: DEPOSITORY ILLINOIS ECONOMIC and FISCAL COMMISSION OCT 2 6 ?001 UNIVERSITY OF ILLINOIS ATJJRBANA-CHAMPAIGN FY 2002 BUDGET SUMMARY SEPTEMBER 2001 703 STRATTON OFFICE BUILDING SPRINGFIELD, ILLINOIS 62706 ILLINOIS ECONOMIC and FISCAL COMMISSION Commission Co-Chairs Senator Patrick D.Welch Representative Terry R. Parke SENATE HOUSE Miguel del Valle Mark H. Beaubien, Jr. Ricky R. Hendon Judy Erwin Chris Lauzen Frank J. Mautino John W. Maitland, Jr. Richard Myers Steven Rauschenberger Jeffrey M. Schoenberg EXECUTIVE DIRECTOR Dan R. Long DEPUTY DIRECTOR Trevor J. Clatfelter UNIT MANAGER Jim Muschinske CHIEF ECONOMIST Edward H. Boss, Jr. EXECUTIVE SECRETARY Donna K. Belknap STX FY 2002 BUDGET SUMMARY TABLE OF CONTENTS Page# Introduction Executive Summary The Budget Process Basis of Budgeting Description of Funds Glossary Fiscal Year 2002 Budget Bills Budget Summary • Education Funding • VentureTECH Funding • Health & Human Services • Public Safety • Illinois Natural Resources • Economic Development & Infrastructure • Federal Aid • Financial Highlights Capital Projects and Programs • Goals, Guidelines and Organization Debt Management • State Bond Sales • Illinois FIRST • Municipal Bond Ratings • General Obligation Bonds • Build Illinois • Refunding Bonds General Funds Outlook 14 14 16 17 17 20 20 21 21 22 26 27 41 41 42 43 43 48 49 50 Illinois Economic & Fiscal Commission General Funds Outlook 57 TABLE OF CONTENTS (continued) CHARTS, TABLES and APPENDICES : Page # Allocation of FY 2002 General Funds Appropriation Increase 15 State Revenue Sources Funding Education 16 Temporary Assistance for Needy Families (TANF) Caseload Information 18 Growth in KidCare Enrollments 19 FY 2002 Appropriations by Fund Group 23 FY 2002 Appropriations by Major Purpose 24 FY 2002 Revenues by Source 25 FY 2002 Budget Plan 25 FY 2002 Capital Program Projects 29-40 Outstanding Indebtedness 41 Bond Sales for Project Funding 42 General Obligation Multipurpose Bonds Authorization Summary 45 General Obligation Debt Outstanding 45 General Obligation Debt Service Fund Portions 46 General Obligation Debt Retired 46 General Obligation Debt as a Percent of Personal Income 47 General Obligation Debt Service as a % of GRF and Road Funds 47 General Obligation Debt Per Capita 47 Build Illinois Authorization 48 Savings from Refunding General Obligation Bonds 49 Savings from Refunding Build Illinois Bonds 50 Individual Income Taxes 52 Corporate Income Taxes 52 Sales Taxes 53 Public Utility Taxes 53 Cigarette Tax 54 Liquor Taxes 54 Inheritance Tax 55 Insurance Tax 55 Corporate Franchise Taxes and Fees 56 Investment Income 56 Other State Sources 56 Federal Aid 57 Transfers-In 57 IEFC - BoB Comparison FY 2002 58 Appropriations by Agency 59-68 General Funds Revenues by Source (FY 99 - FY 02) 69 State Officers' Salaries 70-74 Footnotes 75 INTRODUCTION Under Public Act 92-0067 (Senate Bill 502), which passed both the Senate and House unanimously, the Illinois Economic & Fiscal Commission is mandated by State Law to prepare and publish a BUDGET SUMMARY REPORT detailing Illinois' most recently passed budget. This report is to be made available to all citizens of the State of Illinois who request a copy. The summary report includes information pertaining to the major categories of appropriations, issues the General Assembly faced in allocating appropriations, comparisons with appropriations for previous State fiscal years and other information related to the current State of Illinois Budget. • • • • • EXECUTIVE SUMMARY The fiscal year 2002 budget, signed into law on June 11, 2001, includes total appropriations of $51.75 billion, including $23.36 billion in general funds appropriations. The FY 2002 Budget, as negotiated by the four respective caucuses and the Governor's Office, projects general funds revenues to total $25.0 billion, an increase of $894 million. Fiscal year 2002 expenditures are projected to total $25,126 billion. On June 30, 2001, the fiscal year 2001 general funds balance was $1,126 billion. On July 2, 2001, an additional $225 million was transferred from the Tobacco Settlement Recovery Fund to the Budget Stabilization Fund to give the state a total cash balance of $1,351 billion. The fiscal year 2002 projected end-of-year general funds balance is $1.0 billion, and the balance in the Budget Stabilization Fund is projected to be $230 million. In each year, the general funds balance is projected to exceed lapse period spending, resulting in positive budgetary balances. General funds appropriations increase $644 million in fiscal year 2002, with $460 million of the increase, or nearly 71 percent, dedicated to education. A projected $270 million shortfall in the State's Medicaid budget was closed ensuring Illinois will continue to pay its bills on time. The second year of the state's earned income tax credit, which is equal to five percent of the federal government's earned income tax credit, will provide $35 million in tax relief to low-income families in fiscal year 2002. The FY 2002 budget provides $72 million in new dollars to fund the expanded Circuit Breaker/Pharmaceutical Assistance Program for low-income elderly and disabled citizens. The tuition tax credit will provide an estimated $50 to $75 million annually in income tax relief to families that pay school expenses to support their children's education. The budget allocates $372.5 million from the Tobacco Settlement Recovery Fund in fiscal year 2002, with more than $51 million earmarked for smoking prevention programs. $107 million will fund the first full year of the expanded Circuit Breaker/Pharmaceutical Assistance Program, including a further expansion of the program to cover drugs for Osteoporosis. $159 million is appropriated for projects in the VentureTECH program for biotechnology and medical technology projects. New general funds appropriations increase $460 million, dedicating nearly 71 percent of general funds revenue growth of $644 million to education. The total general funds appropriation for education is $8.88 billion. FY 2002 Budget Summary Page 1 The fiscal year 2002 budget increases funding for General State Aid by $230.3 million. It includes the Education Funding Advisory Board's recommendation to increase the foundation funding level by $135, from $4,425 to $4,560. The budget also changes the per pupil count in the General State Aid formula and creates a new poverty formula. The fiscal year 2002 education budget provides $91 million in general funds to fund Teacher Retirement System pension and health care benefits for fiscal year 2002 and $8.0 million in general funds to fund State Universities Retirement System benefits. The fiscal year 2002 capital budget includes $740 million in new funding for the school construction program and a five-year, $250 million initiative for the state's community college campuses. The fiscal year 2002 budget dedicates $548 million, including $159 million from the Tobacco Settlement Recovery Fund, to support infrastructure construction and other VentureTECH projects. The FY 2002 budget includes funding for a $1.00 per hour wage increase to direct care workers for the developmentally disabled, which was effective and retroactive to March 1, 2001. An additional $11.8 million was budgeted to fund a 2.0 percent cost- of-living adjustment for community providers, effective April 1, 2002. During fiscal year 2001, the Department of Public Aid took action to curb growth in the Medicaid program. These actions, coupled with a $200 million supplemental appropriation, allowed fiscal year 2001 payment cycles to remain under 30 days. As a result of lower-than-projected liability, additional federal aid and other revenue sources, the Medicaid program will end fiscal year 2002 with a payment cycle of 30 days. The fiscal year 2002 GRF budget for the Department of Corrections increases $89.5 million from $1,213 billion to $1,303 billion. The budget fully funds 2,677 new beds that opened during fiscal year 2001, including the new 2,257-bed Lawrence Correctional Center in Lawrence County and the 420-bed Illinois Youth Center in Kewanee. The FY 2002 budget funds the final year of the parole initiative, doubling the number of parole agents from 183 to 366 to better monitor more than 31,000 parolees. The budget for the Illinois State Police is $385.7 million and provides funding for cadet classes that will graduate 100 officers in fiscal year 2002. The budget includes $1.8 million in general funds and $1.0 million from the State Police Vehicle Fund to replace 135 high-mileage patrol cars. The Department of Natural Resources' budget includes $40 million for the third year of the four-year, $160 million Illinois Open Land Trust plus an additional $40 million for other land acquisitions under the program. The fiscal year 2002 budget for the Department of Commerce and Community Affairs (DCCA) provides an additional $25 million in Build Illinois funds for the FY 2002 Budget Summary Page 2 • • • Prime Sites program, to develop sites that will attract new business to the state or allow existing firms to expand. The Illinois Tomorrow program is allocated $1.0 million to coordinate economic development and environmental planning, and an additional $6.0 million in Coal Development Bond funds is budgeted for projects to increase the use of high sulfur coal in Illinois. In response to record-low winter temperatures and high home heating costs, the federal government provided additional funding for the Low Income Home Energy Assistance Program (LIHEAP). The enacted budget included a fiscal year 2001 supplemental of $80 million for the program. In addition, eligibility for the program was increased from 125 percent to 150 percent of the federal poverty level, giving an additional 142,000 households the opportunity to receive assistance. The budget for the Department of Agriculture includes $3.0 million for the Illinois AgriFIRST program, which will expand agribusiness, marketing opportunities and value-added ventures. Fiscal year 2002 marks the third year of the Illinois FIRST infrastructure initiative. The budget funds a $2.3 billion road program to enable the Department of Transportation to build and repair roads and bridges statewide. The capital program also includes $96.0 million for public transportation projects. The capital budget provides an additional $50 million in appropriations for the Abraham Lincoln Presidential Library and Museum in Springfield, which will serve as an advance against future federal contributions. FY 2002 Budget Summary Page 3 THE BUDGET PROCESS The Illinois Constitution requires the Governor to prepare and submit a state budget to the General Assembly that includes recommended spending levels for state agencies, estimated funds available from tax collections and other sources, and state debt and liabilities. The Bureau of the Budget, by statute a part of the Governor's office, is responsible for estimating revenues and developing budget recommendations that reflect the Governor's programmatic and spending priorities. The budget process for the next fiscal year begins almost as soon as appropriations for the current fiscal year, which begins July 1, are enacted. Analysts and agency staff identify and estimate the cost of potential spending pressures for the next fiscal year, including maintaining or annualizing current program levels, expanding services for existing programs and initiating new programs. The Bureau reviews the revenue estimates for the current fiscal year and makes preliminary estimates for the coming fiscal year. The Illinois Economic and Fiscal Commission, a joint legislative commission, also makes preliminary revenue estimates for the coming fiscal year. During November and December, a detailed financial and programmatic review is conducted of agency budgets. Funding requests typically exceed available resources. Once budget options are developed, they are presented to the Governor for his final decisions. Narrative statements explaining the budget and complete budget request forms are printed in the budget book. Concurrent with the operations and grants budgeting process, agencies also develop a capital budget. The Capital Development Board conducts a technical review and prepares cost estimates for state facility projects for which it will be responsible. Other types of capital projects such as highway construction, mass transit and airport facilities, alternative energy or school facilities are reviewed by other state agencies. Once reviewed, projects are ranked by category considering need, availability of resources and the Governor's priorities regarding repair and maintenance projects versus new construction. Appropriation bills are drafted to implement the Governor's budget recommendations. The budget may be introduced either as a series of agency appropriation bills or as a single piece of legislation. The Governor presents his recommended budget to a joint session of the Illinois General Assembly. By law, the Governor must present his budget to the General Assembly no later than the third Wednesday in February of each year. In addition to the Governor's official presentation, briefings are held to acquaint legislators, their staffs, the media and others with the budget recommendations. Legislative review of the Governor's budget recommendations begins almost immediately with hearings before House and Senate appropriation committees. Appropriation committees may adopt amendments to change the funding level recommended by the FY 2002 Budget Summary Page 4 Governor. Once adopted by the first committee, the appropriation bill moves to the full House or Senate for debate, amendment and a vote. Following passage in the first chamber, the appropriation bill moves to the second chamber, where a similar process takes place. Changes made in either chamber must ultimately be accepted by both for the bill to pass and be presented to the Governor. As the budget moves through the legislature, any amendments as well as substantive legislation is analyzed to identify potential fiscal impacts. By statute, any proposed amendments to the budget and any substantive legislation with fiscal or revenue impacts must be accompanied by a Fiscal Note to describe such impacts. Final approval of the budget usually does not occur until the end of the legislative session. Appropriation bills require an immediate effective date in order to be available for expenditure at the beginning of the fiscal year, July 1. The Illinois Constitution requires a simple majority vote of the General Assembly for a bill passed on or before May 31 to take effect immediately. On or after June 1, a three-fifths vote of the General Assembly is required in order for a bill to take effect immediately. Once the General Assembly passes the budget, the Governor must sign the appropriation bills before funds can be spent. If the Governor does not want to approve a specific appropriation, he may either line item veto (eliminate) it or reduce it. The rest of the appropriation bill is unaffected by these vetoes and becomes effective. Line items that have been vetoed or reduced must be reconsidered by the General Assembly during the fall session. The General Assembly may return an item to the enacted level by majority vote in both houses in the case of a reduction veto and by a three-fifths vote in the case of a line item veto. If additional resources beyond those initially approved in the budget become necessary, a supplemental appropriation bill may be passed any time the General Assembly is in session. BASIS OF BUDGETING Over time, the Illinois budget has been viewed as balanced in several ways, both at the time it is presented by the Governor and at the time it is passed by the General Assembly. Illinois' daily activities and annual budget historically have been operated and presented on a cash basis. Expenditures are made from the available cash balances on hand, and the budget balances estimated expenditures with estimated resources. The state's Comprehensive Annual Financial Report, however, conforms with generally accepted accounting principles as prescribed in pronouncements of the Governmental Accounting Standards Board. Effective fiscal year 1999, Public Act 90-479 amended the Civil Administrative Code to provide guidance to the Governor, as he proposes the budget, and to the General Assembly, as it makes appropriations, regarding the balanced budget requirements in the state constitution. This act incorporates aspects of a modified accrual basis into the budget process for certain designated funds, including the general funds. FY 2002 Budget Summary Page 5 State law and the constitution require the Governor to prepare and submit to the General Assembly an Executive Budget for the next fiscal year, which sets forth the Governor's recommended appropriations, estimated revenues from taxes and other sources, estimated balance of funds available for appropriation at the beginning of the fiscal year, and the plan for expenditures during the fiscal year for every department of the state. Constitutionally, the Governor must balance the budget by proposing expenditure recommendations that do not exceed funds estimated to be available for the fiscal year. The budget includes most state funds but excludes locally-held funds and those state funds that are not subject to appropriation pursuant to state law. It is submitted by line item with accompanying program information, including personnel and capital detail, and performance and activity measures. The General Assembly makes appropriations for all expenditures of public funds. Constitutionally, the General Assembly must balance the budget by appropriating amounts not to exceed funds they estimate to be available during the year. The Governor has the power to approve, reduce or veto each appropriation passed by the General Assembly, and the General Assembly may override these vetoes. Transfers in and out of funds pursuant to law or discretionary acts of the Governor are not part of the appropriation process. The state general funds include the Common School Fund, the General Revenue- Common School Special Account Fund, the Education Assistance Fund and the General Revenue Fund. All state revenues, not otherwise restricted by law, including the majority of the state's major revenue sources, the income and sales taxes, are deposited into these funds to specifically fund education programs and to generally fund the rest of state government. DESCRIPTION OF FUNDS There are approximately 600 funds in the Illinois accounting system. These funds are separated into two categories —Appropriated and Non- Appropriated