CENTER FOR TAX AND BUDGET ACCOUNTABILITY
70 E. Lake Street  Suite 1700  Chicago, Illinois 60601  direct: 312.332.1049  Email: rmartire@ctbaonline.org
State of Illinois Budget Outlook
For:
Saturday, November 13, 2010
Lutheran Social Services of Illinois
Lutheran School of Theology
Hyde Park, Illinois
Presented by:
Ralph Martire
Executive Director
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© 2010, Center for Tax and Budget Accountability
Appropriations by Major Category, All Funds, FY 2011
Healthcare and Family
Services, 32.20%
Economic
Development, 10.80%
Human Services, 17.60%
Government
Services, 8.80%
Public Safety, 4.70%
Education, 24.30%
Environment and
Business
Regulation, 1.60%
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© 2010, Center for Tax and Budget Accountability
Appropriations by Major Category, General Revenue Fund, FY 2011
Healthcare and Family
Services
32.3%
Economic Development
0.8%
Government Services
4.0%
Human Services
23.1%
Public Safety
5.9%
Environment and
Business Regulation
0.2%
Education
33.7%
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© 2010, Center for Tax and Budget Accountability
THE REAL IMPACT: $4.4 BILLION LOST
Amount by Which Illinois General Fund State Spending on Human
Service Programs Falls Short of Keeping Pace with Inflationary
Costs and Population Growth From FY2002 to FY2010
FY03
FY04
FY05
FY06
FY07
FY08
($200)
($393)
($413)
($454)
($434)
($300)
($270)
($33)
($68)
($500)
($600)
($700)
FY2010
($377)
($384)
($457)
($400)
FY09
($168)
($100)
(millions)
THE REAL IMPACT
$0
($105)
By failing to account for annual inflationary costs,
Illinois cut human service funding in real terms by
a cummulative $3.1 B from FY2003 to FY2010. By
failing to account for population growth, Illnois
further shorted human service funding by
approximately $1.4 B from FY2003 to FY2010. In
total, state funding of human services over this
period was approximately $4.4 B less than what
was needed to maintain FY2002 service levels,
adjusting for inflation and population growth.
($145)
($186)
($310)
($235)
($800)
Note: Commission on Government Forecasting and Accountabiity, Budget Summaries for FY2002 to FY2010. Final General Revenue appropriations for the Illinois
Departments of Aging, Children & Family Services, and Human Services. Appropriations shortfalls necessary to maintain real value of FY2002 appropriation based on
Mid-West CPI (MWCPI). MWCPI for FY2010 is assumed to be 0%, in all likelihood understateng the shortfall. Population growth estimate from Illinois Department of
Commerce and Economic Opportunity.
Key: Red Bar - MWCPI Shortfall; Blue Bar - Population Adjustment Shortfall
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© 2010, Center for Tax and Budget Accountability
The Real Problem:
Illinois Structural Deficit
Assuming FY2000 to FY2008 Economic Conditions
and FY 2000 Balanced Budget Appropriation
(adjusted for Inflation and Population Growth)
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© 2010, Center for Tax and Budget Accountability
Revenues by Source, All Funds, FY 2011
Federal Aid, 34.0%
Lottery Riverboat
Gambling, 3.1%
Individual Income
Tax, 19.4%
Motor Fuel Tax, 2.6%
Public Utility Tax, 3.7%
Other Receipts, 23.8%
Sales Tax, 13.5%
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© 2010, Center for Tax and Budget Accountability
Revenues by Source, General Revenue Fund, FY 2011
Federal Aid
22.0%
Lottery Riverboat
Gambling
3.9%
Public Utility Tax
4.2%
Individual Income Tax
31.6%
Other Receipts
9.7%
Corporate Income Tax
5.7%
Sales Tax
22.9%
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© 2010, Center for Tax and Budget Accountability
Estimated FY2011 Net Revenue
From CTBA Recommendations
(All dollars in Millions)
Revenue Source/Adjustment
Revenue Impact
Increase Personal Income Tax Rate from 3% to 5% (Net of Refund Fund)
$5,806
Amount Local Government Distributive Fund (LGDF)
(-$581)
New General Fund Revenue from Personal Income Tax Rate Increase from 3% to 5% on Existing Income
Tax Base
$5,225
Add Retirement Income of Filers with over $50,000 in Adjusted Gross Income (top 18% in income of such
filers) Into Income Tax Base at 5% rate (Net of Refund Fund and LGDF)
$905
Net New Revenue from Personal Income Tax Changes
$6,130
Increase Corporate Income Tax Rate from 4.8% to 8% (Net of Refund Fund)
$937
Corporate Income Tax Revenue to LGDF
(-$94)
Net New Corporate Income Tax Revenue
$843
Revenue from Sales Tax Base Expansion
$2,400
GROSS NEW REVENUE TO GENERAL FUND
$9,373
Create Refundable Income Tax Credit to Offset Income and Sales Tax Increases for Bottom 60% in
Household Income
(-$750)
Double Residential Property Tax Credit from 5% to 10%
(-$493)
Increase State EITC from 5% to 20% of Federal
(-$315)
NET TAX INCREASE/REVENUE TO GENERAL FUND
$7,815
i CTBA Analysis of Commission on Government Forecasting and Accountability Data, FY 2011.
ii William, Erica and & Nicholas Johnson. November 12, 2009. “How Much Would an Earned Income Tax Credit Cost in
2010?” Center for Budget and Policy Priorities.
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© 2010, Center for Tax and Budget Accountability
Further Information
For More Information:
Center for Tax and Budget Accountability
www.ctbaonline.org
Ralph M. Martire
Executive Director
(312) 332-1049
rmartire@ctbaonline.org
Ron Baiman, Ph.D.
Director of Budget and Policy Analysis
(312) 332-1480
rbaiman@ctbaonline.org
Yerik Kaslow
Research Associate
(312) 332-2151
ykaslow@ctbaonline.org
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© 2010, Center for Tax and Budget Accountability