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Balanced Budget
$8.0 Billion11%
$27.8 Bil-lion
39.0%
$35 Billion50%
FY14: All Funds Budget$71 Billion
Federal Funds Other State Funds General Revenue Funds
$3.6 billion of $35 billion GRF is at-tributed to fed-eral match on Medicaid spend-ing.
Personal Income
45%
Corporate Income8%
Sales 21%
Other Sources 15%
Federal Receipts 11%
FY14 General Revenue Funds by Source$35.5 Billion
Personal Income - $16.0B
Corporate Income - $2.9B
Sales - $7.4B
Other Sources - $5.1B
Federal Receipts - $4.0B
Government Services 3.3%
Public Safety and Regulation4.8%
Human Services 14.7%
P- 12 18.9%
Higher Ed 5.6%
Medicaid/Healthcare 23.5%
Pensions 16.9%
Debt Service on Pension Bonds
4.7%
Debt Service on Capital Bonds1.7%
Public Transportation1.9%
Transfers to Local Governments 4.3%
FY 2014 Enacted GRFDiscretionary and Non-Discretionary Appropriations
$35 billion
Government Services - $1,178Public Safety and Regulation - $1,692Human Services - $5,202P- 12 - $6,687Higher Ed - $1,991Medicaid/Healthcare - $8,311Pensions - $5,988Debt Service on Pension Bonds - $1,655Debt Service on Capital Bonds - $527Public Transportation - $664Transfers to Local Governments - $1,508
State Employees =
$4 billion (11%)
$ below in millions
Paying Our Bills
Paying Bills
• The budget office estimates that we will end the current fiscal year with $3.5 billion less bills on hand when compared with FY12
•Major reforms to state law will continue to drive this number down in later years
FY12 FY13 est. FY14 est.$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
$9.1
$6.1
$2.8
Unpaid Bills: End of Fiscal Year($ in Billions)
By FY14 half of the unpaid billswill be less than 60 days old.
$2.8
$5.6 total
Pension Obligation Bonds Issued in FY10 and FY11
• For fiscal years 10 and 11, the state issued $7.166 billion in bonds to make the required contribution to the pension systems
• By the end of fiscal year 14, the state will retire $3.8 billion in costs associated with those bonds
2011 2012 2013 2014 2015 2016 2017 2018 2019$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
$802,477
$1,791,240
$2,765,815
$3,817,370
$5,036,678
$5,818,607
$6,870,770
$7,874,648
$8,827,541
Cumulative Debt Service Paidby the End of Each Fiscal Year
($ In Thousands)
Pension Obligation Bonds Issued in FY10 and FY11
• Strong performance has meant a return of nearly $1.52 billion to the pension systems, or $806 million more than the interest costs
•Bonds will retire by FY20
FY10 and FY11 POBsInterest vs. ReturnJuly 1, 2010 through July 1, 2013
Interest Return$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
$1,400,000,000
$1,600,000,000
$715,392,200
$1,521,163,041
FY10 and FY11 POBsInterest vs. Return
July 1, 2010 through July 1, 2013
Difference = $805.77 million
FY10 FY11 FY12 FY13 est. FY14 est.$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
$9.2
$8.0
$9.1
$6.1 $5.6
$8.8
$8.0 $7.0
$6.1
$5.0
End of Fiscal Year - Bills and Combined Debt Service on Pension Bonds($ in Billions)
Bills Owed Bonds Owed
$7.4 billion in combined debt service and backlog reduction since FY10
Taxes
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,0000.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
Personal Income Tax Rates of Midwestern States
Iowa
Wisconsin
Missouri
Kentucky
Illinois
Indiana
Illinois - 2015
Income (Married Filing Jointly)*Indiana's tax rate includes an average county tax rate of 1.28%
Tax
Rat
e
Top Corporate Marginal Income Tax Rates of Midwestern States
Kentucky Missouri Illinois Wisconsin Indiana Iowa0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
6.00% 6.25%7.00%
7.90% 8.00%
12.00%
Top Corporate Marginal Income Tax Rates of Mid-western States
Inc
om
e T
ax
Ra
te
Government Services - $1,1783%
Public Safety and Regulation - $1,692
5%
Human Services - $5,20215%
P- 12 - $6,68719%
Higher Ed - $1,9916%
Med-icaid/
Healthcare -
$8,31123%
Pen-sions - $5,98817%
Debt Ser-
vice on Pen-sion
Bonds -
$1,6555%
Debt Ser-
vice on Capital Bonds - $527
1%
Public Transportation - $6642%
Transfers to Local Governments - $1,5084%
FY 2014 Enacted GRF$35 billion
$ in Millions
State Employees =$4 billion (11%)
Human Services, P-12, and Higher Education Total $13.88 bil-lion
Pensions
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
-5%
0%
5%
10%
15%
20%
25%
30%
2.9%3.
3%3.7%4.
3%4.4%4.
7%5.4%6.
2%8.
4%
6.9%
4.7%5.
6%7.
3%9.
6%
5.1%
4.8%
17.1
%20
.0%22
.4%22
.9%
21.7
%22.6
%22
.7%22
.7%
20.6
%20
.8%21
.1%21
.3%21
.6%21
.9%22
.1%22
.3%22
.6%22
.8%23
.0%23
.1%23
.3%23
.3%23
.4%23
.4%23
.4%
23.4
%
23.3
%
23.3
%
23.2
%
23.1
%
23.0
%
22.9
%
22.8
%
22.7
%
3.4%
GRF Pension Cost as a Percentage of Total General Funds
Current Law; Assuming No Expiration of Tax IncreaseFY 1996 - FY 2046 (Projected)
Notes: All future projections of State pension contributions come from the Retirement System Actuaries.Only the GRF portion of the regular pension appropriation plus pension bond debt service is shown here.GRF FY 2013-2016 projections provided by CoGFA's revenue staff; figures for FY 2017 - 2045 used an assumed growth rate of 2.3%.Approximately 66% of SERS' total annual appropriation is assumed to come from GRF while the rest comes from other State Funds not shown here. FY 2010 and FY 2011 amount do not reflect the pension bond/note proceeds pursuant to P.A. 96-0043 and P.A. 96-1497.
-5%
0%
5%
10%
15%
20%
25%
30%
GRF Pension Cost as a Percentage of Total General Funds
Comparison; Assuming No Expiration of Tax IncreaseFY 1996 - FY 2045 (Projected)
Statutory Contributions SB 2404
SB 1
Notes: All future projections of State pension contributions come from the Retirement System Actuaries.Only the GRF portion of the regular pension appropriation plus pension bond debt service is shown here.GRF FY 2013-2016 projections provided by CoGFA's revenue staff; figures for FY 2017 - 2045 used an assumed growth rate of 2.3%.Approximately 66% of SERS' total annual appropriation is assumed to come from GRF while the rest comes from other State Funds not shown here. FY 2010 and FY 2011 amount do not reflect the pension bond/note proceeds pursuant to P.A. 96-0043 and P.A. 96-1497.Projections including transfers pursuant to the PSA were not available for neither GARS nor JRS.
SB 2404 choice: Younger 50% of Actives Elect Choice A, Older 50% of Actives and 100% of Inactives Elect Choice B, Option 2; Retirees: 100% Elect Choice A
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