Funds. The Appropriated Funds category is further broken into eight fund groups: General, Highway, Special State, Bond Financed, Debt Service, Federal Trust, Revolving and State Trust Funds. The Non- Appropriated Funds category is composed primarily of Federal and State Trust Funds, and includes a few Special State Funds. General Funds receive the major portion of tax revenues and pay for the regular operating and administrative expenses of most state agencies. Components of the general funds are the General Revenue Fund, the Education Assistance Fund, the Common School Fund and the General Revenue-Common School Special Account Fund. Highway Funds receive and distribute special assessments related to transportation, such as the motor fuel tax, and support the construction and maintenance of transportation facilities and activities of the state. FY 2002 Budget Summary Page 6 University Funds receive revenues such as fees, tuition and excess income from auxiliary enterprises at state universities and colleges, including related foundations and associations. Prior to fiscal year 1998, the General Assembly appropriated these funds for the support, operation and improvement of state-supported institutions of higher education. Starting in fiscal year 1998, the university funds became locally-held funds and, together with other funds administered by the universities, are not subject to appropriation. Special State Funds are designated in Section 5 of the Finance Act as special funds in the State Treasury and not elsewhere classified. They represent a segregation of accounts restricted to the revenues and expenditures of a specific source. Bond Financed Funds receive and administer the proceeds of various state bond issues. Debt Service Funds account for the resources obtained and accumulated to pay interest and principal on debt obligations. Federal Trust Funds are established pursuant to grants and contracts between state agencies and the federal government. The funds are administered for specific purposes established by the terms of the grants and contracts. Revolving Funds finance the operations of state agencies that render services to other state agencies on a cost reimbursement basis. Appropriation of these funds is dependent upon intra-governmental service requirements and appropriations of other state agencies. State Trust Funds are established by statute or under statutory authority for specific purposes. Other Trust Funds receive and account for resources for subsequent disbursement to a designated recipient. Escrow funds are an example of an Other Trust Fund. GLOSSARY Activity Measure -information or data used to count the delivery of state services; for instance, the number of people served and the number of cases closed. All Funds -every fund appropriated to or spent by an agency. Annualize -to provide full-year funding in the next fiscal year when a program is started or a person is hired part way through the current fiscal year. Appropriation -spending authority from a specific fund given by the General Assembly and approved by the Governor for a specific amount, purpose and time period. Assessments -a levy imposed for a specific purpose, typically the medical assessment program under which the Department of Public Aid levies a fee on long-term care and other providers to help fund Medicaid liability. Attrition -a natural reduction in caseload or staff; for example, from retirement or resignation. FY 2002 Budget Summary Page 7 Available Fund Balance -the total amount of money in a fund at a particular point in time, typically at the beginning of a month or the year. Basis of Accounting -the method of accounting used to track and report state revenues and expenditures; for example, cash, budgetary or accrual. Bond Fund -a fund that receives proceeds from the sale of bonds to be used for capital projects. Bond Rating -an assessment of the credit risk with respect to a specific bond issue. Bond Retirement and Interest Fund -a fund used to repay principal and interest on bonds or other debt obligations, typically spent pursuant to a continuing and irrevocable appropriation. Budgetary Balance -available cash balance on June 30, minus lapse period spending for the fiscal year just ended. Build Illinois -a state economic development and public infrastructure program begun in 1986 and primarily funded by dedicated state sales tax revenue bonds. Capital -buildings, structures, equipment and land. Acquisition, development, construction and improvement of capital are typically funded through bond funds. Case Management -monitoring and oversight of the delivery of services, which may include coordination of all services to a client. Caseload -the number of clients being served at a point in time, sometimes used in the context of clients per staff. Cash Flow -the amount of cash available for use during a period of time, calculated by subtracting spending from the sum of the receipts and the beginning balance. Census -population measure, typically of clients in a facility or program. Certificate of Participation -similar to bonds or other debt instruments, a security issued by the state or a third party that gives the holder a share of the stream of annual appropriated lease payments made by the state. Client -a person or family receiving services, typically from a human service agency. Commodities -line item for consumable items used in connection with current agency operations; for instance, household, medical or office supplies; food for those in institutions; coal, bottled and natural gas; and equipment costing less than $100. Common School Fund -one of four funds that comprise the state general funds. It is used to fund Elementary and Secondary Education. If revenues to the fund from the lottery, bingo, public utility, cigarette and sales taxes and from investment income, among others, are insufficient to make monthly general state aid payments, the Common School Fund receives automatic transfers from the General Revenue Fund. Consent Decree -an agreement between both parties in a lawsuit that binds them and determines their rights and obligations. While made under sanction of the court, it does not bind the court, and it is not a judicial sentence. FY 2002 Budget Summary Page 8 Continuing Appropriation -statutory authority for the Comptroller and Treasurer to spend funds in the event the legislature fails to appropriate or appropriates an insufficient amount for a specified purpose. Examples of continuing appropriations are for debt service on state bonds or payments to the state retirement systems. Contractual Services -line item for services provided by a non-state employee or vendor including, utilities; medical services for those in institutions; professional, technical or artistic consulting; and property and equipment rental. Debt Service -payment of principal, interest and other obligations associated with the retirement of debt. Dedicated Funds -revenues assessed and collected for a specific state program. Divisions -organizational units within agencies designated as such for programmatic or administrative convenience. Education Assistance Fund -one of four funds that comprise the state general funds. It is used to fund Elementary, Secondary and Higher Education. It receives 7.3 percent of the state income tax net of refunds, as well as wagering taxes paid to the state by riverboat casinos. Electronic Data Processing -line item for lease or purchase of computer or other data processing equipment and related services including supplies, services and personnel. Employee Retirement Contributions Paid by State (Pension Pick-Up) -line item for payment of an employee's required contribution to the State Employees' Retirement System, which an agency has chosen or contracted to make on behalf of the employee. Entitlement -program benefits that must be provided in a timely fashion to those who meet eligibility criteria and that may not be taken away without due process. Equipment -line item for non-consumable items of tangible personal property used in connection with current agency operations; for instance office furniture, vehicles or machinery, and scientific or other major instruments and apparatus. Executive Branch -distinguished from the legislative and judicial branches of state government, it is charged with the detail of carrying out and effectuating the law through the day-to-day operations and activities of state government. The Governor, as chief executive officer of the state, is responsible for the operation and administration of state agencies. Executive Order -a decree or mandate issued by the Governor for the purpose of interpreting or implementing a provision of the law. Executive orders often are used to reorganize and assign functions among executive agencies, create advisory and special commissions and boards or direct state agencies regarding policy. Expenditure -state spending. Agencies submit vouchers to the Comptroller's Office, which prepares a state check (warrant) and maintains accounting records. Warrants are presented to the Treasurer, who maintains and invests state funds. Federal Aid -funding provided by the federal government. FY 2002 Budget Summary Page 9 Fiscal Year -Illinois state government's fiscal year is July 1 through June 30. This is the period during which obligations are incurred, encumbrances are made and appropriations are expended. The federal government's fiscal year is October 1 through September 30. Full Faith and Credit -a pledge or promise to repay general obligation debt; typically includes all of an issuer's taxing powers. Full- Time Equivalent -a calculated measure of full-time employment for comparison purposes, in which each full-time employee works 37.5 hours per week for 52 weeks per year. Fund -an account established to hold money for specific programs, activities or objectives. General Funds -(usually lower-case) refers to the following group of funds, inclusively: the General Revenue Fund, the Education Assistance Fund, the Common School Fund, and the General Revenue -Common School Special Account Fund. General Obligation Bonds -bonds issued for capital purposes as direct legal obligations secured by general tax revenues and guaranteed by the full faith and credit of the state. General Revenue -Common School Special Account Fund -one of four funds that comprise the state general funds. It is used for accounting purposes to receive 25 percent of state sales tax and subsequently transfer these moneys to the Common School Fund. General Revenue Fund -the largest of four funds that comprise the state general funds. It receives the majority of undedicated tax revenues, mostly income and sales taxes, for use generally to operate and administer state programs. General State Aid -an unrestricted formula-driven grant that comprises the largest portion of state assistance to local school districts. The amount of funds a district receives depends on its financial need measured by three factors: its average daily attendance, its equalized assessed valuation of property and its local tax measured by its statutory tax rate. Grant -an award or contribution to be used either for a specific or a general purpose, typically with no repayment provision. Group Insurance -line item for life and health insurance program for all state employees, retirees and their dependents. Headcount -a statement of the number of employees for some period of time, typically either the actual number of staff working or a calculated full-time equivalent. Highway Fund -a fund that receives special dedicated revenues related to transportation; for example, the motor fuel tax or federal highway trust funds, to be used to support the construction and maintenance of transportation facilities and activities. Hiring Lag -the- savings in personal services and benefits associated with the time period between an employee leaving the job and a replacement being hired. Illinois FIRST -a $12 billion, multi-year public works initiative begun in 1999 and funded by a combination of local, state and federal resources. FY 2002 Budget Summary Page 10 Income Tax Surcharge -a temporary increase of 0.5 percent in the state personal income tax and 0.8 percent in the corporate income tax established in July 1989 to fund education, local governments and property tax relief. Subsequently, in July 1991, one- half of the surcharge was made permanent and dedicated to education. The remaining one-half was made permanent in July 1993. Infant Mortality -measure of infant deaths during the first year of life per 1000 live births. Judicial Branch -distinguished from the legislative and executive branches of state government, it is charged with interpreting and applying laws. Lapse -the portion of an appropriation that is not spent during the authorized period, typically the fiscal year, including the lapse period. Lapse Period -the two-month period following the fiscal year (July 1 to August 31) when agencies can liquidate liabilities incurred before the end of that fiscal year (June 30). Public Act 89-511, effective in fiscal year 1997, reduced the lapse period from three months to two months. Lapse Period Spending -spending that occurs during the lapse period from the previous year's appropriation. Legislative Branch -distinguished from the judicial and executive branches of state government, it is charged with making and enacting the law, including appropriations. Legislative Transfer -reallocation of appropriation amounts among line items by the General Assembly during the fiscal year. Distinguished from a two- percent transfer, which may be accomplished by the executive branch without participation of the legislative branch. Line Item -specific purpose of an appropriation; for instance, personal services, retirement, printing or travel. Liquidate -to settle or pay a debt or to convert assets into cash. Local Government Distributive Fund -receives 1/10 of the income tax proceeds to the general funds, via a transfer, for distribution to units of local government based on population. Funds may be used for any purpose. Lump Sum -appropriation line for a general program purpose without specific line items identified. Managed Care -the process of coordinating and controlling all services provided to a client to assure efficient and effective results. Mandate -a law or regulation that generally should be followed, whether or not funding is provided. The State Mandates Act permits certain regulations and laws to be ignored if funding is not provided. Match -contribution to program required to receive a program grant, may be either money, "hard match", or services, "soft match". FY 2002 Budget Summary Page 1 1 Medicaid -public assistance financed jointly by the state and federal governments to provide medical care for individuals who meet certain eligibility criteria. Moral Obligation -a duty that is not binding or enforceable by law, typically debt service on bonds issued by others that the state agrees to consider funding if the issuer is unable to pay. There is no legal guarantee the state will make such payments. Other Funds -all state and federal funds except the four general funds. Other Operations -administrative non-grant expenses of state agencies except salaries and payments for fringe benefits; for example, contractual services, travel, printing and telecommunications . Per Diem -by the day. An amount of so much for each day. Performance Measure -information or data used to determine the quality and outcomes of state services; for instance, the number of people who receive jobs following job counseling and employment services or the number of people who remain off drugs following treatment services. Personal Services -line item for salary payments to employees. Phase-In -staged expenditure pattern, such as initiating a program, hiring employees or opening an institution over time (see Annualize). Pilot Program -tentative model for future full scale development, typically a program operated in a limited area or targeted to a limited population to analyze its effectiveness before expanding its scope. Position Title -name and description of a job. Printing -line item for contractual services, materials and supplies used to produce and print information; for example, letterhead stationery, annual reports and forms. Program Area -major organizational categories of state government, including education, human services, public safety, environment and business regulations, economic development and infrastructure and government services. Reappropriation -an unspent appropriation that continues into the next fiscal year, typically for a capital or other multi-year project or liability. Recommended -Governor's budget requests presented to the General Assembly for its approval. Refunding Bonds -bonds issued to refinance other outstanding bonds, which generally were originally issued at higher interest rates. Refunds -line item for return of funds to the rightful owner, typically return of overpaid taxes or fees. Repair and Maintenance -line item for upkeep, restoration and improvement of equipment and facilities in connection with current agency operations. FY 2002 Budget Summary Page 12 Reserve -portion of appropriation intentionally set aside and not spent, either to increase lapse or as a contingency for increased liabilities in other line items. Resources -all assets available for use by agencies, whether appropriated or not. Retirement -line item for employer's share of contributions to the state retirement system. Revenues -receipts from taxes, fees, assessments, grants and other payments used to fund programs. Revolving Fund -receives intergovernmental payments charged for providing central operational services, such as computer, purchasing, state garage and telecommunications. Road Fund -receives motor fuel tax and other transportation-related revenues for use to operate the Department of Transportation, Illinois State Police and the Secretary of State's Office and to build and maintain roads, bridges and other transportation facilities. Social Security -line item for employer's share of contributions to the Federal Insurance Contributions Act (PICA) tax. Special State Funds -all state funds except the general funds, bond-financed funds, debt service funds and state trust funds. State Agency -government organization created by statute to administer and implement particular legislation. Statute -a law enacted by the General Assembly and approved by the Governor. Substitute Care -a program to place children away from their families in foster homes or residential facilities. Supplemental