1. Hosted by Representative Jeanne Ives

2. FY 2013 and FY 2014 Budgets Pension Reform Other Legislation Perspective of a New Legislator Questions 3. FY12 FY13 Est. FY14 Est. FY15 Est. FY16 Est. $ Change $3,309 $484 $800 -$1,649 -$1,911 General Revenues $33,797 $34,281 $35,081 $33,432 $31,521 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 4. Initial FY13 framework set spending limit of $33.7 billion in general funds. FY13 supplemental appropriations have pushed spending to $35.5 billion. Fed by one time revenue spike resulting from fear of federal tax law changes $315 million Community Care Program $220 million DHS-Developmentally Disabled $350 million Group Insurance Program $42 million Department of Corrections 5. And Tax Reform? 6. FY12 FY13 Est. FY14 Est. FY15 Est. FY16 Est. $ Change $3,309 $484 $800 -$1,649 -$1,911 General Revenues $33,797 $34,281 $35,081 $33,432 $31,521 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 7. Total Resources FY13 FY 14 Difference Off the Top Expenditures $33,719 $35,081 $1,362 Pensions $5,100 $6,036 $936 Group Insurance $1,171 $1,362 $191 Debt Service $2,218 $2,182 -$36 Transfers Out $2,142 $2,144 $2 Medicaid $6,639 $6,908 $269 Old Bills $800 $800 $0 Permanent Lapse ($650) ($650) $0 Total Off the Tops $17,420 $18,782 $1,362 Balance to Committee ($B) $16,299 $16,299 $0 8. FY13 FY14 Difference ($) Actual Dollars (1% Reserve) Human Services (31.21%) $5,087,296,478 $5,036,423,513 -$50,872,965 K-12 Education (39.83%) $6,491,836,794 $6,426,918,426 -$64,918,368 Higher Education (12.14%) $1,978,809,910 $1,959,021,811 -$19,788,099 Public Safety (9.67%) $1,576,088,885 $1,560,327,996 -$15,760,889 General Services (7.15%) $1,165,014,734 $1,153,364,587 -$11,650,147 Total to Committees $16,299,046,801 $16,136,056,333 -$162,990,468 9. $6.69 $1.16 $1.98 $12.17 $1.69 $11.13 $0.60 $35.4 Billion Elementary & Secondary Education - $6.69B General Services - $1.16B Higher Education - $1.98B Human Services - $12.17B Public Safety - $1.69B Debt Service, Pension Payment, Lapse Funds - $11.13B Bill Paydown Transfer - $601 million 10. $6.69 $1.16 $1.98 $12.17 $1.69 $23.69Billion Elementary & Secondary Education - $6.69B General Services - $1.16B Higher Education - $1.98B Human Services - $12.17B Public Safety - $1.69B 11. Concerns Maintains record spending level established in FY13 despite the fact that FY13 was based on one time revenues. Does not prepare for coming fiscal cliff in FY15 as income tax increase is set to phase down Reduces old bill set aside from $800 million in FY13 to $651 in FY14. Revenue estimate increased last day of session to allow for higher spending level. 12. -$7,000 -$6,000 -$5,000 -$4,000 -$3,000 -$2,000 -$1,000 $0 $1,000 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 $777 $300 -$1,220 -$1,094 -$410 -$474 -$291 -$135 -$834 -$3,674 -$6,475 -$6,475 -$6,900 Millions Note: Does not include bills held at agencies. The backlog in December of 2012, including bills held at agencies, stood at $8.9 billion. Comptroller estimates that FY13 ended with a total of $7.00 billion including bills at agencies. 13. 6 3 12 0 2 4 6 8 10 12 Before Blagojevich (Prior to 2003 covering 24 years) Under Blagojevich Under Quinn NumberofCreditDowngrades 14. Illinois has the lowest credit rating of any state in the nation. Every other state in the nation is operating in the same national economy, yet we are rated worst. Were not just like every other state. Were worse than every other state. Over half of all the credit downgrades in the history of Illinois have occurred under this administration. Weve been downgraded 21 times in total with 12 occurring under Quinn. Lower credit ratings mean higher interest payments for Illinois taxpayers. These downgrades will cost taxpayers hundreds of Millions of dollars. Illinois has one of the highest risks of default of any sovereign government in the world. Lately, Illinois regularly ranks in the top 10 highest default risks with countries like Iraq, Greece, Pakistan and Iceland. 15. Illinois pension systems are the worst funded pension systems in the nation. Assets in the state pension systems are $96 Billion short of covering our estimated liabilities. This is a debt that will eventually have to be paid. The payments on this debt threaten our financial solvency. 