And miles to go before it's balanced

Dye, Richard; Merriman, David F.

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https://hdl.handle.net/2142/110051 Copy

Description

Title

And miles to go before it's balanced

Author(s)

• Dye, Richard
• Merriman, David F.

Issue Date

2013-02-20

Keyword(s)

fiscal, balanced, policy, research, budget,

Abstract

This report discusses decisions that must be made now to set the state budget on a path toward balance. The authors observe that although progress has been made toward sustainability through policies implementing cost reductions (especially in health care) and increased revenue (through income and cigarette taxes), the state will need to focus on a longer-term strategy going forward. Because of a combination of past shortsighted decisions, difficult current economic conditions, long-term trends in health care costs, and the aging population, Illinois will face extraordinarily tough fiscal choices for the near future. Current spending levels cannot be sustained with currently available revenue. Compounding Illinois’ problems are the scheduled phase-out of the 2011 income tax rate increase, new GASB rules requiring accounting adjustments to the pension systems’ unfunded liabilities, federally required expansion of the Medicaid population due to health care reform, and the potential decline in federal support for non-health-care spending. Illinois has begun to take important steps to deal with its fiscal challenges. There have been significant actions to increase revenue (increases in income and cigarette taxes) and to trim spending (important cuts in Medicaid), and general spending restraint. Perhaps even more importantly, there have been major changes in the legislative processes—Budgeting for Results and the requirement that the governor present three-year projections of revenue and spending—and serious discussions about resolving the problem of unfunded pension liabilities. More action will be needed in the coming years.

Publisher

Institute of Government & Public Affairs

Type of Resource

text

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http://hdl.handle.net/2142/110051

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