Appropriation -additional spending authority given by the General Assembly during the fiscal year, following passage of the initial budget. Transfer -reallocation of resources, typically movement of money from one fund to another or shift of appropriation authority among line items by the legislative or the executive branch. Trust Fund -receives revenues assessed and collected for a specific state program. Two Percent Transfer -reallocation of appropriation amounts by the Governor during the fiscal year. Limited to two percent of an agency's appropriation by fund for specific operations lines. Distinguished from a legislative transfer, which requires approval by the legislative branch. Voids -checks (warrants) that are not cashed. Voucher -document requesting payment submitted to the Comptroller, who then writes and issues a warrant. Warrant - check issued by the Comptroller to a third party who cashes it with the Treasurer. Zero Coupon Bonds -bonds without interest coupons for semi-annual payment. Interest accrues over the life of the bond and is paid on maturity along with the principal. FY 2002 Budget Summary Page 13 FY 2002 BUDGET BILLS Bill # Sponsor Description Public Act # FY 2002 Budget bill HB 3440 H: Madigan, MJ - Daniels S: Rauschenberger - Trotter $FY 2002 Omnibus Budget Appropriations Bill 92-0008 FY 2002 Bond Authorization bills HB 2125 H: Daniels - Madigan, MJ S: Weaver General Obligation Bond Act increase 92-0013 HB 3489 H: Madigan, MJ - Daniels S: Weaver Build Illinois Bond Act increase 92-0009 FY 2002 Budget Implementation bills HB 3491 H: Madigan, MJ - Daniels S: Rauschenberger FY 2002 Budget Implementation (Human Services) Act 92-0010 HB 3493 H: Madigan, MJ - Daniels S: Rauschenberger FY 2002 Budget Implementation (State Finance) Act 92-0011 BUDGET SUMMARY The fiscal year 2002 budget, signed into law on June 11, 2001, includes total appropriations of $51.75 billion, including $23.36 billion in general funds appropriations. The FY 2002 Budget, as negotiated by the four respective caucuses and the Governor's Office, projects General funds revenues to total $25.0 billion, an increase of $894 million. Fiscal year 2002 expenditures are projected to total $25,126 billion. On June 30, 2001, the fiscal year 2001 general funds balance was $1,126 billion. On July 2, 2001, an additional $225 million was transferred from the Tobacco Settlement Recovery Fund to the Budget Stabilization Fund to give the state a total cash balance of $1,351 billion. The fiscal year 2002 projected end-of-year general funds balance is $1.0 billion, and the balance in the Budget Stabilization Fund is projected to be $230 million. In each year, the general funds balance is projected to exceed lapse period spending, resulting in positive budgetary balances. FY 2002 Budget Summary Page 14 General funds appropriations increase $644 million in fiscal year 2002, with $460 million of the increase dedicated to education. The following chart outlines the allocation of the FY 2002 General Fund appropriation increase of $644 million. Allocation of FY2002 Appropriation Increase $644 Million General Funds S500 - 3<*OU S400 - V '^.'\ $300 - .;'-■ ,..'.....' . S200 - ■ '^ " ' "• '.- """"'V $100 - v ■ '■'.',• V ""? JO - $100 - 1 Education/ Job Training $90 $80 UrC ' '^W'l: $37 ($23) Corrections Dept. of Human Services Elected/ Judicial All Other The fiscal year 2002 budget is based on Illinois' strong and diverse economy, but reflects the slower economic growth realized during fiscal year 2001. Revenue projections are premised on forecasts of slower economic growth, as well as anticipated low rates of inflation and slightly higher unemployment. Economists also project lower gains in wages and salaries, personal income and nonfarm payroll jobs. The budget includes no tax increase, but provides ongoing tax relief to Illinois citizens. The second year of the state's earned income tax credit, which is equal to five percent of the federal government's earned income tax credit, will provide $35 million in tax relief to low-income families in fiscal year 2002. The budget also provides $72 million in new dollars to fund the expanded Circuit Breaker/Pharmaceutical Assistance Program for low-income elderly and disabled citizens. Effective January I, 2001, the household income limit for the program was increased and the illnesses covered under the program were expanded. Finally, the tuition tax credit will provide an estimated $50 to $75 million annually in income tax relief to families that pay school expenses to support their children's education. The budget allocates $372.5 million from the Tobacco Settlement Recovery Fund in fiscal year 2002, with more than $51 million earmarked for smoking prevention programs. To fund ongoing tax relief, $35 million is allocated for the second year of the state's earned income tax credit and $107 million will fund the first full year of the expanded Circuit Breaker/Pharmaceutical Assistance Program, including a further expansion of the program to cover drugs for Osteoporosis. Tobacco funds of $25 million support medical research and treatment, and $159 million is appropriated for projects in the Governor's VentureTECH initiative for biotechnology and medical technology projects. FY 2002 Budget Summary Page 15 EDUCATION FUNDING New general funds appropriations increase $460 million, dedicating nearly 71 percent of general funds revenue growth to education. The total general funds appropriation for education is $8.88 billion. The fiscal year 2002 budget increases funding for General State Aid by $230.3 million. It includes the Education Funding Advisory Board's recommendation to increase the foundation funding level by $135, from $4,425 to $4,560. The budget also changes the per pupil count in the General State Aid formula and creates a new poverty formula. State Revenue Sources Funding Education ($ millions) $10,000 j $9,000 - $8,000 - $7,000 - $6,000 - $5,000 - $4,000 $3,000 - $2,000 -{ $1,000 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 I Lottery DRiverboats □ Income Tax Surcharge ED General Funds The education budget provides a general funds increase of $38.6 million to fund mandated categorical programs at 100 percent for a third consecutive year. This funding reimburses school districts for the cost of mandated state programs such as special education, transportation and school lunches. The fiscal year 2002 education budget also provides $91 million in general funds to fund Teacher Retirement System pension and health care benefits for fiscal year 2002 and $8.0 million in general funds to fund State Universities Retirement System benefits. , Fiscal year 2002 funding for Early Childhood Education increases by $4 million and a $2 million increase is provided for the Jobs for Illinois Graduates program. Other increases include $3 million for the Summer Bridge program and $2 million for alternative schools. The fiscal year 2002 budget increases funding for the state's Early Intervention program by $25.7 million and transfers funding for the program from the Department of Human Services to the State Board of Education. The program helps disabled children from birth FY 2002 Budget Summary Page 16 through age three to reach their highest level of self-sufficiency and prepares them to achieve their fullest potential in school. Funding for state colleges and universities increased by $157 million. The Monetary Award Program receives an increase of $10.7 million to raise the maximum award $228, from $4,740 to $4,968. The budget provides an additional $57.9 million for faculty salaries and an increase of $9.0 million for adult education. The fiscal year 2002 capital budget includes $740 million in new funding for the school construction program and a five-year, $250 million initiative for the state's community college campuses. Capital recommendations for the Board of Higher Education total $248 million, including $16 million to renovate the library at Chicago State University, $40 million to renovate and expand the Fine Arts Center at Eastern Illinois University, and the initial $15 million to build a $30 million classroom and office building at the University of Illinois in Springfield. VentureTECH FUNDING The VentureTECH program is a multi-year initiative supporting research, development and infrastructure improvements in the sciences, biotechnology and information technology. The program includes capital funding for new higher education research facilities, funding for the new Illinois Virtual High School, as well as efforts linking the public and private sectors making Illinois more competitive in the changing global economy. In addition to the original VentureTECH proposal, FY 2002 expands the multi-year program to include projects targeting bioinformatics, biotechnology and nanotechnology. The fiscal year 2002 budget dedicates $548 million, including $159 million from the Tobacco Settlement Recovery Fund, to support infrastructure construction and other VentureTECH projects. Among the projects to be funded is the fiscal year 2002 share of the state's $30 million commitment for a biomedical building at Northwestern University. The fiscal year 2002 budget also includes $13.8 million in tobacco funding for the Excellence in Academic Medicine program, which provides academic medical centers that serve low-income patients with the matching funds needed to access federal and private dollars for research. VentureTECH also contains approximately $6.0 million to promote new businesses and products resulting from Illinois research. HEALTH AND HUMAN SERVICES The fiscal year 2002 budget for the Department of Human Services (DHS) totals $5.0 billion, including $3.8 billion in general funds to support health and social service programs that help families continue to move from welfare to work. The FY 2002 budget FY 2002 Budget Summary Page 17 includes funding for a $1.00 per hour wage increase to direct care workers for the developmentally disabled, which was effective and retroactive to March 1, 2001. An additional $11.8 million was budgeted to fund a 2.0 percent cost-of-living adjustment for community providers, effective April 1, 2002. The Department of Human Services expects its Temporary Assistance for Needy Families (TANF) caseload to continue to fall in fiscal year 2002 to an estimated 61,000 cases. To assist families entering the workforce, fiscal year 2002 funding for state- subsidized childcare will provide care to 221,000 children, an increase of 4.2 percent over the fiscal year 2001 estimate. TANF Cases at Lowest Level in 30 Years Child Care Enrollment at All-Time High 250,000 200,000 150,000 100,000 50,000 FY01 Budget KYul Eiumattd FY02 Budget -DHS Child Care: Average Monthly Children -TANF: Average Monthly Payment Cases A $3.5 million investment in the Workforce Advantage program will target economically disadvantaged communities to coordinate and leverage state programs benefiting the area. The FY 2002 budget also includes $2.0 million in general funds for the Great START program, which benefits day care employees, and $2.0 million for initiatives involving the state's juvenile justice system. The Department of Public Aid's (DPA) budget totals $8.0 billion, including nearly $5.3 billion in general funds, to continue to provide health care to uninsured children. Through May 2001, about 158,000 children and pregnant women were enrolled in the KidCare program, and enrollments are projected to continue growing in fiscal year 2002. FY 2002 Budget Summary Page 18 Growth In KidCare Enrollments 180,000 160,000 140,000 120,000 100,000 80,000 60,000 - 40,000 20,000 142,556 157,946 109,028 Governor's KidCare Outreach Campaign 0-f Oct-98 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 During fiscal year 2001, DPA took action to curb growth in the Medicaid program. These actions, coupled with a $200 million supplemental appropriation, allowed fiscal year 2001 payment cycles to remain under 30 days. As a result of lower-than-projected liability, additional federal aid and other revenue sources, the Medicaid program will end fiscal year 2002 with a payment cycle of 30 days. The FY 2002 budget restores $22 million in pharmacy reimbursement reductions implemented in fiscal year 2001. It also provides $70 million to update long-term care rates to account for more recent cost reports, and provides additional targeted hospital funding. The Department of Children and Family Services (DCFS) has led the nation in coordinating adoptions for three years in a row. The agency projects there will be 5,550 adoptions and guardianships in fiscal year 2001 and 5,105 in fiscal year 2002. Funding for adoptions and guardianships increases $36.7 million, or 17.0 percent. The fiscal year 2002 budget for DCFS provides a $6.4 million increase in overall funding, while general funds appropriations decline nearly $2.0 million. Due to a number of reforms, the department has significantly reduced the number of children taken into state custody each year. These changes, together with a dramatic increase in the number of children being moved into permanent homes, are expected to result in a 13.7 percent reduction in the foster care caseload in fiscal year 2001 and a 10.1 percent reduction in fiscal year 2002. As a result, the foster care budget for fiscal year 2002 decreases by $33.8 million, or 8.2 percent, from fiscal year 2001. The Department on Aging's Community Care Program, which provides services to eligible persons who might otherwise be placed in nursing homes, has a funding level of $205.5 million to allow the department to serve approximately 40,670 clients a month. FY 2002 Budget Summary Page 19 PUBLIC SAFETY The fiscal year 2002 GRF budget for the Department of Corrections increases $89.5 million from $1,213 billion to $1,303 billion. The budget fully funds 2,677 new beds that opened during fiscal year 2001, including the new 2,257 -bed Lawrence Correctional Center in Lawrence County and the 420-bed Illinois Youth Center in Kewanee. The budget also funds the final year of the parole initiative, doubling the number of parole agents from 183 to 366 to better monitor more than 31,000 parolees. The budget for the Illinois State Police is $385.7 million and provides funding for cadet classes that will graduate 100 officers in fiscal year 2002. The budget includes $1.8 million in general funds and $1.0 million from the State Police Vehicle Fund to replace 135 high-mileage patrol cars. A general funds increase of $1.5 million will increase the number of forensic scientists working with state and local police agencies to solve crimes. ILLINOIS' NATURAL RESOURCES The Department of Natural Resources' budget includes $40 million for the third year of the four-year, $160 million Illinois Open Land Trust plus an additional $40 million for other land acquisitions under the program. About $11.7 million in new funds is budgeted for ongoing activities under the Conservation 2000 program to preserve and enhance wildlife habitats and to increase recreational facilities. The enacted budget dedicates $9.5 million for the Conservation Reserve Enhancement Program, a $500 million, multi-year federal-state program to reduce erosion and restore wetlands and habitats along the Illinois River. The Environmental Protection Agency's fiscal year 2002 budget increases $179.7 million to accommodate the appropriations needed to initiate a new leveraged water revolving loan program. The agency's budget provides $12 million to fund the 20 percent match required to capture $60 million in federal funds, $70 million for loan repayments as well as an additional $50 million to be generated by leveraging the existing Water Pollution Control Revolving Loan program. These funds help local governments install and improve sewer and wastewater treatment facilities. Similarly, the budget includes $7 million to provide the 20 percent match required to capture $35 million in federal funds, $3 million for loan repayments and an additional $25 million to be generated by leveraging the Drinking Water Revolving Loan program. These funds assist local governments and privately owned community water suppliers with funding for drinking water infrastructure projects. The budget also includes $2.0 million for the Green Illinois initiative, which incorporates pollution prevention and energy efficiency practices into the operations of state and local government. An additional $1 million in funding is allocated for the Household FY 2002 Budget Summary Page 20 Hazardous Waste Collection program. A total of $5.4 million in state resources is budgeted for the Illinois Rivers 2020 initiative. ECONOMIC DEVELOPMENT AND INFRASTRUCTURE The fiscal year 2002 budget for the Department of Commerce and Community Affairs (DCCA) provides an additional $25 million in Build Illinois funds for the Prime Sites program, to develop sites that will attract new business to the state or allow existing firms to expand. A $3.9 million increase from the Tobacco Settlement Recovery Fund will support an expansion of marketing technology initiatives to enhance Illinois' role as the fourth largest technology economy in the country. The Illinois Tomorrow program is allocated $1.0 million to coordinate economic development and environmental planning, and an additional $6.0 million in Coal Development Bond funds is budgeted for projects to increase the use of high sulfur coal in Illinois. Funding for the Industrial Training Program increases by $1.5 million to upgrade the skills of an additional 5,800 workers at 200 companies. In response to record low winter temperatures and high home heating costs, the federal government provided additional funding for the Low Income Home Energy Assistance Program (LIHEAP). The enacted budget included a fiscal year 2001 supplemental of $80 million for the program. In addition, eligibility for the program was increased from 125 percent to 150 percent of the federal poverty level, giving an additional 142,000 households the opportunity to receive assistance. The budget for the Department of Agriculture includes $3.0 million for the Illinois AgriFIRST program, which will expand agribusiness, marketing opportunities and value- added ventures. Fiscal year 2002 marks the third year of the Illinois FIRST infrastructure initiative. The budget funds a $2.3 billion road program to enable the Department of Transportation to build and repair roads and bridges statewide. The capital program also includes $96.0 million for public transportation projects. The capital budget also provides an additional $50 million in appropriations for the Abraham Lincoln Presidential