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The Fiscal Futures Project is dedicated to informing the public and policymakers about state budget transparency and long-term budget concerns. Three central elements are:
- The creation and maintenance of a comprehensive and consistently defined measure of the Illinois state budget.
- The capacity to project Illinois state spending and revenue streams into the future under current or alternative policies.
- The comparison of budget transparency issues across states--a search for best practices
The work of the Fiscal Futures Project is supported by a generous grant from the John D. and Catherine T. MacArthur Foundation.
Click here to read the Fiscal Futures Project's documentation (PDF).
The Latest from the Fiscal Futures Project
It is well known that Illinois pays higher interest rates on its bonds because investors view Illinois debt as more “risky” of default. This study shows that Illinois pays an interest rate premium on bonds in excess of its actual default risk due to its poor fiscal reputation. Click on the link above for the full report (PDF). A one-page fact sheet on the issue can be found here (PDF).
In this report, The Fiscal Futures Project analyzes the changes to Illinois pension law made in December 2013, and find that the law--should it survive a constitutional challenge--will have very little effect on Illinois' long-term budget deficit. Despite the changes, Illinois will still have a structural imbalance of $14 billion in 2025. The link above is a PDF of the report. (Revised on January 30 to reflect most recent data.)
Peering Over Illinois' Fiscal Cliff: New Projections from IGPA's Fiscal Futures Model
The Fiscal Futures Project uses a long-term consolidated budget model to make projections of the state's fiscal situation into 2025. They look at scenearios in which the 2011 tax increases expire as planned, and what would occur if the increases were made permanent. The researchers also examine the effect of growing unfunded pension liabilities and the state's large backlog of unpaid bills, which will have to be paid for with future revenue. The analysis shows that there is no simple solution to Illinois' chronic fiscal condition. The link above is a PDF of the Fiscal Projections. Click here for a one-page overview.
This publication and updated and revised for The Illinois Report 2014. You can read that version here.
Temporary Taxes: How Often Does the Sun Actually Set?
In this Issue Brief, the Fiscal Futures Project takes a look at temporary tax packages enacted across the U.S. between December 2007 and January 2013. They found that most states that enacted temporary tax packages did let them expire, but most made adjustments to the original phase-out plan. The link above is a PDF of the Issue Brief.
What Happened to the Illinois Economy Following the January 2011 Tax Increases? A Midwest Comparison
Using employment, unemployment and average weekly earnings data, The Fiscal Futures Project found that Illinois’ economy has been in worse condition than our Midwestern peers since January 2011. This can be attributed to many factors, including the income tax increase. The link above is a PDF of the Issue Brief. This is a revised version of a document by the same authors first released in October 2013. This revision incorporates additional data and responds to comments made by readers of the earlier document. The substantive conclusions are essentially unchanged from the earlier version. Click here to see a detailed version of this paper, including methodology.
How do SB1 and SB2404 affect Illinois' 10-year budget out look?
Fiscal Futures Project co-director Richard Dye and Fiscal Futures Researcher Andrew Crosby analyze the long-term impact of both senate bills on the state's budget. They found that SB1 has the greatest impact on the long-term budget, saving the state around $2 billion to $3 billion per year. This is assuming the bill survives likely constitutional challenges. In comparison, savings to the state from SB 2404 are around $0.5 billion to $1.5 billion per year, depending on how participants respond to incentives to accept reduced pension benefits in order to keep health care coverage in retirement. The link above is a PDF of the analysis. Click here to see the documentaiton and sources for the analysis.
Testimony before the Illinois House State Government Administration Committee on Online Budget Publication
Fiscal Futures Project co-director David Merriman testified on March 13, 2013 at the Hearing on HB2955: Online Budget Publication. He discussed the barriers to inputting data about detailed budget categories and the impediments this creates for preparing detailed analysis of Illinois' fiscal condition and choices. The link above is a PDF of his written testimony.
Testimony before the Illinois Senate Appropriations II Committee on Other State Funds
Fiscal Futures Project co-directors David Merriman and Richard Dye testified in Springfield about the project's work on transparency in budgeting. They discussed a 2011 Fiscal Futures paper, "Why Ignore Over Half of the Illinois State Budget Picture?" and their proposal for a consolidated funds budget, which tracks 380 of the state's funds, rather than just the four general funds. The link above is a PDF of their written testimony.
How do California and Illinois Compare?
The two states with the worst fiscal problems in the nation face daunting challenges related to not enough revenue to cover expenditures and the consequences of massively underfunded public pension systems. For years, California's bond ratings have been the worst and Illinois' next to worst of the 50 states. But in January 2013, Illinois moved to last place. This table and analysis provide a clear comparison of the two states, including changes to tax rates, budget cuts, and action on public pension policy.
The Fiscal Futures Project contributed research to the national State Budget Crisis Taskforce. Click here for the report (PDF).
Fiscal Futures researchers contributed extensive research on Illinois' financial issues for the national State Budget Crisis Task Force led by former New York Lieutenant Richard Ravitch and former Chairman of the Federal Reserve Paul Volcker. The report details threats to Illinois’ public services and fiscal sustainability as well as actions that can be taken to address those threats.
For more by The Fiscal Futures Project, visit the Research and Articles page.