House Bill 4765. However, it was never called for a vote in the Senate.

[edit] Government tools

As of March 2009, Gov. Pat Quinn launched Budget Illinois which summarizes the proposed budget for 2010, offers budget figures and also details a capital projects list including information on the recommended and actual appropriations and expenditures going forward. ^[26]

According to Joe Calomino, Illinois State Director of Americans for Prosperity, Illinois's

"current opaque spending process creates the perception, or possible reality, of legislators or bureaucrats using the state budget to fund unnecessary, wasteful, or even corrupt programs, confident that most Illinoisans will never know about it. Giving taxpayers the tools to understand where and how their money is being spent will make state government more accountable and reduce waste, fraud, and abuse."^[37]

However, thanks to leaders on the local level, transparency is spreading.^[38]

"Open Book" is a searchable database of state contracts and campaign contributions that is hosted by the Illinois State Comptroller. Also available from the Comptroller's Office is aggregate expenditure information that can be sorted in a variety of ways. Line-item information is not available.

House Bill 35 is a 2009 reintroduction of Rep. Michael Tryon's 2008 transparency bill House Bill 4765, and would require the state to create and maintain a Web site on state employees’ salaries, state contracts, state expenditures, state tax credits and revocations and suspensions of state professional licenses. HB 35 was sent to Governor Pat Quinn on June 12, 2009.^[39]

Some cities and school districts have put expenditures up online; a list of these transparent entities can be found here.

The following table is helpful in evaluating the level of transparency provided by "Open Book"andthe Comptroller's aggregate expenditure website.

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary	Exemption Level
Open Books							n/a
Comptroller's aggregate expenditure website							n/a

[edit] Limitations and Suggestions for Improvements

• Add a copy of the actual contracts to Open Book.
• Provide line-item spending information on the Comptroller's aggregate expenditure information website.

[edit] Support for creation of the database

Kate Campaigne with Illinois Policy Institute wrote a policy brief entitled "Illinois Government Needs An X-Ray Machine." She argued "educating both the public and legislators about how government spends tax dollars makes it easier to expose corruption and pay-to-play politics. Transparency allows people to connect the dots and see who is asking for money, who authorizes what spending, and who benefits from the funding. Unless government implements transparency and stops the waste, it cannot perform its core functions as well as it could."

Joe Calomino with Americans for Prosperity authored a pro-transparency opinion piece in the State Journal-Register.

[edit] Economic Stimulus Transparency

• The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[40]

• It is estimated that Illinois will receive at least $6.3 billion in federal funding.^[41]

• The economic recovery website for Illinois is available here.

[edit] Independent transparency sites

• The Illinois Policy Institute has launched an Independent transparency site, www.openillinois.org. IPI is hosting Open Illinois Week on February 23rd through February 27th, 2009. Read more about Open Illinois Week by clicking here.

[edit] Public employee salary information

The Chicago Sun Times offers this database of Cook County, Chicago and Illinois state employee salaries.

The Better Government Association offers this searchable database of selected public payrolls. The BGA database includes salaries of employees of the states of Illinois, Indiana, and Missouri, as well as several city and counties in northeastern Illinois.

This is a look at the Top 100 Paid Teachers in 2007. From Champion News.net.

A list of the salaries of employees of the University of Illinois is posted here.

Click here to find out information on salaries and pensions as provided by illinoisloop.org, an education website.

[edit] See Also

Illinois taxpayer-funded lobbying

[edit] External Links

• Model transparency legislation from the American Legislative Exchange Council is available at this link.
• Illinois Policy Institute
• OpenIllinois.org
• Illinois Office of Management and Budget
• Illinois State Government homepage
• Illinois Government News Network
• Illinois Government spending

[edit] Helpful budget links

• Office of the Governor, Pat Quinn
• Illinois State Budget
• Illinois Fiscal Year 2010 Budget
• Illinois Recovery
• Illinois State Budget Book Fiscal Year 2009
• The Governor's Office of Management and Budget prepares the Governor's annual state budget and advises the Governor on the availability of revenues and the allocation of those resources to agency programs.
• The Illinois State Comptroller provides a number of fiscal reports, including appropriations, bond indebtedness, annual reports, executive summaries, fee impositions, fiscal state of the state, and tax expenditure reports.

[edit] References

v • d • e State Budgets Cost of state transparency websites • State budget issues, 2009-2010 • Pubic employee salaries • States with spending online Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming •

	v • d • e State of Illinois Springfield (capital)
Transparency	Freedom of Information Act | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | Illinois school districts A - L | Illinois school districts M - Z | Evaluation of county websites | Evaluation of city websites | Evaluation of township websites | Evaluation of school district websites |
Government	Illinois State Constitution | Executive | House of Representatives | Senate |
Judiciary	Illinois Supreme Court | Circuit Court of Appeals | District Courts | Judicial Nominating Commission | Judicial news | Judicial activist organizations |
Ballot Measures	2008 ballot measures | School bond issues | Procedures for qualifying an initiative | Amending the constitution | History of direct democracy | Campaign finance requirements |