Library and Museum in Springfield, which will serve as an advance against future federal contributions. New appropriations totaling $126 million will fund the rehabilitation and preservation of existing state facilities, ranging from mental health centers and prisons to parks, historic sites and office buildings. FEDERAL AID Illinois citizens are benefiting from ongoing efforts to obtain additional federal resources. In fiscal year 2000, federal funding to Illinois increased to more than $63.0 billion, an increase from $54.4 billion in fiscal year 1998. Grants to state agencies increased to FY 2002 Budget Summary Page 21 more than $9.8 billion in fiscal year 2001, an 18 percent increase from the $8.3 billion total in fiscal year 1999. Major accomplishments at the federal level that are benefiting the people of Illinois include the continuation of the Medicaid intergovernmental transfer agreement, the authorization and funding for Illinois Rivers 2020, funding for the reconstruction of the Stevenson Expressway and Wacker Drive in Chicago, and full funding agreements for the state's major mass transit systems including Metra, Pace and the Chicago Transit Authority in Cook County and the Metrolink in the Metro East area. Additional highlights from the 106th Congress that benefit Illinois include: • Child Care Block Grant -Illinois received a total of $192 million, including $74.3 million in discretionary funds, an increase of $39 million. • Low Income Home Energy Assistance -Illinois will receive $79.1 million, an increase of $17 million. In addition, Illinois has received $52.8 million in emergency funds. • Abraham Lincoln Presidential Library and Museum -Congress has authorized $50 million in federal funds for the presidential library complex in Springfield. • Ethanol Pilot Plant -Illinois has been allocated $14 million in fiscal year 2001 for an ethanol pilot plant at Southern Illinois University - Edwardsville through the Agriculture Risk Management Act of 2000. • Class Size Reduction -Illinois received $67.8 million, an increase of $13.5 million from fiscal year 2000, to hire new teachers. • Individuals with Disabilities Education Act -Illinois will receive $281 million, an increase of $58 million from fiscal year 2000, to pay 15 percent of the average per pupil expenditure for students with disabilities. • Chicago Shoreline -The Army Corps of Engineers received $19.2 million to provide storm damage protection for the Lake Michigan shoreline. FINANCIAL HIGHLIGHTS The recommended level of appropriations from all funds in fiscal year 2002 is $51,755 billion. Appropriations are made from individual funds, the names of which are indicative of either the purpose of the appropriation or the major source of the funds' receipts. For accounting purposes and convenience, these funds are assigned to various fund groupings. The following table shows appropriations by major fund group. FY 2002 Budget Summary Page 22 Appropriations By Fund Group Fiscal Year 2002 ($ millions) Appropriation Level Percent of Total General Funds . 23,363 45.1 Special State Funds 1 0,26 1 19.9 Highway Funds 6,173 11.9 Federal Trust Funds 4,913 9.5 General Obligation Bond Funds 5,066 9.8 All Other Funds 1,979 3.8 Total 51,755 100.0 The largest fund group, in terms of dollars, is the general funds. This fund group represents 45 percent of total recommended appropriations and consists of the General Revenue Fund, the Common School Fund, the Education Assistance Fund and the General Revenue-Common School Special Account Fund. The general funds support the largest proportion and most varied group of state programs. In addition to providing the majority of education, health and welfare funding, the general funds also support the executive, legislative and judicial branches of state government. The general funds are commonly known as the state's operating funds. Within the special state fund group are all of the appropriated funds associated with the Build Illinois program, including the Build Illinois Bond Fund and the Build Illinois Bond Retirement and Interest Fund. These funds are shown here because they are direct, limited obligation debt instruments, in contrast to the state's general obligation bonds, which are accorded the full faith and credit of the state pledge. Also included within this fund group is the State Lottery Fund. It is projected that about 34 percent of lottery proceeds will be transferred into the Common School Fund for elementary and secondary education. This group also includes the provider funds. There are nearly 310 more funds in this fund group, supporting such diverse activities as medical assistance, children's services, environmental cleanup, financial regulation and health insurance. The highway funds include the State Construction Account Fund, the Road Fund, the Grade Crossing Protection Fund and the Motor Fuel Tax funds. The majority of these receipts come from motor vehicle registration fees, driver's license fees, motor fuel taxes and federal reimbursements for highway and highway-related activities. The highway funds appropriations support transportation-related activities and constitute a mechanism for returning a portion of road-related fees to local governments. The federal trust funds support a variety of state programs. Nearly 60 percent of the federal money is for educational and employment-related programs. Federal support is also given for the elderly, persons with a mental illness, child health, community development, transportation, energy and other health and human services programs. FY 2002 Budget Summary Page 23 Appropriations also may be grouped according to purpose. The following charts show appropriations by major purpose, identifying the principal spending activities of state government. The charts show that the major portions of the state's resources are allocated to education and public assistance and social service programs. Fiscal Year 2002 Appropriations by Major Purpose Percent of Total All Funds Total - $51,755 Billion General Funds - $23,363 Billion / " '■"%• \ All Other 16% / \ / Transportation 1 6% "^^-^i^jt \ / Education — yL. 26% Health and Human i Services 16% / Pubnc Aid \ %\y is% v. y ^^Environment Public ^ s ^. Protection/ ^^^ and Natural Resources 5% Justice 6% Publid Protection/ Julstice7% More than one-fourth of the state's total budget, $13.3 billion, is dedicated for educational purposes. The recommended appropriations for medical assistance, income support, child and community care programs and other health and social services total over $16.1 billion. Within the all other category are lottery prizes, economic development programs, the state's health and life insurance programs and the budgets of elected officials. The all fund appropriations total exceeds total revenues due to reappropriations, appropriations that lapse and appropriation authority necessary to move certain moneys between funds within the State Treasury. The following two charts identify the major revenue sources for all appropriated funds and the general funds. FY 2002 Budget Summary Page 24 Fiscal Year 2002 Revenues by Source Percent of Total All Appropriated Funds - S39.500 Billion General Funds - $25,000 Billion Road Taxes and Fees 7% Lottery 2% Lottery 2% Total state revenues are projected to be $39.5 billion in fiscal year 2002, and general funds receipts are estimated at $25.0 billion. As agreed to by the budget negotiators, consisting of the four legislative caucuses and the Governor's Office, General funds revenues are estimated to increase $894 million from fiscal year 2001. Revenues from the income and sales taxes are the major source of state funds, accounting for 42 percent of all receipts and 64 percent of general funds receipts. The major components of the all other sources category in all appropriated funds are the bond sale receipts, utility taxes, group insurance, intergovernmental payments, cigarette taxes, and riverboat gaming taxes and fees. The following table summarizes the state's general funds financial plan. The fiscal year 02 plan assumes an ending balance of $1.0 billion and includes lapse period spending of $850 million. The Fiscal Year 2002 Budget Plan ($ millions) FY01 FY02 $ Change Beginning Balance 1,517 1,126 (391) Revenues 24,106 25,000 894 Expenditures 24,497 25,126 629 Ending Balance 1,126 1,000 (126) Available Cash 24,497 25,126 629 Prior Year Lapse Period Spending 740 800 60 Transfers Out 2,217 2,285 (68) Current Year Lapse Period Spending 800 850 50 Permanent Lapse 364 457 93 Refunded Warrants 15 15 Appropriations after Supplementals 22,719 23,363 644 Budgetary Balance 326 150 (176) FY 2002 Budget Summary Page 25 CAPITAL PROJECTS AND PROGRAMS The fiscal year 2002 capital budget reflects the state's goal to maintain and upgrade existing facilities and infrastructure. The budget includes the third year of the $12 billion, five-year Illinois FIRST initiative, which is designed to build, repair and upgrade the state's infrastructure. The primary objectives of the program are to maintain and improve the highway and mass transit systems, construct and repair schools, clean-up environmental hazards and upgrade water and sewer systems. Additionally, the fiscal year 2002 budget includes a $554 million enhancement to the Build Illinois program to expand the state's commitment to the infrastructure needs of higher education and research, economic development and the health of Illinois children. The capital budget includes nearly $145 million in Tobacco Settlement Recovery funds to support the VentureTECH program, which will facilitate the construction necessary for technology research and development. The fiscal year 2002 budget also includes construction funds for new buildings at public universities and other state-operated facilities. Fiscal year 2002 capital appropriations include the following: • The Build Illinois program includes $250 million to implement a new construction program to benefit the state's 47 community colleges. The Environmental Protection Agency will be redirecting $75 million of Build Illinois reappropriations to construct centralized wastewater systems for unsewered communities where public health or water quality problems exist. The budget also provides $20 million in funding for Chicago's Field Museum, expanding research and education capacities through a Collection Research Center. An appropriation of $9 million will create the Children's Comprehensive Diabetes Care Center at the University of Chicago Children's Hospital to assist in providing the most sophisticated medical treatment available for children with diabetes. The fiscal year 2002 budget provides $25 million in appropriations to extend the Prime Sites Program, which develops sites to attract businesses to Illinois. J Q Appropriations totaling more than $2.3 billion will fund new and ongoing road projects. The Illinois FIRST program will allow the state to maintain the existing system, modernize older infrastructure, add new lanes to mitigate congestion and build new roads to support economic development. Appropriations totaling $242 million will continue to help local communities fund wastewater treatment facilities and meet federal requirements. New state funding of $12 million will be provided to match $60 million of federal funds to support the Water Pollution Control Revolving Loan program. Appropriations totaling $95 million will be used to help local communities fund projects to meet federal safe drinking water requirements. New state funding of $7 million will be provided to match $35 million in federal funds to support the Drinking Water Revolving Loan program. FY 2002 Budget Summary Page 26 • • • • Public transportation will receive grants totaling $96 million, including $76 million for the Regional Transportation Authority, $5 million for downstate transit systems and $15 million for Operation Green Light. The capital budget provides $740 million in new bond proceed appropriations for construction projects at elementary and secondary schools. Funds for capital projects at the state's higher education institutions total $248 million, including $30 million to maintain and rehabilitate existing structures and academic buildings. The higher education budget also includes $40 million for the Fine Arts Center at Eastern Illinois University; $32 million to complete the $40 million state match necessary for the Siebel Computer Science Building at the University of Illinois at Urbana-Champaign; $15 million for a classroom and office building at the University of Illinois at Springfield; and $16 million for renovation of the library building at Chicago State University. New appropriations of $50 million serve as an advance for federal funding of the Abraham Lincoln Presidential Library and Museum in Springfield, in addition to the fiscal year 2001 state contribution of $50 million. The fiscal year 2002 budget also appropriates $47 million to construct a new office building for the Illinois State Police, enabling them to consolidate personnel from the State Armory and several other Springfield locations. Existing state facilities, ranging from mental health centers and prisons, to parks, historic sites and office buildings, will be rehabilitated and preserved with funding from new appropriations totaling $126 million. GOALS, GUIDELINES AND ORGANIZATION Goals of the Capital Budget. The projects recommended in the budget meet the following three goals: allocating scarce capital investment resources in the most efficient manner, balancing the need for capital investment with available resources and selecting prudent and flexible financing mechanisms that distribute the burden of payment among those benefiting from the capital investment. Statewide Capital Guidelines. The following guidelines, listed in order of importance, were used to select projects for inclusion in the fiscal year 2002 capital budget: 1 . Protection of Life and Safety. The most fundamental guideline used in the selection process is to determine if the project is needed to assure a safe environment for citizens, clients and state employees. Examples of projects selected under this guideline include installing fire detection and prevention devices in buildings, rehabilitating unsafe bridges and transit structures and correcting structural deficiencies. 2. Protection of Infrastructure and Assets. The state performs regular maintenance and rehabilitation work on highways, buildings and other state facilities to protect state property, provide safe conditions and minimize future costs. Road and bridge FY 2002 Budget Summary Page 27 rehabilitation, roof replacement, replacement of wastewater treatment systems and dam or levee improvements are projects included in the capital budget. 3. Completion of Ongoing Projects. Each year, funds are provided for the continuation or completion of ongoing construction projects. For example, funds may be allocated to purchase the equipment necessary to open a recently constructed building. 4. Cost Savings. Projects selected under this guideline are funded to improve efficiency and reduce the state's cost of operations. Examples include the installation of insulation, energy-efficient windows and doors and computer-controlled heating, ventilation and cooling systems. In addition to uiese guidelines, several other factors were considered during the selection process: * A project may have an impact od future operating costs. For example, the construction of a prison, veterans' home or highway will require future operating, maintenance and rehabilitation costs. In selecting projects for the fiscal year 2002 capital budget, certain projects that would require an increase in future operating expenditures were excluded. • External factors, including legal, intergovernmental or environmental concerns, can alter project priority. The following charts detail capital projects included in the fiscal year 2002 enacted budget. FY 2002 Budget Summary Page 28 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT DEPARTMENT OF AGRICULTURE Capital Development Fund Statewide: Conservation 2000 program 2,750.0 Illinois State Fairgrounds - DuQuoin: Repair roofs-5 horse bams 300.0 Upgrade utilities-Phase I 700.0 Illinois State Fairgrounds - Springfield: Renovate comfort stations 1,100.0 Renovate grandstand area 1,120.0 Upgrade electrical systems 1,000.0 Build Illinois Fund Illinois State Fairgrounds - DuQuoin: Install shell over show horse arena 2,660.0 Hayes House maintenance and renovations 600.0 Illinois State Fairgrounds - Springfield: Repair/replace roofing systems 800.0 Upgrade storm/sanitary & water systems 851.0 Tobacco Settlement Recovery Fund Illinois State Fairgrounds - Springfield: Upgrade chemistry/seed lab systems 344.0 CAPITAL DEVELOPMENT BOARD Capital Development Fund Executive Mansion - Springfield: Building maintenance 600.0 Statewide: Abate hazardous material 2,050.0 ADA projects 2,000.0 Retrofit/upgrade mechanical refrigeration equipment 650.0 General Assembly renovations 8,500.0 Complete Joliet C.C. renovation 50.0 Tobacco Settlement Recovery Fund Statewide: Repair minor problems & emergencies 1,000.0 Survey for & abate asbestos containing materials 1,000.0 DEPARTMENT OF CENTRAL MANAGEMENT SERVICES Capital Development Fund James R. Thompson Center, Chicago: Rehab HVAC/boilers, Phase II 1 ,400 .0 FY 2002 Budget Summary Page 29 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT Paris State Gm ?ge: Rep lace rooffcsopxove exfceriox Sub wb&a Ne>rth R;%ion&* Office Facility, De* Plainest Rehab cxi ioi and upgracs s atrium Build Illinois 1 fsiad -'•• j ' . • w ' -„ • '■>' -tv - Ming: " ' ' i "~ r AC j item /7?,-. .,v j^j & j ... ^efmbHitm "*% andEdua , -"", Ckteag«t.