FY 2016 and FY 2017 Stopgap Budget Analysis

July 15, 2016

Illinois’ Stopgap Budget does not equal Balanced Budget: Even though the Illinois General Assembly passed, and the Governor signed, a stopgap budget implementation bill on June 30th, the dust continues to settle and careful analysis by multiple sources continues. As the word ‘stopgap’ implies, this is not the final solution to the problem, and the ultimate fixes to Illinois’ fiscal problems still must be addressed in the coming months. The stopgap measure provides for the funding of higher education, human services, state agency operations, and various capital projects for fiscal year 2016 and six months of fiscal year 2017 which started July 1st. Since the measure passed, analysts believe the stopgap over-promises in the first six months of the current fiscal year because the state won't have enough revenues to pay all its outstanding bills which are now unofficially estimated to total at least $10 billion by the end of December, when the stopgap plan expires.

Rep. Greg Harris, one of the budgeteers, provided a brief synopsis of key pieces of the stopgap package, as well as links to the actual legislative language.

This is not a complete listing; you may see the entire 804-page appropriation bill here:
• Removes the obligation to repay approximately $450 million in interfund borrowing otherwise due by Dec. 31 of this year, thereby “creating” General Revenue Fund (GRF) which can be used for appropriation and allows refinancing of certain existing debt at lower interest rates, and freezes Cost of Living Adjustments (COLAs), per diems for the General Assembly and constitutional officers.
ACA Hospital Access Payments: Generates approximately $800 million dollars of new revenue for the Illinois Medicaid program, including approximately $400 million in hospital assessments and $400 million in new federal matching dollars, $150 million for other purposes and $3 million for the Illinois Poison Control Center. Human Services: The vast majority of items in Medicaid and the departments of Healthcare and Family Services, Aging, Children and Family Services and Human Services will continue to be paid pursuant to Consent Decree and court orders. There is an additional $667 million added for programs and items not covered by consent decrees.
• Elementary and Secondary Education: Increases General State Aid by $361 million, and a hold harmless from the Governor’s FY17 proposal; an additional $250 million “equity grant” for high poverty school districts (including CPS), $12 million to the Chicago Teachers Pension Fund.
• Higher Education: Approximately $1 billion, including between 82%-95% for all State Universities, based on a funding formula; $151 million for MAP grants (approximately 81% of an annual appropriation); approximately $149 million for community colleges, $5 million for the Illinois Math and Science Academy, as well as other items.
• Agency Operations: $275 million from the Budget Stabilization Fund, $448 million in GRF (from the borrowing forgiveness mentioned above) and $31 million from the Commitment to Human Services Fund are appropriated to the operations of all the agencies of state government. This is in addition to personnel costs which are being paid pursuant to court order.