2. Election produced the first politically divided government in over a decade Governor-elect ran on shaking up the status quo Few, if any, budgeting tricks remain. It’s time to pay the piper Opportunity (necessity) for bipartisan cooperation/solutions

3. Framework Have not made spending changes to prepare for income tax phase down Does not make repayment on over $6 billion in old bills Revenue estimate increased magically ($857 Million) to allow for higher spending levels Budget built on borrowing and fund sweeps which must be repaid Ignores best practices to grow the economy and tax revenue

4. Borrow money and call it revenue Ignore Constitutional mandate to spend only the available revenue: inflate estimated revenue, under value costs of programs Underfunded or skipped pension payments to expand other programs Continue to manage cash flow on the backs of suppliers – unpaid bills continue to grow, payments can take over a year Fund expansion in healthcare and pensions at expense of education….everything else

9. Higher Income Tax Rates Have Generated $31.5 Billion Source: Commission on Government Forecasting and Accountability. Fiscal Year 2015 Budget Summary

10. 10

11.  The Chicago Civic Foundation FY15 Budget analysis predicts a General Funds backlog of $6.4 billion at the end of FY15

12. Current fiscal challenges have been caused by: a.) not paying for benefits offered, b.) dishonest/unconstitutional budget practices, c.) shifting costs to “tomorrow” Solution to fiscal problems can only be achieved by major structural changes and honest budget practices

13.  Don’t spend more than realistic revenue projections  Fully implement enacted Medicaid reforms to ensure all individuals enrolled are truly eligible  Update operating practices for efficiency, reduced cost  Give stability/predictability to taxes and fees  Set priorities; budget for results

14.  Establish primary causation for worker’s compensation  Make Research and Development Tax Credit permanent  Abolish corporate franchise tax  Extend, permanently, the manufacturers’ purchase credit  Allow fracking with oversight  Expand Enterprise Zones authorization

15.  Reduce costs of establishing an LLC  Expand: STEM education, worker skill training grants, business coaching  Faster permit reviews  Reasonable regulations

16. Source: Regional Economics Applications Laboratory, Department of Economics, University of Illinois. Total Non-Farm EMPLOYMENT GROWTH RATE National Midwest Illinois 95.00 100.00 105.00 110.00 115.00 120.00 125.00 130.00 1990199219941996199820002002200420062008201020122014 National RMWIL

17.  Revenue will decrease by $3.5 billion as personal income tax phases back to 3.75% and corporate to 5.25%  Expenses for pension, underfunded programs, healthcare, required repayments will increase by over $2.5 billion  Unpaid bills will total over $6 billion  Tough union contract negotiations  Pension reform revisited  Major restructuring of programs

19. Source: Commission on Government Forecasting and Accountability. Economic and Revenue Outlook, February 19, 2014.

21. 21 Medicaid enrollment surpasses 3.2 million individuals in 2015