° Update --at hea. and plumbing Replace poof Tobacco Settlement Fund Illinois Center for Rehabilitation & Education, Chicago: Tuckpoint exterior building DEPARTMENT OF COMMERCE AND COMMUNITY AFFAD2S Capital Development Fund Argonne: True GRID 380.0 A 30.0 JI65.0 305 .0 30j.v/ 1,045.0 2,500.0 Coal Development Fund Coal Program: Statewide - various coal development projects Build Illinois Fund Statewide: Various capital improvement projects Prime Sites Program DEPARTMENT OF CORRECTIONS Capital Development Fund Centralis C&rreitionol Ceniar: Upgrade building automation < r ystem-FY02 Upgrade electrical iPunvHlr' Cm -ectionol Center: Boiler upgr&sie-FY02 Dixon Correctional Center, Plan facility upgrade for health care use Replace doors and locks-FY02 Renovate water tower-FY02 Upgrade water distribution system-FY02 East Moline Correctional Center: Replace windows-FY02 6,000.0 321,900.0 25,000.0 UOO.O 200.0 300.0 1,200.0 1,300.0 2,800.0 2,000.0 605.0 FY 2002 Budget Summary Page 30 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT Graham Correctional Center: Upgrade electrical • 2,000.0 Upgrade building automation system-FY02 200.0 Hill Correctional Center, Galesburg: Rehab showers-FY02 1 , 140.0 Replace doors and locks-FY02 500.0 Illinois River Correctional Center, Canton: Rehab showers-FY02 635.0 Illinois Youth Center, Harrisburg: Construct vocational and medium/confinement 1 0,250.0 Illinois Youth Center, Joliet: Replace roof top unit at administration building 1 95 .0 Illinois Youth Center, St Charles: Rehab water tower-FY02 1 ,300. Upgrade roofing systems-FY02 1 00.0 Illinois Youth Center, Valley View: Rehab water tower-FY02 300.0 Illinois Youth Center, Warrenville: Improve site utilities 345.0 Upgrade roofing systems-FY02 330.0 Joliet Correctional Center: Transfer switch and emergency generator 980.0 Upgrade water distribution system-FY02 980.0 Lincoln Correctional Center, Logan County: Replace copper supply lines-FY02 1,145.0 Logan Correctional Center, Lincoln: Upgrade roofing systems-FY02 260.0 Menard Correctional Center, Chester: Plan and construct replacement of admin bldg. 1 ,000.0 Replace sally port 925.0 Sheridan Correctional Center: Replace doors and locks-FY02 1 ,3 00.0 Upgrade electrical 905.0 Southwestern Correctional Center, E. St. Louis: Replace sewer lines 405.0 Stateville Correctional Center, Joliet: Replace windows in B house 2,500.0 Taylorville Correctional Center: Rehab showers-FY02 845.0 Vienna Correctional Center: Replace doors and locks-FY02 1,000.0 Upgrade HVAC/rehab water lines-6 housing units 1,800.0 Western Illinois Correctional Center, ML Sterling: Rehab showers-FY02 635.0 Build Illinois Fund Hill Correctional Center, Galesburg: Upgrade building automation system-FY02 540.0 FY 2002 Budget Summary Page 31 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOI 1 1 .: in i ii iwiwumi i i J&iiei Correcti&iz&l Centex. Replace v/ater lower 1,200.0 Vandalia Correctional Center: Upgrade water distribution system FY02 600.0 Vienna Correctional Center: Repair water tower FY02 400.0 ENVTRONMENTAI PROTECTION AGENCY Anti-PoOution Bond Fund Statewide: Wastewater teeattiieut program 12,000.0 Drinking water program 7,000.0 Build Illinois Fund Statewide: Deposit into Hazardous Waste Fund 10,000.0 Brownfields Program 2,000.0 BOARD OF HIGHER EDUCATION Capita! Development Fund Statewide: Capital renewal (repair and maintenance) 20,000.0 Chicago State University 322.7 Eastern Illii tis University 515.5 Govczr . ate University '89.7 Totals Sta e rniversity 1 ,02 1 .3 Nor+heasteK-Ti Ob'nots University 383.7 Northern Illinois University 1,159.0 Western Illinois University "?92.2 S »o1 iem Illinois University - Carbondale 1,624.7 Southern Illinois University - Edwardsville 763.1 University of Illinois - Chicago 2,777.3 University of Illinois - Springfield 229. 1 University of Illinois - Urbana/Champaign 4,150.0 Illinois Community College Board 6,07 1 .7 Digitalization projects 4,886.7 CHICAGO STATE UNIVERSITY Library building 16,000.0 Technology improvement and deferred maintenance 3,000.0 CITY COLLEGES of CHICAGO Technology improvement and deferred maintenance 9,000.0 FY 2002 Budget Summary Page 32 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT EASTERN ILLINOIS UNIVERSITY Fine Arts Center renovation and expansion ILLINOIS STATE UNIVERSITY Shroeder Hall ILLINOIS VALLEY COMMUNITY COLLEGE Asbestos projects MATH AND SCIENCE ACADEMY Gymnasium mezzanine level NORTHEASTERN ILLINOIS UNIVERSITY Remodeling & expansion for buildings C, E & F SOUTHERN ILLINOIS UNIVERSITY Planning addition and renovations to Morris Library UNIVERSITY OF LLLINOIS, SPRINGFIELD Classroom office building UNIVERSITY OF ILLINOIS, CHAMPAIGN Siebel Computer Science Building WESTERN ILLINOIS UNIVERSITY Memorial Hall Tobacco Settlement Recovery Fund SOUTHERN ILLINOIS UNIVERSITY Construct cancer center Advanced technical worker training facility UNIVERSITY OF ILLINOIS Chemical sciences building Biotech genomic facility Supercomputing application facility Tech. Transfer incubator facility College of Medicine at Peoria Build Illinois Bond Fund Statewide: Capital renewal (repair and maintenance) Chicago State University Eastern Illinois University Governors State University Illinois State University Northeastern Illinois University Northern Illinois University Western Illinois University Southern Illinois University - Carbondale Southern Illinois University - Edwardsville University of Illinois - Chicago University of Illinois - Springfield University of Illinois - Urbana/Champaign Illinois Community College Board Illinois Community College Board - enhanced construction program 40,003.0 17,500.0 6,000.0 2,000.0 9,064.3 1,918.9 15,000.0 32,000.0 12,000.0 14,500.0 1,100.0 6,400.0 67,500.0 27,000.0 5,000.0 1,500.0 10,000.0 160.4 257.8 94.9 510.7 191.8 579.5 396.1 812.8 381.6 1,388.6 114.6 2,075.4 3,035.8 50,000.0 FY 2002 Budget Summary Page 33 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT HISTORIC PRESERVATION AGENCY Capital Development Fund Abraham Lincoln Presidential Library, Springfield: Construct library and museum 50,000.0 Bishop Hill Historic Site, Henry County: Restore interior and exterior 1,000.0 Lincoln 's New Salem Historic Site, Menard County: Rebab saw and grist mill 750.0 Shawneetown Bank Historic Site, Gallatin County: Rehab exterior 1J&2BM Build Illinois Fund ML Pulaski Courthouse Historic Site, Logan County: Rehab interior and exterior 240.0 Tobacco Settlement Recovery Fund Lincoln Log Cabin State Historic Site: New roads/parking areas/hghting plaza/ped. bridge 400.0 DEPARTMENT OF HUMAN SERVICES Capital Development Fund Alton Mental Health Center: Repair/replace roo£s-FY©2 150,0 Complete forensics center 3,900.0 Plan a treatment and detention facility 4,000.0 Chester Mental Health Center: Renovate medical diagnostic, Phase II 996.0 Replace smoke/heat detectors 395.0 Chicago-Read Mental Health Center, Cook County: Replace/repair roofs 800.0 Fox Developmental Center, Dwight: Plan/Begin Replacement of interior doors/flooring/walls 1,205.0 Howe Developmental Center, Tinley Park: Replace/repair roofs 1 ,300.0 Replace HVAC systems and duct work 500.0 Illinois School for the Deaf, Jacksonville: Repair/replace roofs-FY02 370.0 Renovate high school building 1 ,200.0 Illinois School For The Visually Impaired, Jacksonville: Plan/Begin Renovation of building #18 350.0 Jacksonville Developmental Center: Plan/begin upgrade mech components in power plant 800.0 Kiley Developmental Center: Rehab/replace roofs 300.0 FY 2002 Budget Summary Page 34 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT Mabley Developmental Center: Plan/B egin Renovation of residential buildings 1 ,63 .0 Murray Developmental Center: Plan/begin boiler house renovation 250.0 Shapiro Developmental Center: Replace water main and valve, Phase II 1,900.0 Repair/replace roofs-FY02 4 1 5 .0 Build Illinois Fund Chester Mental Health Center: Complete renovation of kitchen 175.0 Choate Mental Health and Developmental Center: Install courtyard/rec area at Dogwood & Rosebud 200.0 Singer Mental Health Center, Rockford: Repair/replace roofs-FY02 3 1 0.0 Tinley Park Mental Health Center: Upgrade life/safety-Oak Hall & Spruce, Phase II 3 1 0.0 Tobacco Settlement Recovery Fund Statewide: Tuckpoint masonry 515.0 Zeller Mental Health Center, Peoria County: Install energy management system 24 5 .0 JUDICIAL BRANCH Capital Development Fund Second Appellate Court, Elgin: Various miscellaneous improvements 547.0 Tobacco Settlement Recovery Fund Third Appellate Court, Ottawa: Tuckpoint & repair exterior 175.0 Replace roofs over vault and garage 1 6.6 MEDICAL DISTRICT COMMISSION Capital Development Fund Medical Center District, Chicago: Upgrade research center 710.0 Utility improvements 800.0 Land acquisition & site development 4,000.0 FY 2002 Budget Summary Page 35 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT DEPARTMENT OF MILITARY AFFAIRS Capital Development Fund Champaign Armory: Replace mechanical systems 1,196.0 Galva Armory, Henry County: Replace roof and renovate interior and exterior 600.0 Kewanee Armory: Rehab electrical/mechanical systems, restrooms 2,076.0 Renovate kitchen 448.0 Macomb Armory: Upgrade armory mechanical and electrical 978.0 North Riverside Armory: Rehab interior/exterior walls 618.0 Northwest Armory, Chicago: Replace mechanical systems 2,145.0 Rock Falls Armory: Replace mechanical systems/electrical systems 2,63 1 .0 Build Illinois Fund Lawrenceville Armory: Rehab exterior/interior, replace roof 1,1 84.0 Mt Vernon Armory: Replace exterior doors, refinish floor 145 .0 DEPARTMENT OF NATURAL RESOURCES Capital Development Fund Statewide: Conservation 2000 Program 5,250.0 Grants for Museums Improvement Program 10,000.0 Open Land Trust Program 80,000.0 Corps of Engineers - Match for environment & habitat restoration 2,000.0 Lodge & concession maintenance 6,624.0 Beaver Dam State Park: Sewage system replacement 665.0 Castle Rock State Park: Rehab scenic overlook and water system 1,825.0 Dixon Springs State Park: Replace roofing systems 190.0 Eldon Hazlet State Park: Waterline replacement 575.0 Hennepin Canal Parkway State Park: Repair/replace roofing systems 1 15.0 Moraine View State Park: Upgrade water plant 1 80.0 Pere Marquette State Park: Upgrade youth camp sewer system 140.0 Randolph Fish and Wildlife Area: Replace roofing systems 65.0 FY 2002 Budget Summary Page 36 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT Shabbona Lake State Park: Repair/replace roofing systems 155.0 Southern Illinois Mining Office: Rehabilitate facility 150.0 Springfield: Plan and begin new state museum 3,600.0 Starved Rock State Park and Lodge: Upgrade water and sewer system 600.0 William W. Powers Fish and Wildlife Area: Replace sanitary sewer lines and lift station 890.0 Division of Water Resources Flood Control - Federal Ongoing: East St. Louis flood control rehabilitation 250.0 Flood Control - Federal New: East Chicago (Ford Heights) 1 ,000.0 East St. Louis & vicinity flood control 500.0 Flood Control - State Ongoing: Crystal Creek 1,600.0 Granite City area groundwater flood control 300.0 Kyte River (Rochelle) 1 ,750.0 Prairie/Farmers Creek 1,800.0 Small drainage and flood control 100.0 State Facilities Rehabilitation: Crisenberry Dam 2,000.0 Havana facility 150.0 W. B. Stratton Lock & Dam 350.0 State Recreation Facilities: Fox Chain of Lakes sea wall repair 200.0 Fox Chain of Lakes 2,000.0 Build Illinois Fund Castle Rock State Park: Repair/replace roofing systems 90.0 Lake Michigan: Shoreline project 7,000.0 Morrison-Rockwood State Park: Replace roofs 60.0 Statewide: Well capping program 2,000.0 Weldon Springs State Park: Improve campgrounds 350.0 FY 2002 Budget Summary Page 37 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT Tobacco Settlement Recovery Fund Illinois Beach State Park - Lake County: Stabilize shoreline 400.0 Statewide: Maintain lodge/concession program 494.4 Wayne Fitzgerrell State Park - Jefferson County: Stabilize watershed shoreline 675.0 DEPARTMENT OF REVENUE Capital Development Fund Willard Ice Building, Springfield: Complete upgrade of plumbing system 3,000.0 Parking deck structural repairs 1,250.0 Repair interior and HVAC 3,855.0 Tobacco Settlement Recovery Fund Willard Ice Building, Springfield: Complete security system upgrade 200.0 SECRETARY OF STATE Capital Development Fund 5301 W. Lexington Avenue, Chicago: Replace windows 583.0 5401 North Elston, Chicago: Replace windows 584.0 990 1 S. Martin L King Jr. Drive: Replace windows 583.0 Capitol Complex, Springfield: Complete stone restoration Phase II 3,000.0 Power Plant, Springfield: Provide new water service 80.0 Statewide: (went to Leg. Space Needs) Renovate and upgrade various facilities 2,250.0 Build Illinois Fund Capital Complex, Springfield: Upgrade fire alarm systems-FY02 1 60.0 STATE BOARD OF EDUCATION School Construction Fund Statewide: Grants for facility construction 740,000.0 FY 2002 Budget Summary Page 38 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT DEPARTMENT OF STATE POLICE Capital Development Fund Central Administration Buildings, Springfield: Construct central office building 47,000.0 Build Illinois Fund Ullin District 22-Pulaski County. Upgrade HVAC system 250.0 DEPARTMENT OF TRANSPORTATION Transportation Series A Fund Highways: 400,000.0 Transportation Series B Fund Mass Transit: RTA Grants 91,000.0 Downstate Grants 5,000.0 Aeronautics: Statewide Grants 33,586.4 Rail: Statewide Grants 20,000.0 DEPARTMENT OF VETERANS' AFFAIRS Capital Development Fund Quincy Veterans Home: Replace roofing systems 185.0 Build Illinois Fund LaSalle Veterans Home: Plan expansion of facility 1,000.0 Manteno Veterans Home: Construct equipment storage building 2,485.0 Tobacco Settlement Recovery Fund LaSalle Veterans Home: Install wall protection 120.0 Replace lighting 90.0 Upgrade tempered water systems 50.0 Manteno Veterans Home: Install dehumidifiers/humidifiers 515.0 Quincy Veterans Home: Renovate power plant equipment 715.0 FY 2002 Budget Summary Page 39 FISCAL YEAR 2002 CAPITAL PROGRAM ($ THOUSANDS) AGENCY AND PROJECT AMOUNT LOCAL PROJECTS SCHOOL INFRASTRUCTURE FUND TOTAL City of Springfield Bartlett bale fill land acquisition 20,000.0 7,000.0 Build Illinois Fund Illinois FIRST Projects Chicago Field Museum Loyola University Jofrrey Ballet Rush Presbyterian Hospital Beverly Arts Center Blackburn College Metropolitan Family Services Roseland Hospital City of Chicago Mt. Vernon Complex Jewish Federation of Chicago University of Chicago Juvenile Diabetes Center Dominican University Lutheran General Lincoln College Chinese/ American Service League Lawrence County Hospital Millikin University Holocaust Museum Auto Defibrillators Greenville College Deer Creek Flood Control Argonne Nanotech IIT Biomedical Tobacco Settlement Recovery Fund Northwestern University biomedical building Northwestern University nano fabrication & molecular center Argonne Rare Isotope Accelerator 52,150.0 20,000.0 11,000.0 4,000.0 5,000.0 1,500.0 1,500.0 1,000.0 1,500.0 1,200.0 1,300.0 9,000.0 2,000.0 1,000.0 1,000.0 1,000.0 400.0 2,500.0 5,000.0 800.0 1,000.0 1,000.0 2,000.0 1,000.0 10,000.0 2,000.0 2,000.0 FY 2002 Budget Summary Page 40 DEBT MANAGEMENT The state's capital program is financed largely through the issuance of general obligation and Build Illinois bonds. The full faith and credit of the state are pledged for the timely anient of interest and j incipal due or gee ral obli tion bo is Build Rlhwr" — i- ... : revenue bonds sea: ' imarily b) stat ;.Ues tax xv< \ jcs Civ c Center bo>" .-- -- revenue bondo secured statutory General fcto enue Fund transfers into a • h 4 • r : " fund. The chart below illustrate, the history of debt issued by the state and amounts outstanding at the end of each fiscal year. 10,000 Outstanding Indebtedness ($ millions) 4,000 iT^X"-:^:-"-'^ 3,000 -ifc^i^ Genersl ob!igationj$;f -S" 1991 1992 1993 1994 1995 1996 1997 Fisca' 1 Year 1998 1999 2000 spaas --^'; 1000 - 1,165 isiiiii 800 - 860 600 - 400 - es^Mfeaaas 598 603 ihU 200 - 350 1 H 1997 1998 1999 2000 Fiscal Year 2001 2002 Est. □ General Obligation DBuild Illinois | Pursuant to Public Act 91-39, effective June 15, 1999, state general obligation bonds are sold through either the competitive bid or negotiated process. For a negotiated sale, managers are selected through a competitive process for their ability to develop an appropriate financing structure, provide beneficial market analysis, reach investors targeted by the state and reduce the state's cost of borrowing. During fiscal years 2000 and 2001, all general obligation and Build Illinois bond sales were sold through a negotiated process. ILLINOIS FIRST In May 1999, Governor Ryan proposed the $12 billion Illinois FIRST (Fund for Infrastructure, Roads, Schools and Transit) program to deal with the state's infrastructure needs. Legislative authorization for the program is included in Public Acts 91-36, 91-37, 91-38, and 91-39, effective June 15, 1999. The financing for the program consists of approximately $4.3 billion in state bond sales, $1.6 billion in Regional Transit Authority indebtedness, $2.0 billion in "pay-as-you-go" projects, with federal funding and local matches also contributing to the financing. FY 2002 Budget Summary Page 42 Public Act 91-39 included an additional $5.3 billion in authorization for general obligation bonds (including $500 million for refunding), which help finance the state's ongoing capital program and portions of the Illinois FIRST program. The Illinois FIRST portion of the general obligation bond authorization increase was primarily for Transportation A (highways), Transportation B (mass transit), and School Construction bonds. Public Act 91-39 also included an additional V Ci 4 million in autfoc ; n Bnild Illinois bonds to help finance portions of the W T ' 'RoT progr ' ' . I foi the Illinois FIRST program arc expected > be issued o 1 se n years [ti oug] i 2006) to a-eommotlii lie anticipated s. iing new', . MUNICIPAL 3 1DRA1 Fo each bond issue, the state applies foi unicipal bond itings from Sfc ) Poor's, Moody's Investors Service and Fitci- Lie. The rati ig agencies re ...