PI Original Steven Ross Johnson Monday November 19th, 2012, 6:18pm

Illinois Revenue Projections, Allocation Procedures Need Revamping, Report Finds

A new report from the governor’s advisory commission on improving the state’s budget process is calling on lawmakers to find a more accurate way of estimating how much revenue the state takes in, and become more flexible when it comes to how those funds are allocated.

A new report from the governor’s advisory commission on improving the state’s budget process is calling on lawmakers to find a more accurate way of estimating how much revenue the state takes in, and become more flexible when it comes to how those funds are allocated.

This month, the Illinois Budgeting for Results Commission released its second annual report where it detailed a list of recommendations the Illinois General Assembly could take to form a budget that more effectively cuts waste by allocating funding to programs based on their performance.

Formed by Gov. Pat Quinn in 2010, the 15-member body is made up of elected officials, civic and business leaders, and academics. Last year’s recommendations led to an overhaul in the state’s Medicaid system, calling for the formation of a plan that would fully fund liabilities on an annual basis, instead of kicking those obligations down the road.

In all, seven priorities were established to reflect what the commission felt should be key considerations in the budget process moving forward. Priorities included such goals as government transparency, providing a quality education system for all, economic development, public safety, access to quality healthcare, providing the opportunity for a good quality of life for all residents, and maintaining the state’s environmental resources.

The 18 recommendations stated within this year’s report ranged from more procedural actions, such as a call to conduct more public meetings over the course of the year, to more substantive suggestions like having the General Assembly change its budget approval process in order to incorporate the commission’s priorities.     

One of the key recommendations, according to Larry Joseph, director of the Fiscal Policy Center at Voices for Illinois Children, includes establishing a method that provides more accurate estimates of state revenue to avoid situations such as what occurred during the passing of the fiscal year 2012 budget when the state Senate and House came up with revenue estimates that were about $1 bilion apart.

“For many years, they [legislators] just ignored the revenue side of the budget and just passed a set of appropriations bills without any consideration as to whether they matched up,” said Joseph, who also serves as a commissioner for Budgeting for Results. “The budget that was enacted for FY 2012 was sort of by default based on the House revenue estimate, which turned out to be not an accurate estimate.”

Joseph said the General Assembly needed to start basing its revenue projections for the coming fiscal year on either estimates provided by the Commission on Government Forecasting and Accountability, a body assigned to provide lawmakers with such figures, or come up with some sort of “revenue forecasting process” that a number of other states use in order to come to a consensus.

“The General Assembly needs to adopt reliable and evidence-based revenue estimates each year,” Joseph said. “If you’re going to have a responsible budget process, you should begin with revenue estimates that hopefully key policymakers can agree on.”

The second key recommendation within the report, according to Joseph, dealt with the process in which the state allocates funding to programs and agencies.

The current budgeting process calls for the allocation of a certain percentage of resources to go toward major policy areas, such as elementary and secondary education, higher education, public safety, human services and general government services. Joseph said such a process does not allow for adjustments to be made when needed.

“Unless you have enough flexibility that opens the process to make [funding] adjustments among the major policy areas, you pin yourself into a corner,” Joseph said.  “It’s just not good public policy to begin the [budget] process with pre-determined shares [of funding] for broad policy areas.”

Joseph could not speculate as to whether lawmakers were likely to adopt the commission’s recommendations, saying it was still too early to tell.

He did feel, however, that making changes in how the state budget revenue was estimated probably fared a better chance of gaining approval than changing the rules on how that revenue is spent.

“That’s more likely than changing the allocation process,” Joseph said. “But I may be wrong.”

Although mentioned among one of the priorities that needed to be addressed, no specifics were given in the report as to how lawmakers should go about trying to reform the state’s pension system, which is estimated to run a deficit of more than $90 billion by next year.   

A referendum to amend the state constitution in order to require a 60 percent majority vote by the General Assembly to pass an increase in public employee pensions failed to get the 60 percent approval that it needed on Election Day.    

Comments

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This is nothing more than an early stage roundup of support to extend the onerous income tax increase of 2%, to be reduced by only 1.5% shortly.

The tax-and-spend Democrats just can't stop spending money and making giveaways to try and get elected again.

Axelrod is reported to have said that the tea-party takeover of 2010 was a sure way to ensure Obama's re-election in 2012. The Democratic takeover in 2012 is going to ensure a backlash to the Republicans in 2014.

Illinois' Governor Spendalot should have this to look forward to, as well as the members of the House and Senate.

Bob Kastigar
IBEW Local 1220, Chicago

llinois' Governor Spendalot should have this to look forward to, as well as the members of the House and Senate.

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