Illinois Update 1

2

3

4

Where does the State get its revenue? 9

Where do we spend the revenue? 10

5 agencies consume 80% of spending. 11

FY16 Outlook – Status Quo Budget Creates a Massive Deficit. 12 FY15 Spending$35,352 FY15 Gimmicks that add Pressure to FY16 Budget: $ 1,600 Interfund Borrowing, group insurance, Medicaid, Court of Claims, other program cost moved into FY16 Not Repeated in FY16 Other FY16 Pressures: Pension Contribution Increase$580 Medicaid (natural growth)$150 Community Care Program Liability$35 Retiree GHI Contribution Refunds$30 Group Health Insurance Liability Growth$190 DHS Child Care - FY15 Shortfall & FY16 Program$500 Department of Corrections Staffing$120 AFSCME Contract ? Total Identified FY16 Pressures$1,550 Total Identified FY16 Pressures $3,150 Plus Estimated FY16 Net Loss of Revenue $3,600 Potential FY16 Shortfall $6,700

The Budget Game Plan $30 Billion Revenue $32 Billion Spending $ 2 Billion Hole $ 2 Billion Reduction Pension Payment $ 0 Now Balanced 13

The Budget Game Plan $31 Billion Revenue $34 Billion Spending $ 3 Billion Hole $ 2 Billion Reduction Pension Payment $ 1 Billion Remaining Hole $ 1 Billion Delay Bill Payments $ 0 Now Balanced 14

The Budget Game Plan $32 Billion Revenue $35 Billion Spending $ 1 Billion Carried Over $ 4 Billion Hole $ 2 Billion Reduction in Pension $ 2 Billion Short $ 2 Billion in Delay Payments $ 0 Now Balanced 15

Reality Hits in 2010 Pension Underfunding hits $140 Billion Unpaid bills climb to $ 8 Billion Payment delays 6 – 12 Months Credit Rating drops to Lowest In Illinois History 16

The temporary tax increase to pay old bills brought in $30 Billion 17

Turn Around Plan 1) Implement Jobs Reforms 2) Cut Fat & Waste 3) Pension Reform 4) Targeted Reasonable & Humane Cuts 5) Restore Temporary Tax with 4 Year Sunset (only after 1-4 completed) 6) Capital Plan 18