->. ; cunent fiscal condition and financial plan long-term economic and demography characteristics, debt burden measures and other factors relevant to the state's ability to repay its debt. The state's general obligation bonds currently carry an A A rating from Standard & Poor's, an Aa2 rating from Moody's and an AA+ rating from Fitch. Moody's upgraded the state's general obligation bond rating in February 1997 and June 1998. Standard & Poor's upgraded the rating in July 1997, and Fitch upgraded the rating in June 2000. The firms cited the state's strong financial improvement, conservative budget practices and solid and diversified economy. All of the rating agencies emphasize that the state's wealth and economic diversity continue to provide strong backing for its moderate level of debt. Build Illinois bonds are rated AAA by Standard & Poor's, Aa2 by Moody's and AA + by Fitch. GENERAL OBLIGATION BONDS AUTHORIZED BY THE GENERAL ASSEMBLY General obligation bonds of the state may be authorized by a vote of three-fifths of the members of each house of the General Assembly or by a majority of voters in a general election. Under the General Obligation Bond Act, the state issues general obligation bonds for the purposes described below, * Capital Development -to provide construction ftinds for highe education, corrections, conservation, child care facilities, menta 1 and public health facilities, local governments, the Open Land Trust program and other state capital facilities and purposes. • Transportation -to provide funds for the construction or reconstruction of highways, roads and bridges (Transportation A) and for mass transportation, rail facilities and aviation (Transportation B). FY 2002 Budget Summary Page 43 • School Construction -primarily to fund grants to school districts for school improvement projects authorized by the School Construction Law. • Anti-Pollution -to provide money for the construction of municipal sewage treatment plants and solid waste disposal facilities, to make deposits into the Water Revolving Fund and U.S. Environmental Protection Fund, and for the payment of claims submitted to the State and approved for payment under the Leaking Underground Storage Tank Program. « # Coal and Energy Development -to fund research, development and demonstration of coal and alternate energy sources, and to provide financial assistance to electric generating facilities. Refunding -to refinance outstanding bonds that originally were issued with interest rates higher than current market rates. Proceeds from the sale of general obligation bonds, excluding refunding bonds, are deposited into six bond funds according to uses and purposes for which the bonds were sold. These six bond funds are the Capital Development Fund, the Transportation Bond Series A Fund, the Transportation Bond Series B Fund, the School Construction Fund, the Anti-Pollution Fund and the Coal Development Fund. The General Obligation Bond Act requires the Governor to include an appropriation in each state budget sufficient to pay the interest and principal due on bonds from a separate fund in the State Treasury named the General Obligation Bond Retirement and Interest Fund. The General Assembly is required to make annual appropriations from the General Obligation Bond Retirement and Interest Fund for debt service payments. In the event that the General Assembly fails to make such appropriations, the General Obligation Bond Act includes an irrevocable and continuing appropriation of all amounts necessary to make debt service payments. The General Obligation Bond Act currently authorizes the state to issue $15,265.0 million of multiple purpose general obligation bonds for projects. The act also authorizes the state to have $2,839.0 million of refunding bonds outstanding. The following table shows current authorization by category, proposed commitment levels and the current administration's proposal for new authorization. FY 2002 Budget Summary Page 44 Bond Type Capital Facilities Transportation Series A Series B School Construction Anti-Pollution Coal Development Total Refunding General Obligation Multipurpose Bonds Authorization Summary ($ millions) Prior Authorization New Authorization Increase in Public Act 92-13 Current Authorization 6,078.8 547.2 6,626.1 3,431.0 1,881.3 2,220.0 423.3 163.2 1.1 0.0 0.0 19.0 500.0 3,432.1 1,881.3 2,220.0 442.3 663.2 14,197.6 1,067.4 15,265.0 2,839.0 0.0 2,839.0 Indebtedness. As of June 30, 2001, the State of Illinois has issued $12,851.3 million of bonds for projects, including $4,430.0 million in bonds issued pursuant to old bond acts, and has issued an additional $2,385.0 million of bonds for refundings as authorized by the General Obligation Bond Act. The amount of general obligation debt outstanding as of June 30, 2001, is $6,600.0 million. The amount of general obligation bonds retired as of June 30, 2001, is $8,636.3 million. The following table lists the level of outstanding general obligation debt since fiscal year 1997. FY97 Actual General Obligation Debt Outstanding^ ($ millions) FY98 Actual FY99 Actual FY00 Actual 5,095.4 5,268.8 5,456.3 5,885.8 ^Debt outstanding measured at the end of each fiscal year. FY01 Actual 6,600.0 FY02 Estimated 7,630.7 Debt service on state general obligation bonds is paid from the General Obligation Bond Retirement and Interest Fund. This fund receives transfers from the Road Fund to pay debt service on bonds issued for Transportation A purposes (highways); from the School Infrastructure Fund and General Revenue Fund to pay debt service on bonds issued for School Construction Law purposes; and from the General Revenue Fund to pay debt service on bonds issued for all other purposes. Debt service on the state's outstanding general obligation bonds is expected to total $791 million for fiscal year 2001 and $875 million for fiscal year 2002. The following chart FY 2002 Budget Summary Page 45 illustrates the portions of debt service supported by the Road Fund, School Infrastructure Fund and General Revenue Fund. 1000 900 -- 800 -■ 700 600 + 500 400 -- 300 -- 200 -- 100 General Obligation Debt Service General Revenue, School Infrastructure Fund and Road Fund Portions ($ millions) 49 80 — 1 — 198 197 21 180 199 — 1 — 192 7 1 187 IIIIOIIIWII illlillliillllilllliilill iiiniimiiiiniiminiii * • 543. . •'■• ■ ' ■ ' - 494. ■ ; •t' '•5i6-C:> ■ ■ ' y . - 583 4t ' FY 97 FY97 Actual 419.1 FY98 FY99 FY00 FYOl 427.3 423.0 430.5 FY02 Est. DGRF mSIF DRoad FYOl Actual General Obligation Debt Retired ($ millions) FY98 FY99 FY00 Actual Actual Actual FY02 Estimated 453.9 468.9 Debt Burden Measures. The financial community considers the amount of the state's outstanding debt to be moderate. Debt as a percentage of personal income, debt service as a percentage of expenditures and debt per capita are commonly used measures of debt burden. FY 2002 Budget Summary Page 46 General Obligation Debt as a Percent of Personal Income 2.0% T 1.5% T 1.0% + 0.5% f 0.0% 1.54% 1.50% 1.47% 1.52% 1.62% l.S0% FY97 FY98 FY99 FYOO FY01 FY02Esl General Obligation Debt Service as a Percent of General Funds and Road Fund Expenditures 3.24% .22% 2.99% 2.88% .98% FY 97 FY98 FY99 FY 00 FY01 Est. FY02 Proj. General Obligation Debt Per Capita FY97 Actual S424 FY98 Actual S437 FY99 Actual S450 FY00 Actual $474 FY01 Actual $528 FY02 Estimated $607 FY 2002 Budget Summary Page 47 BUILD ILLINOIS The Build Illinois program, initiated in 1985, expands state efforts in economic development by funding initiatives in business development, infrastructure construction and replacement, education and environmental protection. The program is funded primarily by bonds. Originally authorized at $948 million in bonds and $380 million from current tax revenues, the Build Illinois authorization has been adjusted several times to the current authorization level of $2,852 million in bonds. The Build Illinois bonds are dedicated state tax revenue bonds. Fiscal year 2002 will be the seventeenth year of Build Illinois. Public Act 91-39, effective June 15, 1999, increased authorization by $754 million. Proceeds issued under this increase in authorization will be used over seven years, through fiscal year 2006, to fund local infrastructure projects as part of the Illinois FIRST program. Public Act 92-9, effective June 11, 2001, increased authorization by $688.7 million to the current bond authorization level of $3,540.7 million. Bond sales are scheduled to meet anticipated expenditure needs. Build Illinois bonds are rated AAA by Standard and Poor's, Aa2 by Moody's Investors Service and AA+ by Fitch, Inc. The primary source of funding for current expenditures and debt service on the bonds is the 3.8 percent portion of sales taxes deposited into the Build Illinois Fund. Excess receipts from state taxes pledged to pay debt service on bonds issued for McCormick Place also are available for the Build Illinois program as a supplemental coverage. Since January 1, 1990, monthly transfers from the State and Local Sales Tax Reform Fund have provided additional revenues for debt service on Build Illinois bonds. Authorization. Build Illinois debt may be issued in accordance with authorized amounts as approved by a three-fifths vote of the General Assembly. Current authorization and the administration's proposal for new authorization for Build Illinois bonds (other than refunding bonds) are shown in the following table. Build Illinois Authorization ($ millions) New Authorization Prior Increase in Current Authorization Public Act 92-9 Authorization n 1 2,029.9 370.1 2,400.0 114.3 25.0 139.3 559.1 292.2 851.3 148.7 1.5 150.2 Infrastructure and Transportation Business Development Education Environmental Protection Total 2,852.0 688.7 3,540.7 'All bond sale expenses and discounts are attributed to the infrastructure category. FY 2002 Budget Summary Page 48 Since the inception of the Build Illinois program, 29 series of bonds have been issued. Of those bonds, $2,237 million has been issued to fund projects and $1,065.1 million has been issued to refund outstanding bonds. As of June 30, 2001, $1,690.4 million of Build Illinois bonds remain outstanding. REFUNDING Since 1986, the state has issued 12 series of refunding bonds to reduce general obligation debt service payments. Proceeds from the refunding issues are used to exercise the state's call options on high-interest bonds. A call option is an option to redeem bonds prior to maturity in the manner described in the bond documents. In effect, the state issues low- interest bonds to retire high-interest bonds prior to maturity, which reduces its debt service costs. The following table summarizes present-value savings and nominal savings achieved from general obligation refundings that have been issued since 1986. The nominal savings column compares the debt service obligations of the state prior to a refunding with debt service after a refunding is completed. Savings may occur over a long period of time. By using a discount factor, nominal savings amounts can be shown in present- value terms, the value at the time the refunding bonds were issued. Savings from Refunding General Obligation Bonds ($ millions) Issue Series of April 1986 Series of April 1987 Series of August 1989 Series of March 1992 Series of August 1992 College Savings Bonds, Series of October 1992 Series of June 1993 Series of January 1994 Series of December 1995 Series of February 1997 Series of April 1998 Series of March 1999 Series of April 2001 Total 198.0 155.3 Since February 1987, the state has issued six series of Build Illinois refunding bonds to reduce debt service costs. The table below summarizes the savings achieved from the first five series of refunding bonds. Total Present Nominal Value Savings Savings 18.0 10.1 27.1 16.0 4.2 6.0 21.4 21.1 6.5 6.3 8.3 6.5 14.4 12.8 33.7 27.9 38.3 25.1 4.7 3.8 7.7 5.9 9.3 9.3 4.4 4.5 FY 2002 Budget Summary Page 49 Total Present Nominal Value Savings Savings 14.2 6.5 11.3 5.8 28.3 14.0 22.9 14.2 17.3 10.9 11.1 9.0 Savings from Refunding Build Illinois Bonds ($ millions) Issue Series C, February 1987 Series O, November 1991 Series Q, September 1992 Series S, September 1993 Series Y, December 1997 Series of March 2001 Total 105.1 60.4 GENERAL FUNDS OUTLOOK General funds revenues account for about 63 percent of total state revenues. The Common School Fund, the Education Assistance Fund, the General Revenue Fund and the General Revenue- Common School Special Account Fund make up the state's general funds. Sales and income taxes are the largest single components. Other major sources include public utility, cigarette, liquor, inheritance, insurance, lottery, riverboat gaming, corporate franchise taxes and intergovernmental payments. Additionally, interest income earned on state cash balances, federal aid and transfers from non-general funds contribute to the state's general funds. General fund revenues for fiscal year 2001 totaled $24,106 million. Fiscal year 2002 general fund revenues are estimated to increase $894 million to total $25,000 million. INCOME TAXES Beginning July 31, 1969, an Illinois income tax was imposed on income earned or received in Illinois. Effective July 1, 1989, the income tax rates were increased temporarily. The individual income tax rate was increased from 2.5 percent to 3.0 percent, and the corporate income tax rate was increased from 4.0 percent to 4.8 percent. Public Act 87-17, effective July 1991, extended these income tax rates until June 30, 1993, and made one-half of the rate increase permanent. The remaining half of the increase in income tax rates was made permanent in July 1993 by Public Act 88-89. The starting point for the Illinois individual income tax is federally-adjusted gross income (AGI). The Illinois return then adds income not taxed at the federal level (for example, "tax-exempt" bonds) to arrive at a total income figure. Income not taxed by the state but included in AGI, such as social security and qualified retirement pensions, are deducted to determine a base income figure. The base income is then reduced by the number of FY 2002 Budget Summary Page 50 federally claimed exemptions and any additional exemptions to arrive at a taxable income figure. Prior to the 1998 tax year, each individual income tax filer could deduct $1,000 for each personal exemption claimed from adjusted gross income. Since tax year 1990, individuals who are blind and/or over 65 years of age can claim an additional personal exemption when filing their Illinois individual income tax. Public Act 90-613 phases in a doubling of the deduction for personal exemptions over a three-year period. The deduction increased from $1,000 to $1,300 for tax year 1998, and to $1,650 for tax year 1999 before reaching $2,000 in tax year 2000. The additional exemption for individuals who are blind and/or over 65 years of age remains at $1,000. Tax relief due to the increased value of the personal exemption is estimated to be in the range of $326 million per year on an ongoing basis beginning in fiscal year 2001. Five percent of real property taxes paid by individuals on their principal residence can be taken as a credit against personal income taxes. For tax year 1998, this credit reduced tax liabilities by $287.9 million. An income tax credit equal to 25 percent of qualified education expenses exceeding $250 per year of a full-time pupil enrolled in a kindergarten through 12 education program was enacted by Public Act 91-9. The tax credit cannot exceed $500 per household in any one year and is expected to reduce individual income tax liability by $50 million to $75 million annually beginning in fiscal year 2001. Public Act 91- 700, effective May 11, 2000, created an Illinois Earned Income Tax Credit for taxable years 2000, 2001 and 2002. The credit is equal to five percent of the federal earned income tax credit taken on the federal income tax return but may not reduce the taxpayer's liability below zero nor be carried forward to a subsequent tax year. It is anticipated that a total of $35 million to $50 million in additional tax relief a year will be provided to between 525,000 and 765,000 Illinois tax filers beginning in fiscal year 2001. Throughout the year, taxes are remitted based upon estimated income, the current tax rate and the number of exemptions claimed. To accommodate overpayment of taxes, a portion of the taxes collected are allocated to the Income Tax Refund Fund. As part of tax relief legislation, Public Act 90-613 set the refund rates in statute at 7.1 percent for individual income taxes and 19.0 percent for corporate income taxes for fiscal years 1999 through 2001. After fiscal year 2001, refund allocations will be determined by formula, the numerator being the prior year refunds paid or approved for payment minus the amounts transferred to the Refund Fund from the Tobacco Settlement Recovery Fund and the denominator being the prior year tax collections, except that in fiscal year 2002, the annual percentage shall in no event exceed 7.6 percent of individual income tax collections and 23.0 percent of corporate income tax collections. After allocations to the refund fund, general funds receipts from individual income taxes were $7,996 million in fiscal year 2001 and are estimated at $8,350 million in fiscal year 2002. FY 2002 Budget Summary Page 5 1 Individual Income Taxes ($ millions) FY98 FY99 FYOO FY01 FY02 6,847 7,226 7,686 7,996 8,350 The starting point for the Illinois corporate income tax is federal taxable income. After additions, such as Illinois income and replacement taxes deducted in deriving federal taxable income, and subtractions, such as contributions to certain job training projects, a base income is determined. The base income is then apportioned by formula to calculate Illinois' share of the corporation's income. After subtracting a base exemption of $1,000, which is prorated, a net income figure is determined against which a tax rate of 4.8 percent is applied to determine tax liability. Prior to Public Act 90-613, the base income was apportioned based upon a four-factor formula. Public Act 90-613 changed the formula to one based solely on sales in Illinois. The change was phased in over a three- year period beginning in fiscal year 1999 and is estimated to provide annual tax relief of $63 million in fiscal year 2001 and beyond. Corporate income tax receipts into the general funds were $1,036 million in fiscal year 2001 and are estimated at $1,055 million in fiscal year 2002. Corporate Income Taxes ($ millions) FY98 FY99 FYOO FY01 FY02 1,136 1,121 1,237 1,036 1,055 SALES TAXES In Illinois, a sales tax is imposed on the purchase price of tangible personal property for use or consumption. Effective January 1,1990, the Sales Tax Reform Act (Public Act 85-1135) established a uniform state and local sales tax base with a single rate of 6.25 percent. Under this sales tax system, the state, municipal, county and county supplemental taxes were combined into a single tax. The state continues to receive only that portion (5.0 percent) associated with the "old" state sales tax rate, while the remaining 1.25 percent tax is distributed to local governments. Not all purchasers are subject to the sales tax nor are all purchases. Exempt organizations include state, local and federal governments along with not-for-profit organizations that are exclusively charitable, religious or educational and certain licensed day care centers. Exempt purchases include food, drugs and medical appliances, traded- in property, faml chemicals and machinery, manufacturing machinery and equipment, FY 2002 Budget Summary Page 52 building materials for remodeling or construction of real estate in an enterprise zone, jet fuel and petroleum products purchased by High Impact Service Facilities, rolling stock and various other products. It is estimated that these exemptions have narrowed the sales tax base by roughly 31 percent. In addition, the state's portion of the sales tax on gasoline was suspended during the first half of fiscal year 2001. The suspension is estimated to have provided $150 million