On February 14, Illinois Governor Bruce Rauner presented his Fiscal Year 2019 budget proposal. The budget proposal is based on $37.9 billion in general revenue funds. It relies on increased state revenues from the income tax increase enacted in July 2017 and shifting the payment of pension costs and state employee group health insurance from the state to units of local government.
The income tax increase was passed amid heavy opposition by the Governor, who then vetoed the increase, only to have his veto overridden with support from both democrat and republican legislators. The budget proposal indicates the rising costs in pensions and state employee group health insurance has crowded out the state’s general funds spending. Shifting costs to local governments will allow the state to invest more money in education and provide tax relief to residents of the state. Implementation of these cost saving measures for the state must be enacted through legislation, of which legislators from both parties have traditionally opposed.
Shifting pension and health insurance costs from the state to units of local government could result in local governments reducing services, increasing property taxes, or a mix of the two. Furthermore, shifting pension costs to units of local government could further increase funding inadequacy for school districts, which could ultimately diminish the effects of the historic school funding reform legislation enacted in the summer of 2017.
Operating Budget Highlights
- $453 million in funding for early childhood education.
- $350 million to be distributed to elementary and secondary schools with the greatest need of additional resources (Evidence-Based Funding for Student Success Act).
- Maintains funding for community colleges and state universities as well as grants for the Monetary Assistance Program for need-based financial aid to college students.
Human Services and Healthcare
- $1.6 million in new funding for Opioid Overdose Prevention.
- Provides a wage increase to service providers serving individuals with developmental and intellectual disabilities.
- Provides funding for the operation of a new, 200-bed veterans home in Chicago.
- Funds a new cadet class at the Illinois State Police Academy, which projects to add 85 new state troopers.
- Provides funding for additional child protection investigators responsible for high-risk cases involving intact families.
- Fully funds the Low Income Housing Energy Assistance Program, which provides financial assistance to low-income households for utility bills.
- Provides $2.2 billion in pay-as-you-go (non-bonded) funding for the Department of Transportation’s annual capital road program.