July 8, 2016
Springfield update on stopgap budget
Public Acts 99-0523 and 99-0524 provide stopgap appropriations and corresponding budget implementation legislation, enacted on June 30, 2016, provide appropriation authorization for fiscal years 2016, portions of 2017, and reappropriations for some prior years. Although FY16 appropriations were made on the final day of the fiscal year, the stopgap budget will enable the state to pay for expenses incurred since July 1, 2015.
The measures include several other provisions with important implications for northeastern Illinois, from education and human services funding to transportation and local government operations. This Policy Update reviews key transportation and revenue components of the enacted budget. Overall, the budget falls short of providing the necessary infrastructure, open space, and other revenues to promote economic investment in the region and a strong quality of life for our residents.
The budget provides operations funding to the Illinois Department of Transportation (IDOT) for both FY16 and FY17, with appropriations approximately totaling $2.2 billion and $3.0 billion, respectively. Appropriations for IDOT include state and federal funds for planning, which support CMAP and the state's 15 other metropolitan planning organizations. It also provides some $10.8 billion in reappropriations to IDOT from the Road Fund, the State Construction Account Fund, Transportation Series D Bond Fund, Transportation Series B Bond Fund, and from the Federal High Speed Rail Trust Fund. This revenue will allow construction of the planned capital projects for FY 17.
In addition, state funding for the Regional Transportation Authority (RTA) was provided at prior year levels, including grants for reduced fares ($17.6 million), Pace paratransit services ($3.8 million), debt services for the RTA's Strategic Capital Improvement Bonds ($131 million), as well as state transfers via the Public Transportation Fund for the RTA. Amtrak funding declined from $46 million in FY15 to $38.3 million in FY16, but will rise to $50 million in FY17.
Stopgap revenue provisions
Previous legislation enacted along with the FY15 budget allowed special fund transfers to the State's General Revenue Fund to meet cash flow deficits and maintain liquidity. Public Act 98-0682 required that any funds transferred must be repaid to the special fund of origin within 18 months. However, the legislation approved on June 30 deleted provisions requiring repayment to some special funds, allowing approximately $440 million to remain available for General Revenue Fund spending. As a result, $40 million borrowed from the Open Space Land Acquisition and Development (OSLAD) fund will not be replenished. Another provision to fund these appropriations will allow the expenditure of funds from the Budget Stabilization Fund, known as the "rainy day fund." The legislation does allow the state to refinance $2 billion in outstanding debt, which may reduce debt service costs.
CMAP closely monitors state fiscal policies because the Chicago region's ability to implement GO TO 2040 is significantly shaped by the fiscal and tax policy decisions made at the state level. GO TO 2040 emphasizes the importance of clear investment priorities to support our economy, our communities, and our infrastructure. These investments are vital for northeastern Illinois to remain economically competitive in the 21st century. The state's ability to make these investments will be increasingly affected by rising pension obligations, Medicaid costs, debt service payments, non-transparent budgeting, and a potentially shrinking tax base.
Government budgets are increasingly complex. To promote transparency and facilitate prioritized investments in a constrained fiscal environment, GO TO 2040 emphasizes the need for clarity on how public funds are being spent. Data and information sharing through transparent and open governments improves efficiency and accountability. The Illinois budgeting process and budget documents continue to lack important measures for transparency and clarity. For example, due to the 800-page document's organization and lack of basic summary information, it would take substantial analysis to determine how much was appropriated in total. As the state works towards needed budgetary reforms, residents and public officials alike would be well served by increased, high-quality information about the decisions ahead.
CMAP will monitor negotiations to fund programs that received only partial appropriations in the stopgap budget, reform revenue, and address the state's long-term obligations. This budget does not provide the state or region sufficient revenue to maintain our infrastructure -- critical work lies ahead to secure adequate and sustainable revenues. More broadly, significant challenges remain to balance the budget over the long term, particularly in light of the state's debt obligations. In the interim, the remaining uncertainty poses a challenge for the region as it continues to recover from the last recession.