Improving budgetary practices in Illinois

December 7, 2015

Improving budgetary practices in Illinois

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Illinois does not follow basic principles of sound budgeting recommended by fiscal experts. This research suggests ways that Illinois and other states can reform practices to avoid fiscal crises in the future.

Two reports released by a team of researchers from IGPA and the Volcker Alliance demonstrate ways states can improve transparency and accountability.

A working paper released by the Volcker Alliance, a nonpartisan organization established in 2013 by former Federal Reserve Board Chairman Paul A. Volcker, sets forth six basic principles of sound budgeting for states and provides ten recommendations for improved budgetary transparency, including disclosure of 1) the use of one-time revenue sources to cover recurring expenditures, 2) deferrals of spending, and 3) underfunding of infrastructure maintenance and public-worker retirement obligations. Read the Volcker Alliance's paper here (PDF).

“In order for elected officials to be able to govern effectively and citizens to be accurately informed about policy choices, states have to provide comprehensible information about their budgets,” said William Glasgall, Director of State and Local Programs for the Volcker Alliance. “This paper highlights some existing best practices and demonstrates the direction states need to be heading.”

Researchers from IGPA's Fiscal Futures Project found that Illinois’ budget practices are badly in need of reform. They assert, “The buy-now, pay-later content choices of the past were facilitated, even disguised, by then-existing procedural and reporting practices. Reform of these practices would improve budget transparency and accountability, and help prevent Illinois from getting into such dire fiscal straits in the future."

The IGPA team suggests five concrete steps that Illinois can take today: 1) Refine and expand multiyear budget planning, 2) Require meaningful fiscal notes to accompany legislation, 3) Modify cash-only budget reporting to include significant changes in liabilities and assets, 4) Clearly identify non-sustainable or one-time revenue sources, and 5) Adopt a broad-based budget reporting frame with meaningful spending and revenue categories consistently defined over time.


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