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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Competing goals of budget reforms

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The short papers in the Illinois Budget Policy Toolbox are intended to analyze the pros and cons of alternative tax and spending reforms that help bring the Illinois state budget deficit towards balance.


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Overview of the economic and fiscal situation in Illinois

Authors

Despite enormous recent challenges, Illinois’ economy remains relatively healthy compared to other states. In recent recessions, Illinois has a pattern of doing worse than the national average and recovers slowly. Unfortunately, the recession that began in December 2007 and ended in June 2009 hit both the nation and Illinois exceptionally hard, and Illinois’ recovery has lagged the nation’s recovery in profound and disturbing ways.


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Efficiency and distributional effects of Illinois gas taxes

Authors

  • Kaveh Nafari

The current fiscal crisis in Illinois affects all parts of the state’s budget. Infrastructure is no exception. For many years Illinois has spent more on highways than it has collected in highway-related revenue. One solution to this problem is to increase the state’s gasoline tax. This report discusses the efficiency and distributional effects of increasing the state’s gas tax, and also compares a gas tax increase to alternative solutions such as increased use of tolls.


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Policy Initiative: none

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Wind power: An opportunity for illinois

Authors

  • Maarten Vrouenraets

The U.S. Clean Power Plan will require states to reduce carbon emissions significantly by 2030. The mandate allows states to decide how to reach this target. Rather than relying on coal-fired power plants, Illinois can build natural gas plants or invest in renewable technology like solar, geothermal or wind. The state’s geography and climate give Illinois a special advantage in the use of wind power.


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Policy Initiative: none

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U.S. Clean Power Plan provides opportunity for significant cuts in state budget deficits

Authors

  • Daniel Karney

The 2014 mid-term election that put Republicans in control of Congress reduced any chance of federal legislative action to limit greenhouse gases such as carbon dioxide from electric power plants. However, the executive branch already has authority from the U.S. Supreme Court to limit emissions under the Clean Air Act. In June 2014, the Obama Administration issued its proposed Clean Power Plan, which sets a specific limit on emissions for each state and then allows each state to decide how to meet its target.


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The Fiscal Futures Project progress report and initial results

Authors

  • Nancy Hudspeth

The Fiscal Futures Project began out of concern that the state of Illinois lacks the capacity to project its fiscal demands and revenue streams into the future. Being able to generate long term projections of anticipated expenditures and revenues can help foster more fiscally responsible long term solutions by state lawmakers. The Institute of Government and Public Affairs (IGPA) is building a data driven model that will help project receipts and expenditure demands into the future.


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Fiscal Fallout No. 1

Authors

The Illinois state budget has well over 600 individual funds, but most discussion involves only the “General Funds.” The Fiscal Futures Project constructs a more inclusive concept, “Consolidated Funds,” which for FY 2009 covers $61 billion in spending from 380 funds, not just the $35 billion in the four general funds. The consolidated measure presents a better picture of the state’s fiscal situation.


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Fiscal Fallout No. 2

Authors

It is no secret that Illinois is experiencing budget deficits of unprecedented magnitude. How bad has it been over the last decade? Using the consolidated funds budget, which provides a consistent measure of receipts and spending over time, we can examine the state’s budget gap, and alternative measures of that gap, over time.


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Fiscal Fallout No. 3

Authors

If a state consistently experiences conditions in which costs are projected to increase faster than revenue, even in non-recession years, this is considered a “structural deficit.” With a structural deficit, crisis conditions become the new normal. IGPA’s Fiscal Futures model finds strong evidence of a structural deficit in Illinois, due to the projection that spending is growing faster than receipts.


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Fiscal Fallout No. 4

Authors

  • Nancy Hudspeth

The $12.2 billion in borrowing proposed in January 2011 to cover the payments backlog and the half-year of tax increases does eliminate the budget gap for FY 2011 which ends June 30, 2011. But for FY 2012, when the new debt service is added to other obligations, even the significant tax increases and restraints on spending growth are not sufficient to eliminate the state’s budget gap.


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Policy Initiative: none

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