in tax relief. "Without the suspension, sales tax growth in fiscal years 2001 was 1.3 percent and is estimated at 4.8 percent in fiscal year 2002. Given the suspension, sales tax revenues are projected to grow by $442 million, or 7.4 percent, in fiscal year 2002. FY98 5,274 Sales Taxes ($ millions) FY99 FY00 FY01 5,609 6,027 5,958 FY02 6,400 PUBLIC UTILITY TAXES Public utility tax revenues consist of taxes on electricity, natural gas and telecommunications. Since January 1, 1986, the tax for natural gas has been the lesser of five percent of gross receipts or 2.4 cents per therm. Effective January 1, 1998, Public Act 90-548 amended the Telecommunications Excise Tax Act by raising the tax on all telecommunications billed to Illinois consumers from five to seven percent of gross receipts. Since February 1, 1998, one-half of the additional revenue received from this new tax is deposited into the School Infrastructure Fund and one-half is deposited into the Common School Fund. Public Act 90-561, effective August 1, 1998, shifted the tax on electricity to a per kilowatt-hour tax on end-user usage, with the marginal tax rate declining as usage increases during the month. Non-residential customers may opt to be "self-assessing" purchasers and pay at the rate of 5.1 percent of the purchase price of the electricity that is used or consumed in a month. Municipal systems and electric cooperatives are taxed at the lesser of 5.0 percent of purchase price or 0.32 cents per kilowatt hour. Public Utility Taxes ($ millions) FY98 912 FY99 1,019 FY00 1,116 FY01 1,146 FY02 1,200 FY 2002 Budget Summary Page 53 CIGARETTE TAX Effective December 4, 1997, Public Act 90-548, in part, amended the Cigarette Tax and the Cigarette Use Tax Acts by increasing the cigarette tax from 2.2 to 2.9 cents per cigarette, or from 44 cents to 58 cents per pack of 20 cigarettes. Beginning in January 1998, deposits into the general funds increased from $25.0 million per month to $33.3 million per month as a result of the law change. The Metropolitan Fair and Exposition Authority Reconstruction Fund continues to receive $4.8 million annually. Following the passage of Public Act 90-587, effective July 1,1998, all remaining revenues are deposited in the Long Term Care Provider Fund. FY98 346 FY99 403 Cigarette Tax ($ millions) FY00 400 FY01 400 FY02 400 LIQUOR TAXES The state imposes a tax on businesses who make or distribute alcoholic beverages within Illinois. The tax was first enacted in 1934 with the rates based on gallonage and alcohol content. Until passage of the Illinois FIRST program as contained in Public Act 91-38, effective June 15, 1999, there had been no changes in the tax rates for 30 years. Public Act 91-38 increased the taxes on alcoholic beverages to the rates shown in the following table: Item Old Tax Rate New Tax Rate Beer Alcohol <=14% Alcohol >14% but <20% Alcohol >=20% 7C per gallon 23 C per gallon 60C per gallon $2.00 per gallon 18.5C per gallon 73 £ per gallon 73 C per gallon $4.50 per gallon The overall volume of liquor sales has not declined since the tax changes. The drop in liquor tax receipts in fiscal year 2001 is principally due to a portion of the taxes being deposited into the state's Protest Fund due to a challenge as to the legality of the new tax rates. FY98 57 Liquor Tax ($ millions) FY99 FY00 FY01 57 128 124 FY02 130 FY 2002 Budget Summary Page 54 INHERITANCE TAX On December 1, 1982, Public Act 82-1021 eliminated the state inheritance tax. The state collects an estate "pick-up" tax equal to the maximum state tax credit allowed against the estate's federal estate tax liability. An estate's tax bill does not change, but a portion of the money is paid to Illinois instead of the federal government. The Comptroller reports the state's portion of estate taxes as the inheritance tax. Inheritance Tax ($ millions) FY98 FY99 FY0O FY01 FY02 250 347 348 361 395 INSURANCE TAX The insurance privilege tax previously constituted more than 80 percent of the total insurance taxes and fees receipted into the general funds. The privilege tax was levied at two percent and was paid by out-of-state insurance companies on premiums written in Illinois, less offsets permitted for payments specified by statute. On October 23, 1997, the Illinois Supreme Court ruled that the state's privilege tax violated the uniformity clause of the Illinois Constitution by requiring out-of-state insurance companies to pay a tax from which domestic companies were exempt. As a result of the court's decision, fiscal year 1998 insurance tax revenues dropped to $91 million. Public Act 90-583 addressed the constitutional problems by replacing the privilege tax with a new premium tax, which is levied at the same rate on all foreign and domestic insurance companies. In addition, retaliatory taxes are imposed on foreign (non-Illinois) companies whose state imposes taxes or fees on Illinois companies in excess of Illinois taxes and fees charged to companies from the host state. Insurance Tax ($ millions) FY98 FY99 FYOO FY01 FY02 91 208 209 246 250 CORPORATE FRANCHISE TAXES AND FEES In order to do business in Illinois, corporations must pay franchise taxes and license fees. There is an initial tax of 0.15 percent of paid-ill capital when beginning business in the state, an additional tax of 0.15 percent of any increase in paid-in capital during the year, and an annual tax of 0.10 percent of paid-ill capital. In addition to the fee of filing an FY 2002 Budget Summary Page 55 annual report, fees are levied for filing articles of incorporation, amendment, merger or consolidation and dissolution. Corporate Franchise Tax ($ millions) FY98 FY99 FYOO FY01 FY02 118 117 138 146 150 INVESTMENT INCOME Income is earned on the cash balances of various state funds from the following kinds of investments: repurchase agreements, commercial paper, time deposits and certificates of deposit. Interest income is apportioned between the funds based upon each fund' s pro ration of the total balance of all invested funds, or by specific statutory direction. The general funds receive the largest share of investment income. Investment Income ($ millions) FY98 FY99 FYOO FY01 FY02 182 212 233 274 275 OTHER STATE SOURCES Other state sources are composed of miscellaneous taxes and fees, intergovernmental payments and transfers from the Build Illinois escrow account. Of the estimated $94 million increase in fiscal year 2002, $75 million will come from the Build Illinois escrow account. • Other State Sources ($ millions) FY98 FY99 FYOO FY01 FY02 371 446 478 686 780 FEDERAL AID Receipts to the general funds from the federal government consist of grants and reimbursements for public aid, social services and other programs. The amount of federal receipts will vary in any given fiscal year dependent upon the level of state spending, federal matching rates and the amount of block grant funds awarded. FY 2002 Budget Summary Page 56 Medical Assistance Social Services Block Grant Temporary Assistance to Needy Families Child Care Block Grant All Other Federal Aid Total Federal Aid ($ millions) FY98 FY99 FY00 FY01 FY02 2,438 2,689 2,800 3,231 3,185 52 102 119 115 86 471 443 382 435 463 86 135 236 163 92 277 349 354 376 354 3,324 3,718 3,891 4,320 4,180 TRANSFERS-IN Funds, including lottery and riverboat gaming tax receipts, are transferred into the general funds from non-general funds, according to statute. Gaming Fund transfers area expected to grow by $5 million, or 1.1 percent, in fiscal year 2002. Both Other Transfers- In, which is comprised of 20 or so funds, and the Lottery Fund are projected to grow by 1.8 percent. Transfers-In ($ millions) FY98 FY99 FY00 FY01 FY02 Lottery 560 540 515 501 510 Riverboat Gaming 170 240 330 460 465 Other Transfers-In 346 411 514 452 460 IEFC/BUREAU OF THE BUDGET FY 02 REVENUE COMPARISON The following table provides a detailed comparison between the Bureau of the Budget and the Illinois Economic & Fiscal Commission estimates of FY 2002 general funds revenues. As shown, the Commission's estimate is $174 million less than the BoB forecast. The BoB is considerably more optimistic in their forecasts of income taxes and slightly more optimistic in their estimate for sales tax. Absent those items, the other smaller sources are quite similar in dollar magnitude. FY 2002 Budget Summary Page 57 IEFC-BoB COMPARISON-FY 2002 ($ in millions) BoB Jul-01 IEFC Jul-01 Revenue Sources FY 2002 FY 2002 Difference State Taxes Personal Income Tax $9,037 $8,955 ($82) Corporate Income Tax $1,370 $1,318 ($52) Sales Taxes $6,400 $6,378 ($22) Public Utility (regular) $1,200 $1,180 ($20) Cigarette Tax $400 $400 $0 Liquor Gallonage Taxes $130 $135 $5 Vehicle Use Tax $35 $35 $0 Inheritance Tax (gross) $395 $376 ($19) Insurance Taxes & Fees $250 $260 $10 Corporate Franchise Tax & Fees $150 $151 $1 Interest on State Funds & Investments $275 $265 ($10) Cook County Intergovernmental $245 $245 $0 Transfer Other Sources $500 $20,387 $497 $20,195 ($3) ($192) Subtotal Transfers Lottery $510 $505 ($5) Gaming Fund Transfer $465 $465 $0 Other $460 $21,822 $465 $21,630 $5 ($192) Total State Sources Federal Sources $4,180 $4,180 $0 Total Federal & State Sources $26,002 $25,810 ($192) Nongeneral Funds Distribution: Refund Fund Personal Income Tax ($687) ($681) $6 Corporate Income Tax ($315) ($303) $12 Total General Funds $25,000 $24,826 ($174) Change from Prior Year Estimate $894 $720 Percent Change 3.7% 3.0% FY 2002 Budget Summary Page 58 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr LEGISLATIVE AGENCIES GENERAL REVENUE OTHER STATE FUNDS General Assembly General Revenue Other State Funds Auditor General General Revenue. ....... Other State Funds Economic and Fiscal Commission General Revenue Commission on Intergovernmental Cooperation General Revenue Legislative .Information System . General Revenue Other State Funds. Legislative Audit Commission General Revenue Legislative Printing Unit General Revenue Legislative Research Unit General Revenue Legislative Reference Bureau General Revenue Gen. Assembly Retirement System. General Revenue Other State Funds Space Needs Commission General Revenue Other State Funds Joint Committee on Administrative Rules General Revenue Pension Laws Commission General Revenue 79,713.8 93,732.7 86,917.1 98,270.5 66,046.3 79,523.8 71,876.8 80,529.3 13,667.5 14,208.9 15,040.2 17,741.2 41,263.0 53,430.5 45,430.5 51,838.8 41,137.6 53,298.9 45,298.9 51,702.6 125.4 131.6 131.6 136.2 17,360.7 17,340.8 18,152.1 18,339.5 5,098.6 5,353.5 5,353.5 5,540.9 12,262.1 11,987.3 12,798.6 12,798.6 741.2 1,159.7 187.2 2,128.3 1,814.6 2,446.8 1,008.2 339.4 778.3 1,217.7 196.5 2,234.8 1,905.4 2,569.1 1,059.0 356.4 778.3 1,217.7 196.5 2,234.8 1,905.4 2,569.1 1,059.0 356.4 874.0 1,260.3 6,914.4 7,920.1 7,920.1 9,283.7 6,114.4 6,320.1 6,320.1 7,683.7 800.0 1,600.0 1,600.0 1,600.0 227.0 2,313.0 2,058.3 2,659.0 3,951.0 4,305.0 4,678.0 4,678.0 3,471.0 3,815.0 4,168.0 4,168.0 480.0 490.0 510.0 510.0 419.3 3,273.9 399.3 419.3 419.3 577.5 0.0 0.0 0.0 2,696.4 1,096.1 368.9 FY 2002 Budget Summary Page 59 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr JUDICIAL AGENCIES GENERAL REVENUE OTHER STATE FUNDS FEDERAL FUNDS Courts General Revenue Other State Funds Judges' Retirement System. . General Revenue -. Other State Funds Judicial Inquiry Board General Revenue State Appellate Defender . . General Revenue Other State Funds Federal Funds State's Attorneys Appellate Prosecutor General Revenue Other State Funds Federal Funds ELECTED OFFICIALS GENERAL REVENUE OTHER STATE FUNDS FEDERAL FUNDS CONTINUING APPROPRIATIONS. Governor General Revenue Other State Funds Lieutenant Governor . . . . General Revenue Other State Funds Attorney General General Revenue Other State Funds Federal Funds Secretary of State General Revenue Other State Funds Federal Funds 321,785.8 345,665.2 360,371.4 367,6373 303,677.9 325,442.6 339,245.4 346,511.4 14,797.8 16,782.7 18,001.0 18,001.0 3,310.0 3,440.0 3,125.0 3,125.0 276,631.9 294,922.8 305,288.7 307,788.7 268,211.9 286,166.0 296,181.8 298,681.8 8,420.0 8,756.8 9,106.9 9,106.9 21,388.0 24,218.0 27,532.0 27,532.0 19,228.0 22,048.0 25,232.0 25,232.0 2,160.0 2,170.0 2,300.0 2,300.0 600.0 630.0 652.1 652.1 12,916.2 14,875.2 15,445.1 20,145.1 11,356.2 12,124.0 12,548.3 17,248.3 1,050.0 . 2,111.2 2,571.8 2,571.8 510.0 640.0 325.0 325.0 10,249.7 11,019.3 11,453.5 11,519.5 4,281.9 4,474.6 4,631.2 4,697.2 3,167.8 3,744.7 4,022.3 4,022.3 2,800.0 2,800.0 2,800.0 2,800.0 1,248,917.3 1,504,575.9 1,458,504.2 1,461,288.6 295,770.0 310,027.4 323,702.4 325,237.5 940,266.4 1,038,379.7 1,121,648.2 1,122,897.4 11,880.9 14,404.4 13,153.7 13,153.7 1,000.0 141,764.4 0.0 0.0 10,426.9 10,736.5 10,949.2 11,109.1 10,326.9 10,636.5 10,849.2 11,009.1 1 00.0 100.0 100.0 100.0 3,276.5 3,191.5 3,191.5 3,297.6 3,031.5 3,031.5 3,031.5 3,137.6 245.0 160.0 160.0 160.0 58,949.6 67,242.6 66,728.5 66,828.6 39,220.1 41,281.1 42,725.9 42,826.0 16,729.5 20,454.1 19,602.6 19,602.6 3,000.0 5,507.4 4,400.0 4,400.0 339,484.1 376,640.8 369,982.8 372,500.4 174,162.2 183,607.8 191,483.1 192,851.5 156,691.6 184,402.7 170,026.9 171,176.1 8,630.3 8,630.3 8,472.8 8,472.8 FY 2002 Budget Summary Page 60 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr Comptroller General Revenue Other State Funds Federal Funds State Treasurer General Revenue Other State Funds Continuing Appropriations". DEPARTMENTS GENERAL REVENUE OTHER STATE FUNDS FEDERAL FUNDS Aging General Revenue Other State Funds Federal Funds Agriculture General Revenue. ..... Other State Funds Federal Funds Central Management Services. General Revenue Other State Funds Children and Family Services General Revenue Other State Funds Federal Funds Commerce & Community Affairs General Revenue Other State Funds Federal Funds Corrections General Revenue Other State Funds Employment Security General Revenue Other State Funds Federal Funds Financial Institutions Other State Funds 52,611.3 55,717.0 57,818.9 57,719.6 50,213.6 52,501.5 55,979.8 55,780.4 2,147.1 2,948.8 1,558.2 1,658.3 250.6 266.7 280.9 280.9 784,168.9 991,047.5 949,833.3 949,833.3 18,815.7 18,969.0 19,632.9 19,632.9 764,353.2 830,314.1 930,200.4 930,200.4 1,000.0 141,764.4 0.0 0.0 27,657,230.9 30,925398.2 31,352,884.9 32,879,026.4 12,385,750.4 13,285,059.1 13,528,046.2 13,449,547.1 12,955,227.5 15,103,558.7 15,162,169.8 16,779,235.5 2,316,253.0 2,536,780.4 2,662,669.0 2,650,243.9 270,391.5 295,788.0 296,721.3 297,773.2 217,791.7 235,519.2 234,860.5 235,912.4 0.0 1,850.0 1,050.0 1,050.0 52,599.8 58,418.8 60,810.8 60,810.8 125,141.6 134,515.8 140,865.1 143,415.3 67,323.6 74,850.6 76,355.8 78,906.0 50,519.7 52,034.6 54,879.7 54,879.7 7,298.3 7,630.6 9,629.6 9,629.6 2,177,094.6 2,339,616.3 2,574,207.0 2,588,707.0 672,023.5 726,024.9 761,524.9 759,824.9 1,505,071.1 1,613,591.4 1,812,682.1 1,828,882.1 1,403,017.3 1,412,037.3 1,418,572.1 1,418,446.9 925,255.6 927,420.7 927,220.7 925,465.6 466,529.8 466,077.3 470,668.8 472,298.7 11,231.9 18,539.3 20,682.6 20,682.6 1,359,641.0 1,894,069.2 1,359,558.1 2,136,872.6 89,454.4 102,917.9 108,961.1 115,120.1 890,491.3 1,333,811.4 786,466.3 1,557,621.8 379,695.3 457,339.9 464,130.7 464,130.7 1,244,435.4 1,349,076.9 1,463,582.0 1,448,703.5 1,125,677.5 1,213,718.3 1,318,098.3 1,303,219.8 118,757.9 135,358.6 145,483.7 145,483.7 562,260.2 575,042.3 592,366.5 592,071.8 8,926.4 8,926.4 8,926.4 8,926.4 88,517.6 2,017.6 2,017.6 2,017.6 464,816.2 564,098.3 581,422.5 581,127.8 8,696.1 9,571.1 10,198.1 10,198.1 FY 2002 Budget Summary Page 61 TABLE I Appropriations by Agency (Fiscal Years - S thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr Human Rights General Revenue. . . , Federal Funds . . . . , Human Services .... General Revenue. . . . Other State Funds. . . Federal Funds Insurance General Revenue. . . . Other State Funds. . . Federal Funds Labor General Revenue . . . . Other State Funds. . . Lottery Other State Funds. . . Military Affairs . . . . General Revenue . . . . Other State Funds. . . Federal Funds Natural Resources. . . . General Revenue. . . . Other State Funds. . . Federal Funds Nuclear Safety General Revenue. . . . Other State Funds. . . Federal Funds Professional Regulation. General Revenue. . . . Other State Funds. . . Public Aid General Revenue. . . . Other State Funds. . . Public Health* General Revenue. . . . Other State Funds. . . Federal Funds 9,150.4 9,337.4 9,808.4 9,808.4 7,021.3 7,106.0 7,454.3 7,454.3 2,129.1 2,231.4 2,354.1 2,354.1 4,466,571.9 4,793,281.7 4,920,693.6 5,003,682.7 3,455,631.2 3,722,335.2 3,787,068.7 3,802,542.0 227,524.4 281,199.8 294,690.8 364,040.8 783,416.4 789,746.7 838,934.1 837,099.9 27,046.0 31,434.6 33,637.6 33,637.6 455.8 478.6 492.6 492.6 25,990.2 30,256.0 32,445.0 32,445.0 600.0 700.0 700.0 700.0 6,575.9 6,964.6 7,135.9 7,354.4 6,330.5 6,705.5 6,981.7 7,200.2 245.4 259.1 154.2 154.2 364,480.7 357,342.2 357,342.2 357,342.2 28,957.2 30,991.4 31,795.6 31,911.2 12,926.1 14,102.1 14,775.7 14,775.7 1,653.3 1,773.9 1,893.4 2,009.0 14,377.8 15,115.4 15,126.5 15,126.5 629,590.4 699,754.5 657,149.2 765,887.1 161,775.1 164,619.2 143,033.1 157,712.8 433,886.6 506,168.6 486,250.8 581,196.4 33,928.7 28,966.8 27,865.3 26,978.0 31,620.6 32,468.0 31,187.7 31,187.7 556.7 762.9 786.0 786.0 30,663.9 31,305.1 30,001.7 30,001.7 400.0 400.0 400.0 400.0 23,899.8 25,209.6 30,368.8 30,468.8 1,603.4 1,685.8 1,712.5 1,712.5 22,296.4 23,523.8 28,656.3 28,756.3 7,156,774.2 7,735,039.7 7,796,284.400 8,017,287.9 4,913,048.0 5,329,001.1 5,374,001.100 5,264,676.3 2,243,726.2 2,406,038.6 2,422,283.300 2,752,611.6 229,103.4 265,088.3 287,022.8 322,805.4 109,333.5 121,124.1 122,056.2 124,865.3 35,191.3 59,280.7 78,332.5 111,256.0 84,578.6 84,683.5 86,634.1 86,684.1 FY 2002 Budget Summary Page 62 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr Revenue General Revenue Other State Funds State Police General Revenue Other State Funds Federal Funds. . . Transportation General Revenue Other State Funds Federal Funds Veterans' Affairs General Revenue Other State Funds Federal Funds OTHER AGENCIES GENERAL REVENUE OTHER STATE FUNDS FEDERAL FUNDS CONTINUING APPROPRIATIONS. . . Illinois Arts Council General Revenue Other State Funds Federal Funds Office of Banks and Real Estate Other State Funds Bureau of the Budget General Revenue Other State Funds Continuing Appropriations . . . Capital Development Board. . . . General Revenue Other State Funds Civil Service Commission General Revenue Illinois Commerce Commission . . General Revenue Other State Funds 774,291.1 1,144,994.2 977,764.4 979,464.4 248,346.1 250,805.1 250,374.4 250,374.4 525,945.0 894,189.1 727,390.0 729,090.0 362,650.9 373,295.9 385,131.7 385,751.6 224,693.8 239,330.9 249,056.7 