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Election produced the first politically divided government in over a decade Governor-elect ran on shaking up the status quo Few, if any, budgeting tricks.

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Presentation on theme: "Election produced the first politically divided government in over a decade Governor-elect ran on shaking up the status quo Few, if any, budgeting tricks."— Presentation transcript:

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2 Election produced the first politically divided government in over a decade Governor-elect ran on shaking up the status quo Few, if any, budgeting tricks remain. It’s time to pay the piper Opportunity (necessity) for bipartisan cooperation/solutions

3 Framework Have not made spending changes to prepare for income tax phase down Does not make repayment on over $6 billion in old bills Revenue estimate increased magically ($857 Million) to allow for higher spending levels Budget built on borrowing and fund sweeps which must be repaid Ignores best practices to grow the economy and tax revenue

4 Borrow money and call it revenue Ignore Constitutional mandate to spend only the available revenue: inflate estimated revenue, under value costs of programs Underfunded or skipped pension payments to expand other programs Continue to manage cash flow on the backs of suppliers – unpaid bills continue to grow, payments can take over a year Fund expansion in healthcare and pensions at expense of education….everything else

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9 Higher Income Tax Rates Have Generated $31.5 Billion Source: Commission on Government Forecasting and Accountability. Fiscal Year 2015 Budget Summary

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11  The Chicago Civic Foundation FY15 Budget analysis predicts a General Funds backlog of $6.4 billion at the end of FY15

12 Current fiscal challenges have been caused by: a.) not paying for benefits offered, b.) dishonest/unconstitutional budget practices, c.) shifting costs to “tomorrow” Solution to fiscal problems can only be achieved by major structural changes and honest budget practices

13  Don’t spend more than realistic revenue projections  Fully implement enacted Medicaid reforms to ensure all individuals enrolled are truly eligible  Update operating practices for efficiency, reduced cost  Give stability/predictability to taxes and fees  Set priorities; budget for results

14  Establish primary causation for worker’s compensation  Make Research and Development Tax Credit permanent  Abolish corporate franchise tax  Extend, permanently, the manufacturers’ purchase credit  Allow fracking with oversight  Expand Enterprise Zones authorization

15  Reduce costs of establishing an LLC  Expand: STEM education, worker skill training grants, business coaching  Faster permit reviews  Reasonable regulations

16 Source: Regional Economics Applications Laboratory, Department of Economics, University of Illinois. Total Non-Farm EMPLOYMENT GROWTH RATE National Midwest Illinois National RMWIL

17  Revenue will decrease by $3.5 billion as personal income tax phases back to 3.75% and corporate to 5.25%  Expenses for pension, underfunded programs, healthcare, required repayments will increase by over $2.5 billion  Unpaid bills will total over $6 billion  Tough union contract negotiations  Pension reform revisited  Major restructuring of programs

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19 Source: Commission on Government Forecasting and Accountability. Economic and Revenue Outlook, February 19, 2014.

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21 21 Medicaid enrollment surpasses 3.2 million individuals in 2015

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