Economic Policy

Exploration of the intersection of policy and economic trends, public finance, and economic development

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IGPA Experts use cutting edge social science research methods to analyze public policy. Our independent evidence and analysis is non-partisan, data-driven, and based in the best academic scholarship available.
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Transparency in state budgets

Authors

  • Nancy Hudspeth

A major impediment to understanding how much trouble state governments are in is a lack of transparency in the way their budgets are presented. Greater budget transparency would facilitate more informed policymaking. Research by the Fiscal Futures Project shows that defining and measuring budget transparency is a necessary first step toward achieving it.


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Governor Quinn's plan for public pensions

Authors

  • Nancy Hudspeth

Although many details regarding Governor Quinn’s pension proposal were unavailable at the time of publication, some very signicant elements were emerging. For example, employee contributions would increase by 3 percentage points, and retirement ages would rise to age 67. One important change could be a shifting of pension costs from state to local governments for teachers and state university employees (TRS and SURS). The impact of these changes could be profound. The author analyzes the proposed changes.


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The Illinois state budget: How bad is the picture, and what can you do about it?

Authors

  • Nancy Hudspeth
  • Andrew Crosby

Presentations to community organizations across the Chicagoland region on the state budget crisis, made possible through the generous support of the UIC Institute for Policy and Civic Engagement. Also available in Spanish (see below).


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How do California and Illinois compare?

Authors

  • Nancy Hudspeth

In recent years it seemed that Illinois and California were competing to be the state with the worst fiscal problems. In both states there had been a twenty to thirty year history of avoiding tax increases and spending cuts. When the Great Recession hit, both states’ fiscal conditions were already poor, and as revenues declined and demands for services increased, both states faced massive deficits. Currently, Illinois and California have the lowest bond ratings in the nation.


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Testimony Before the Illinois Senate Appropriations II Committee

Authors

Fiscal Futures Project co-directors David Merriman and Richard Dye delivered testimony before the Senate Appropritations II Committee on Other State Funds. They discussed the "excessive" focus on the Illinois General Funds in the media, in public and political discussion and the fact that this can obscure Illinois' true fiscal condition, revenue sources and availability and spending priorities. This confusion may lead to unfortunate choices about the allocation of our very scarce resources.


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Testimony Before the Illinois House State Government Administration Committee Hearing on HB2955

Authors

Fiscal Futures Project co-director David Merriman delivered testimony before the House State Government Administration Committee on HB2955. The bill would have required that the Illinois GOMB post the proposed budget in a version that makes it easy to analyze the data using modern computers.


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Temporary taxes

Authors

  • Andrew Crosby

In January 2011, Illinois enacted legislation that made changes to the personal and corporate income tax rates. These tax increases are scheduled to begin their phase-out in the near future. However, as Illinois continues to face budget pressures, some lawmakers have questioned whether Illinois’ temporary tax increases should be made permanent, and others have noted that the future of the tax should be discussed.


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(.PDF 244.16 KB)

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What happened to Illinois' economy following the January 2011 tax increases?

Authors

  • Andrew Crosby

How did Illinois’ economic activity change after January 2011? Using several years of data compiled by the U.S. Bureau of Labor Statistics (BLS), The Fiscal Futures Project examines three indicators of economic activity: employment, the unemployment rate, and average weekly earnings. Despite Chicago’s stature as a global city, Illinois’ economy is still closely linked to its regional (Midwestern) neighbors. Illinois sells many services (especially business services such as accounting and legal services) to these states, and it purchases many good and services from these states.


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Illinois still has serious fiscal problems after December 2013 pension law changes

Authors

  • Nancy Hudspeth

Illinois has a chronic, structural fiscal problem so huge that it cannot be eliminated by increases in economic growth alone, increases in taxes alone, or—alas— aggressive pension changes alone. In early December 2013 the General Assembly passed, and Governor Quinn quickly signed, a major pension reduction bill. In this brief, The Fiscal Futures Project projects Illinois’ budget gap with estimates of the fiscal impact of the new pension law. The state still has a large structural imbalance after the pension changes.


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(.PDF 512.17 KB)

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Apocalypse now? The consequences of pay-later budgeting in Illinois:

Authors

  • Nancy Hudspeth
  • Andrew Crosby

For years Illinois has been spending much more than could be supported by sustainable sources of revenue and covering the deficit by issuing IOUs. New projections from the Fiscal Futures model put the magnitude of the underlying deficit at $9 billion for FY 2016—and growing thereafter. The accumulated value of all the IOUs issued to pay for past deficits now totals $159 billion. These IOUs represent claims on the state that when paid off will crowd-out spending on other priorities.


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(.PDF 662.8 KB)

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