Illinois FY 2014 Budget: Combating fiscal woes for a hopeful recovery

Published: March 28, 2013

BudgetForecasts and Spending

Illinois Governor Pat Quinn delivered his FY 2014 budget address to the Illinois General Assembly on March 6, 2013, revealing a promising road to recovery for the state. In efforts to restore fiscal stability, the state will continue implementing spending reductions, including the consolidation of state facilities, the closing of several mental health institutions, and the restructuring of the state’s Medicaid program. Despite these efforts, pension reform remains a critical issue. To date, the governor acknowledges there has been no vote on a comprehensive pension reform bill – a solution needed to drive Illinois’ economy forward and generate revenue for more important initiatives.
While the need for additional cuts remains, the state’s overall proposed FY 2014 budget reflects a roughly $5 billion increase from FY 2013. The top vertical segment increases are in health care, general government, and economic development and regulation.
Despite an overall budgetary increase, Governor Quinn remains committed to encouraging agencies to follow a “do the same with less” approach. Areas that received the biggest cuts include education (PK-12), public finance and homeland security, as seen below. Many of these department cuts may be attributed to the elimination and consolidation of 75 boards and commissions.
Figure 1: Illinois All-Funds Budget Vertical Comparison
Although budget projections reflect departmental cuts in education, early childhood education is a valued top priority. The state remains committed to investing in early childhood education as well as after-school programs to improve higher education rates. In addition, while justice and public safety spending remains stagnant, the governor outlined vital plans to tackle the violence epidemic that has plagued Chicago and other Illinois communities.   
Specifics regarding the state’s IT expenditures were not highlighted in Governor Quinn’s budgetary address; however, the overall IT budget is expected to drop from the previous year. While there continues to be a need to maintain and upgrade the state’s technology systems, a greater need to improve efficiencies and correct financial mismanagement has stunted spending allocations for additional IT projects.
Analyst’s Take
The theme of this year’s budget is centered on doing more with less in order to restore fiscal growth. The lack of action on pension reform has exerted much pressure on resources that could be utilized for other important programs and services within education, economic development, public safety and human services. The state has been looking to tackle the pension crisis for several years as it has begun to affect funding levels for other core priorities. Although overall economic recovery is still tenuous at this point, once pension reform is under control, it is likely that the state will be able allocate more funds for IT projects that have been cut.
A complete analysis of the Illinois FY 2014 proposed budget is available here. Non sub-scribers can gain access with a GovWin IQ free trial.