16. $0 $20 $40 $60 $80 $100 $120 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Billions Unfunded Pension Liabilities 17. Dick Ingram Head of Teachers Retirement System: One forecast says the TRS could be insolvent by 2029. 18. If anyone doubted the severity of the pension problems, the mayor said, last week's events [Moodys credit rating downgrade of the City of Chicago] should serve as something of a wake- up call. "Denial," he said, "is not a long-term strategy." 19. Chicago is also fast approaching a day of reckoning. Chicago Public Schools last week announced 2,100 layoffs, which Mayor Rahm Emanuel blamed on a $400 million spike in pension payments. "The pension crisis is no longer around the corner," he said. "It has arrived at our schools." Moody's MCO -0.73% downgraded the city's general-obligation bonds last week due in large part to rising retirement and debt service costs, which comprise about a third of its operating budget. Chicago plans to dump 30,000 retirees on Medicare and the ObamaCare exchanges in 2017. Yet all savings will go toward pension payments, which will triple in 2015. The mayor has warned that the bill could force a 150% spike in property taxes. - Wall Street Journal, After Detroit, Whos Next?: Creditors and Unions are Learning a Painful, but Useful, Lesson; July 21, 2013 20. Established in the mid-1990s to help universities attract and retain the most qualified employees. An amount equal to 15 percent of the employees salary goes toward a retirement savings account. 17,500 workers have chosen this 401(k)-style SMP. 21. 1. Based on existing SURS 401(a) retirement program of 17,500 state workers 2. Creates individual retirement accounts for current state workers 3. 7% employer contribution, 8% employee contribution 4. State worker owns and controls the account 5. Account is Portable 22. FY12 FY13 Est. FY14 Est. FY15 Est. FY16 Est. $ Change $3,309 $484 $800 -$1,649 -$1,911 General Revenues $33,797 $34,281 $35,081 $33,432 $31,521 23. North Carolina state Senate Majority Leader Phil Berger, This tax only adds to the cost of hiring workers and thus makes unemployment worse." GOP lawmakers have passed a pro-growth plan that will slash the state personal income tax rate to 5.75% from 7.75% by 2015; cut the corporate tax to 5% from 6.9%; and eliminate the state estate tax. All of this will spur growth and job creation. Yet unions and others on the left pummel the plan as a giveaway to the rich. - Wall Street Journal, Moore, Stephen: Why are North Carolina Liberals So @&%*! Angry?; June 19, 2013 24. Illinois ranks 47th in the nation in job growth. Only three states in the nation have performed more poorly than Illinois over that time period. (Michigan, Ohio & Rhode Island). Illinois has LOST almost 250,000 jobs. During that same time period, 30 other states added jobs. Illinois LOST over 4% of its jobs while the average state INCREASED jobs by 1.7%. If Illinois had simply grown at the national average, wed have 350,000 more jobs today. If Illinois had grown jobs at the rate of Texas, which grew jobs at over 10%, wed have over 850,000 more jobs today and almost $3 Billion in associated state revenue annually. 25. 95.00 100.00 105.00 110.00 115.00 120.00 125.00 130.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 National RMW IL 26. A New Problem for Financially Strapped Illinois 27. 0 0.5 1 1.5 2 2.5 3 (Millions) 28. Medicaid Budget Goals Not Met in FY13 Maximus Contract in Jeopardy Anywhere from 300,000-700,000 additional enrollees Additional cost upwards of $1 Billion Healthcare study shows no better health outcomes under Medicaid Delivery of Best Care at Best Price is the Goal 29. Concealed Carry Legislation Fracking Pension Shift Medical Marijuana 70 mph Cell phone use Tanning Bed Use by Minors METRA 30. Court ordered legislation 6 months to implement 10-year process, agreed bill Exempt Areas 16 hours training, $150 fee Shall Carry Local Ordinances 31. Part of Illinois Economy for 50 years Bi-Partisan agreement over one year Potential to Create 45,000 jobs Severance Taxes Adds to Americas Energy Independence 32. Speaker Madigan Committed to Shift Universities okay with 1% shift=2% tuition increase Shift burden going forward, expect local bond ratings to decrease, property taxes increase Need other reforms first 33. Medical Marijuana 70mph Speed Limit Tanning Beds and Cell Phones Task Forces METRA HR521 34. ?