Analysis of Illinois’ FY 2024 Enacted General Fund Budget
Release: August 31, 2023
On June 7, 2023, Governor Pritzker signed the General Fund Budget for FY 2024 into law (the “FY 2024 Enacted GF Budget”). This budget was markedly different than any previous one proposed by Pritzker and passed by the General Assembly—or any other Illinois governor and General Assembly dating back to Jim Edgar in the mid-1990s, for one, simple reason: Illinois’ General Fund is in the healthiest fiscal condition it has been for decades.
In fact, when it comes to the health of the state’s General Fund, things have changed dramatically since Governor Pritzker was first sworn into office. Back then in 2019, Governor Pritzker inherited an $8 billion backlog of unpaid bills from Governor Rauner’s Administration. That was significant, as it meant roughly 30 percent of all General Fund expenditures during Rauner’s final year as governor constituted deficit spending. Unfortunately, that was also nothing new, as Illinois had failed to produce anything close to a balanced budget in its General Fund at any time over the prior two decades plus.
Many of the structural fiscal flaws that created years of deficits remain in place. Which means Illinois decision-makers have the rare opportunity to consider reforming the state’s fiscal system not during a crisis—but while the General Fund is on an upward trajectory, with an eye toward building the capacity needed to sustain investments in core services over the long haul. The FY 2024 Enacted GF Budget analysis takes an in depth look at Illinois’ revenue and spending in the General Fund for the current fiscal year.
Analysis of Illinois' FY 2023 Enacted General Fund Budget
Release: July 1, 2022
Due to Illinois’ long-term, structural fiscal challenges, citizens of Illinois have grown accustomed to General Fund budgets that are focused on cutting, or limiting the cuts to, core services. Which is truly unfortunate, given that 95 percent of all General Fund expenditures on services go to the four core areas of Education, Healthcare, Human Services, and Public Safety. However this past April, the Illinois General assembly passed a General Fund budget for FY 2023 (the “FY 2023 Enacted GF Budget”) that was notably different from the vast majority of budgets passed into law over the last twenty-some odd years. That is because, rather than focus on cuts, the FY 2023 Enacted GF Budget calls for increasing year-to-year spending in every one of those four core service areas. This counters a trend of imposing real, inflation-adjusted cuts to all or most core services that goes all the way back to FY 2000. Moreover, the FY 2023 Enacted GF Budget—when considered in combination with the supplemental appropriations that were passed covering certain aspects of the FY 2022 Enacted General Fund Budget (the “FY 2022 Enacted GF Budget”)—includes a commitment to being fiscally responsible that is far more substantive than rhetorical. This also stands in stark contrast to most General Fund budgets enacted over the last two decades, which on the whole paid lip-service to being responsible—without implementing initiatives that strengthened Illinois’ fiscal system in any meaningful way.
Read the full report to learn more about the initiatives taken to offset economic challenges and decades of service cuts for Illinois.
Analysis of the Illinois FY 2023 Proposed General Fund Budget
Release: March 29, 2022
The FY 2023 Proposed General Fund Budget (the “FY 2023 GF Proposal”) makes one fact abundantly clear: spending on services is not driving the state’s fiscal problems. Big picture, Illinois’ ongoing disinvestment in General Fund services is harming communities across the state for one simple reason: over 95 percent of all such spending goes to the four, core areas of Education (including Early Childhood, K-12, and Higher Education), Healthcare, Human Services, and Public Safety. The FY 2023 GF Budget Proposal is a change of pace, reversing the trend of disinvesting in General Fund services by increasing spending for every single General Fund service category and making moves to get Illinois’ fiscal house in order.
The Impending Fiscal Cliff of FY 2025
Release: November 9, 2021
This past Spring when the General Assembly and Governor were developing a General Fund budget for Fiscal Year (“FY”) 2022, there was a significant amount of new revenue on the table. For instance, Illinois state government received around $11 billion in federal aid for General Fund use under the American Rescue Plan Act of 2021 (“ARPA”). ARPA came on the heels of various other federal relief initiatives that passed in 2020—most notably the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Despite both record federal assistance and a boost in state-based revenue, Illinois’ long-term fiscal challenges are significant. Unfortunately, in addition to being significant, the state’s fiscal shortcomings are also nothing new. And in FY 2025, Illinois will no longer have federal pandemic relief aid to support its General Fund. The revenue shortfall, however, will be more significant than that because of the structural deficit in the state’s General Fund. A structural deficit exists when annual revenue growth is not sufficient to cover the cost of providing the same level of public services from one fiscal year into the next, adjusting solely for changes in inflation and population, and assuming a normal economy.
Analysis of Illinois' FY 2022 Enacted General Fund Budget
Release: July 22, 2021
Shortly after the FY 2022 General Fund budget proposal in February 2021, the sobering economic forecast significantly changed. On March 11, 2021, President Joe Biden secured passage of the American Rescue Plan Act (“ARPA”). ARPA came on the heels of various other federal relief initiatives that passed in 2020—most notably the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). When considered together, nearly $12 billion in federal relief funding has been designated to cover state-level spending on core public services in Illinois over fiscal years 2021, 2022, 2023, and 2024.
Yet, despite obtaining the new federal and state funding, the FY 2022 Enacted General Fund Budget that passed into law (“P.A. 102-0017”) increases overall net spending on core services in FY 2022 by just $586 million over FY 2021 levels, in nominal, non-inflation-adjusted dollars. That is notable for one simple reason: the total year-to-year increase in General Fund spending is less in nominal dollars than the $655 million in new recurring revenue the state raised by eliminating the tax expenditures—and is significantly less than the $3.8 billion in federal relief funding the state utilized in FY 2022. Indeed, after adjusting for inflation, total net General Fund spending on services in FY 2022 is scheduled to be only $24 million—or 0.1 percent—more in real terms than it was in FY 2021.