249,056.7 119,750.3 115,758.2 117,868.2 118,488.1 18,206.8 18,206.8 18,206.8 18,206.8 6,326,718.0 7,336,581.5 7,890,271.0 8,185,027.1 99,778.1 98,647.5 93,060.3 99,278.0 5,764,527.4 6,747,828.9 7,262,126.6 7,560,123.9 462,412.4 490,105.1 535,084.1 525,625.2 69,122.9 73,897.8 81,221.5 81,221.5 37,798.2 38,977.2 41,245.1 41,245.1 30,762.9 34,322.8 39,288.6 39,288.6 561.8 597.8 687.8 687.8 4,472,576.9 5,173,355.8 5,492,027.2 5,740,8233 285,398.6 288,590.9 290,443.1 282,146.6 3,886,442.2 4,400,883.9 4,893,971.7 5,150,097.2 300,260.6 301,157.0 307,612.500 308379.6 475.6 182,724.0 0.0 0.0 22,652.9 20,456.5 20,257.9 20,626.5 17,577.9 19,541.7 19,607.9 19,976.5 4,375.0 264.8 0.0 0.0 700.0 650.0 650.0 650.0 27,063.8 419.9 29,446.5 435.8 33,218.5 452.4 33,218.5 247,444.3 440,375.0 269,748.0 269,748.0 3,081.7 3,226.0 3,323.0 3,323.0 243;887.0 254,425.0 266,425.0 266,425.0 475.6 182,724.0 0.0 0.0 2,482,232.4 2,919,094.8 3,257,520.9 3,429,269.8 69,565.7 53,037.2 47,219.0 40,385.0 2,412,666.7 2,866,057.6 3,210,301.9 3,388,884.8 452.4 38,495.1 40,988.9 47,610.7 47,815.7 1,042.8 1,684.0 1,667.2 1,667.2 37,452.3 39,304.9 45,943.5 46,148.5 FY 2002 Budget Summary Page 63 TABLE I Appropriations by Agency (Fiscal Years - S thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr Illinois Comprehensive Health Insurance Plan Board General Revenue Court of Claims General Funds Other State Funds Federal Funds Drycleaner Environmental Response Trust Fund Council Other State Funds East St. Louis Financial Advisory Authority General Revenue s Environmental Protection Agency . . . General Revenue Other State Funds Federal Funds Environmental Protection Trust Fund Commission Other State Funds Guardianship & Advocacy Commission . General Revenue Other State Funds Historic Preservation Agency .... General Revenue Other State Funds Human Rights Commission General Revenue Illinois Criminal Justice Information Authority . . General Revenue Other State Funds Federal Funds Illinois Deaf and Hard of Hearing Commission General Revenue 17,324.3 3,000.0 304.3 986,213.1 29,940.2 909,967.0 46,305.9 2,500.0 2,083.1 27,324.3 5,543.5 298.9 1,026,442.3 30,478.7 949,447.9 46,515.7 2,995.0 1,639.1 42,000.0 4,103.8 313.9 1,137,840.7 30,470.1 1,058,340.1 49,030.5 2,995.0 1,630 J 32,000.0 49,479.6 45,192.4 38,206.5 48,178.4 40,856.9 39,122.5 35,202.7 41,898.7 6,786.9 5,008.7 2,878.8 5,435.5 1,835.8 1,061.1 125.0 844.2 5,983.8 313.9 1,206,175.3 30,220.1 1,126,986.8 48,968.4 2,995.0 7,795.7 8,345.6 8,906.7 9,166.7 7,615.7 8,145.6 8,696.7 8,956.7 180.0 200.0 210.0 210.0 27,048.2 24,655.5 19,705.2 23,788.1 16,301.8 17,543.7 16,539.6 17,669.9 10,746.4 7,111.8 3,165.6 6,118.2 1,630.5 20,882.7 121,262.0 134,942.6 134,942.6 6,213.6 6,369.6 6,302.6 6,302.6 19,779.3 20,002.6 28,901.1 28,901.1 94,889.8 94,889.8 99,738.9 99,738.9 511.1 685.0 726.6 726.6 FY 2002 Budget Summary Page 64 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 FY2O01 Actual Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr Illinois Educational Labor Relations Board General Revenue Illinois Emergency Management Agency General Revenue Other State Funds Federal Funds Illinois Farm Development Authority General Revenue Illinois Health Care Cost Containment Council General Revenue Other State Funds Illinois Labor Relations Board General Revenue Illinois Medical District Commission General Revenue Other State Funds Illinois Council on Developmental Disabilities Federal Funds Illinois Rural Bond Bank Authority General Revenue Illinois Sports Facilities Authority Other State Funds Illinois Violence Prevention Authority General Revenue Other State Funds Industrial Commission General Revenue 1,618.9 3,921.2 1,946.4 4,110.8 264.5 18,000.0 1,699.8 5,440.0 2,186.6 4,093.1 270.0 18,000.0 1,814.9 1,250.0 2,358.8 4,120.8 283.5 32,179.0 1,8149 169,406.1 170,155.4 170,282.2 170,592.2 15,315.9 15,469.1 15,595.9 15,595.9 1,857.9 925.0 925.0 925.0 152,232.3 153,761.3 153,761.3 154,071.3 1,250.0 1,378.3 1,416.5 1,839.0 1,839.0 1,193.3 1,211.5 1,601.8 1,601.8 185.0 205.0 237.2 237.2 2,358.8 6,195.6 7,317.9 5,482.2 6,183.9 907.7 1,153.1 1,182.2 1,182.2 5,287.9 6,164.8 4,300.0 5,001.7 4,120.8 283.5 32,179.0 16,850.0 17,858.0 19,504.8 19,504.8 14,900.0 15,900.0 17,523.4 17,523.4 1,950.0 1,958.0 1,981.4 1,981.4 10,565.1 11,448.8 1 1,400.7 11,494.1 FY 2002 Budget Summary Page 65 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 FY2001 Actual Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr Law Enforcement Training Standards Board Other State Funds Liquor Control Commission. . . General Revenue Other State Funds Metropolitan Pier and Exposition Authority- Other State Funds Pollution Control Board. . . . General Revenue Other State Funds Prairie State 2000 Authority General Revenue Prisoner Review Board General Revenue Property Tax Appeal Board General Revenue Illinois Racing Board Other State Funds Sex Offender Management Board Other State Funds Southwestern .Illinois Development Authority General Revenue State Board of Elections General Revenue State Employees' Retirement System General Revenue Other State Funds Continuing Appropriations . . Office of State Fire Marshal . General Revenue Other State Funds Federal Funds 12,581.5 12,654.6 13,761.3 13,761.3 4,983.3 6,863.0 6,696.1 6,696.1 0.0 400.0 350.0 350.0 4,983.3 6,463.0 6,346.1 6,346.1 1,378.0 1 16,390.0 120,426.0 120,426.0 2,344.4 2,421.9 2,641.7 2,641.7 870.4 885.6 938.5 938.5 1,474.0 1,536.3 1,703.2 1,703.2 6,485.8 6,960.7 6,999.4 6,918.5 1,292.9 1401.7 1,623.3 1,623.3 2,940.9 2,909.7 3,022.4 3,022.4 1,550.3 28,287.6 28,301.4 28,301.4 0.0 25.0 30.0 30.0 1,308.5 1,697.6 1,696.2 1,696.2 7,865.5 8,961.1 7,640.2 7,640.2 12,844.4 10,619.0 10,418.7 10,418.7 124.4 129.0 128.7 128.7 12,720.0 10,490.0 10,290.0 10,290.0 0.0 0.0 0.0 26,255.7 18,162.3 17,193.7 18,113.7 0.0 0.0 0.0 320.0 26,069.7 17,976.3 17,007.7 17,607.7 186.0 186.0 186.0 186.0 FY 2002 Budget Summary Page 66 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr State Police Merit Board General Revenue Upper River Valley Development Authority General Revenue ELEMENTARY AND SECONDARY EDUCATION 7 GENERAL FUNDS OTHER STATE FUNDS FEDERAL FUNDS HIGHER EDUCATION* GENERAL FUNDS OTHER STATE FUNDS FEDERAL FUNDS Board of Higher Education. . . . General Funds Other State Funds Federal Funds Chicago State University .... General Funds Other State Funds Eastern Illinois University. . . General Funds Other State Funds Governors State University . . . General Funds Other State Funds ....... Northeastern Illinois University General Funds Other State Funds Western Illinois University. . . General Funds Other State Funds Illinois State University. . . . General Funds Other State Funds Northern Illinois University . . General Funds Other State Funds 842.7 195.5 834.5 0.0 881.0 0.0 881.0 0.0 7,126,752.4 7,659,479.0 8,031,531.900 7,983,279.5 5,578,303.3 5,919,291.9 6,222,291.900 6,210,970.9 210397.2 250,146.5 159,788.000 149328.0 1,338,051.9 1,490,040.6 1,649,452.0 1,622,980.6 2,844,302.8 3,003^13.9 3,186,007.936 3424371.7 2,378,859.1 2,511,002.2 2,668,002.200 2,667,675.6 363,790.0 167,765.8 208,869.936 241,860.3 101,653.7 324,545.9 309,135.800 314,835.8 344,332.8 356,387.5 24,610.0 396,745.3 318,399.8 328,907.5 0.0 350,835.3 22,923.0 14,170.0 11,000.0 32,300.0 3,010.0 13,310.0 13,610.0 13,610.0 39,760.4 41,405.8 0.0 44,027.4 38,246.0 40,933.7 0.0 44,027.4 1,514.4 472.1 0.0 0.0 48,443.7 56,537.6 6,439.5 61,089.8 47,629.2 50,908.7 0.0 54,818.3 814.4 5,628.9 6,439.5 6,271.5 25,219.9 26,749.6 0.0 28,045.9 24,854.5 26,384.2 0.0 28,045.9 365.4 365.4 0.0 0.0 43,820.2 44,000.6 420.0 45,862.3 40,330.4 42,610.1 0.0 45,396.8 3,489.8 1,390.5 420.0 465.5 59,010.2 62,256.9 648.8 65,611.3 58,151.9 61,407.4 0.0 65,047.8 858.3 849.5 648.8 563.5 83,485.0 87,954.4 190.5 93,588.2 82,971.2 87,761.8 0.0 93,384.7 513.8 192.6 190.5 203.5 107,557.5 112,719.6 857.7 118,867.9 106,361.1 111,612.7 0.0 118,176.2 1,196.4 1,106.9 857.7 691.7 FY 2002 Budget Summary Page 67 TABLE I Appropriations by Agency (Fiscal Years - $ thousands) FY2000 Actual FY2001 Actual w/Supp FY2002 Recommended FY2002 Passed GA/rr Southern Illinois University . . General Funds Other State Funds University of Illinois General Funds Other State Funds Illinois Community College Board General Funds Other State Funds Federal Funds Student Assistance Commission. . General Funds Other State Funds. ....... Federal Funds Mathematics & Science Academy. . General Funds Other State Funds Universities Civil Service Merit Board General Funds GRAND TOTAL GENERAL FUNDS OTHER STATE FUNDS FEDERAL FUNDS CONTINUING APPROPRIATIONS. . . 227,990.1 241,795.6 1,628.9 256,905.7 219,063.0 232,950.0 0.0 249,933.1 8,927.1 8,845.6 1,628.9 6,972.6 796,700.4 844,646.3 116,791.9 928,986.3 712,541.9 754,440.7 0.0 803,624.7 84,158.5 90,205.6 116,791.9 125,361.6 382,573.1 409,626.0 63,287.6 433,690.5 328,927.0 347,433.6 0.0 372,665.2 32,452.4 38,998.7 39,287.6 60,025.3 21,193.7 23,193.7 24,000.0 1,000.0 669,030.0 701,408.7 301,280.8 730,933.1 385,563.5 408,636.5 0.0 423,752.3 206,016.5 4,730.0 6,755.0 6,955.0 77,450.0 288,042.2 294,525.8 300,225.8 15,076.9 16,452.7 2,050.0 18,576.7 14,516.9 15,642.7 0.0 16,526.7 560.0 810.0 2,050.0 2,050.0 1,302.6 43,751,279.8 21,293,805.6 18,384,588.6 4,071,410.0 1,475.6 1,372.6 48,705,520.8 22,718,937.8 20,991,726.2 4,670^683 324,488.5 0.0 49,968,244.6 23,443,607.9 21,579,488.7 4,945,148.0 0.0 1,441.2 51,754,697.5 23362,618.4 23,479,160.5 4,912,918.5 0.0 FY 2002 Budget Summary Page 68 TABLE II General Funds Revenues by Source (Fiscal Years - $ millions) Estimated Sources of Revenue 1999 2000 2001 2002 Income Taxes Individual Corporate Sales Taxes Public Utility Taxes Cigarette Taxes Liquor Gallonage Taxes Inheritance Tax Insurance Tax and Fees Corporate Franchise Taxes and Fees Interest on State Funds and Investments Intergovernmental Transfer (IGT) Other Tax Sources Transfers -In: Lottery Riverboat Gaming Taxes Other Transfers 8,348 8,923 9,032 9,430 7,226 7,686 7,996 8,350 1,122 1,237 1,036 1,055 5,609 6,027 5,958 6,400 1,019 1,116 1,146 1,200 403 400 400 400 57 128 124 130 347 348 361 395 208 209 246 250 117 138 146 150 212 233 274 275 218 245 245 245 227 233 441 535 540 515 501 510 240 330 460 465 411 514 452 460 Total, state Sources 17,956 19359 19,786 20,820 Federal Aid 3.718 3.891 4.320 4.180 Total Revenues 21,674 23,250 24,106 25,000 FY 2002 Budget Summary Page 69 STATE OFFICERS' SALARIES GENERAL ASSEMBLY, OFFICERS AND MEMBERS, TOTAL Salaries, 118 Members, House of Representatives Salaries, 59 Members, The Senate 7 Additional Amounts, as Prescribed by Law for Party Leaders in Both Chambers as follows: Speaker of the House, President of the Senate and Minority Leaders of both Chambers Majority Leader of the House Assistant Majority and Minority Leaders in the Senate (11) Assistant Majority and Minority Leaders in the House (12) Majority and Minority Caucus Chairmen in the Senate Majority and Minority Conference Chairmen in the House Deputy Majority (2) and Deputy Minority (2) Leaders in the House Chairmen and Minority Spokesman of Standing Committees in the Senate except the Rules Committee, the Committee on Committees and the Committee on the Assignment of Bills Chairman and Minority Spokesmen of Standing and Selected Committees in the House- 2 Total, General Assembly Office of the Auditor General: Auditor General Deputy Auditors General (2) DEPARTMENTS: Aging: Director Agriculture: Director Assistant Director FY00 a $ 6,322,558 3,121,740 82,429 98,916 82,429 FY01 $6,581,804 3,290,902 95,000 109,500 93,000 FY02 6,914,300 3,514,800 86,996 18,349 90,564 19,101 93,552 19,731 179,410 186,769 192,929 171,252 178,272 184,152 32,620 33,958 35,078 28,542 29,712 30,692 62,528 65,092 67,240 261,024 271,712 298,214 701,502 $10,986,521 781.172 $11,529,058 894,642 $12,245,330 104,647 194,576 108,938 202,554 112,533 209,238 98,135 113,114 96,069 a On July 1, 1999, salaries and per diems increased two percent pursuant to the recommendations of the Compensation Review Board. The increases only affect compensation when a new term or appointment begins. 'A portion of the members did not receive a two percent base increase in fiscal year 2000, but these members are eligible in fiscal 2001. 2 The 91" House expanded the number of committees from 32 to 43. The 92 nd House expanded the number of committees from 43 to 50. FY 2002 Budget Summary Page 70 Central Management Services: Director Assistant Directors (2) Children and Family Services: Director Commerce and Community Affairs: Director Assistant Director Corrections: Director Assistant Directors (2) Financial Institutions: Director Assistant Director Human Rights: Director Human Services: Secretary Assistant Secretaries (2) Insurance: Director Assistant Director Labor: Director Assistant Director Chief Factory Inspector Superintendent of Safety Inspection and Education Military Affairs: Adjutant General Chief Assistants to the Adjutant General (2) Natural Resources: Director Assistant Director Mine Officers (6) Miners' Examining Officers (4) Nuclear Safety: Director Professional Regulation: Director FYOO 103,037 173,106 104,647 85,728 FY01 117,000 199,000 123,500 95,000 FYQ2 120,861 205,568 127,576 98,916 82,429 117,000 99,500 120,861 102,784 115,533 164,858 123,500 210,000 127,576 216,930 82,429 70,890 95,000 81,000 98,135 83,673 98,135 115,533 181,348 123,500 210,000 127,576 216,930 90,674 74,188 109,500 93,000 113,114 96,069 90,674 74,188 41,215 45,336 102,000 93,000 42,905 47,195 105,366 96,069 44,321 48,752 79,960 141,780 95,000 162,000 98,135 167,346 98,916 82,429 74,178 40,780 109,500 93,000 77,214 42,452 113,114 96,069 79,764 43,852 85,728 95,000 98,135 90,674 102,000 105,366 FY 2002 Budget Summary Page 71 FYOO FYOl FY02 Public Aid: Director Assistant Director Public Health: Director Assistant Director Revenue: Director Assistant Director State Police: Director Assistant Director Transportation: Secretary Assistant Secretary Veterans' Affairs: Director Assistant Director OTHER AGENCIES: Civil Service Commission: Chairperson-' Members (2) 2 Illinois Commerce Commission: Chairperson 5 Members (4) 2 - 4 Court of Claims: Chief Judge Judges (6) Elections, State Board of: Chairperson Vice Chairperson-' Members (6)^ Human Rights Commission: Chairperson Members (12)-^ Illinois Emergency Management Agency: Director " 79,960 95,000 98,135 1 Position(s) did not receive a two percent base increase in fiscal year 2000 but are eligible in fiscal year 2001. 2 A portion of the members is eligible to receive the two percent increases, but the remainder are not eligible in fiscal years 2000. 2001 or 2002. ^Position is not eligible to receive the two percent increases in fiscal year 2000 or 2001 but is eligible in fiscal year 2002. 4 Members were increased to four on 7/9/00. 107,160 90,674 1 17,000 99,500 121,861 102,784 107,160 90,674 123,500 105,000 127,576 108,465 107,160 90,674 117,000 99,500 120,861 102,784 98,916 82,429 109,00 93,000 112,597 96,069 107,160 90,674 123,500 105,000 127,576 108,465 79,960 70,890 95,000 81,000 98,135 83,673 19,013 29,102 25,000 70,296 25,825 72,615 101,748 362,612 105,920 377,478 113,836 389,936 51,272 283,962 53,374 295,602 55,135 305,358 46,162 36,445 173,444 48,055 39,473 185,358 49,641 40,776 191,472 41,215 436,470 42,905 463,368 44,321 478,656 FY 2002 Budget Summary Pa S e 72 FYOO FYOl FY02 Illinois Environmental Protection Agency: Director 98,916 109,500 113,114 Illinois Educational Labor Relations Board: Chairperson Members (4) 1 82,429 290,992 85,809 454,384 88,641 475,577 Illinois Labor Relations Boards: ^ Chairperson State Labor Relations Board Members (4) 2 Local Labor Relations Board Members (2) 82,429 145,496 148,376 85,809 308,920 154,460 88,641 319,116 159,558 Industrial Commission: Chairperson Members (6)-* 98,916 556,911 102,972 591,228 106,370 610,740 Liquor Control Commission: Chairperson^ Members (6) 2 ' 5 Secretary License Appeal Commission (2 members per diem) 22,977 77,592 29,676 6,800 32,000 143,382 30,893 6,800 33,056 156,590 31,912 6,800 Pollution Control Board: Chairperson Members (6)-* 95,605 554,688 99,525 577,428 102,809 596,484 Prisoner Review Board: Chairperson- 3 Members {\4) 2 - 6 72,785 725,149 78,831 977,708 81,432 1,009,968 Property Tax Appeal Board: Chairperson 5 Members (4) 2 49,122 160,060 53,201 168,288 54,957 173,842 State Police Merit Board: Members (5 - per diem)^ 92,600 96,400 99,400 Secretary of State Merit Commission: Chairperson- 3 Members {4J 2 10,340 39,196 14,150 42,040 14,617 43,427 Office of Small Business Utility Advocate: 7 Small Business Utility Advocate 96,238 99,414 State Sanitary District Observer 24,728 25,742 26,591 'Members were increased to six on 7/9/00. In addition, a portion of the members is not eligible to receive the two percent increases. 2 A portion of the members is eligible to receive the two percent increases, but the remainder are not eligible in fiscal years 2000, 2001 or 2002. *Position(s) did not receive the two percent increase in fiscal year 2000 but are eligible in fiscal year 2001. 4 Previous board was abolished and a new board established on 7/9/00. State panel members were increased to four. ^ Members were increased to six on 7/9/00. "Members were increased to 14 on 7/9/00. 'Small Business Utility Advocate reappointed in February 2001. FY 2002 Budget Summary Page 73 FYOO FYOl FY02 APPOINTED STATE OFFICERS, FUNDS OTHER THAN GENERAL REVENUE State Fire Marshal (Fire Prevention Fund) Racing Board (Agricultural Premium Fund): Members (1 1 - per diem)^ Lottery (State Lottery Fund): Director Banks and Real Estate (Bank & Trust Company Fund): Commissioner First Deputy Commissioner^ Deputy Commissioner (I) 2 Employment Security (Title III Social Security and Employment Service Fund): Director Board of Review Members (5) EXECUTIVE BRANCH: Governor Lieutenant Governor Secretary of State Attorney General Treasurer Comptroller TOTAL, ALL STATE OFFICERS' SALARIES 'A portion of the members is eligible to receive the two percent increases, the remainder are not eligible in fiscal years 2000, 2001 or 2002. In addition, members were increased to 11 on 7/9/00. 2 Beginning in fiscal year 2002, the first deputy commissioner will be paid from the Savings and Residential Finance Regulatory Fund and one deputy commissioner will be paid from the Real Estate License Administration Fund. Note : Above fiscal year 2002 data reflects a 3.3 percent cost of living adjustment effective July 1, 2001. 79,960 95,000 98,135 86,742 112,100 115,801 90,674 102,000 105,366 102,545 94,656 173,538 111,908 103,059 180,654 115,601 106,460 186,616 107,160 75,000 117,000 75,000 120,861 75,000 140,132 107,160 123,646 123,646 107,160 107.160 145,877 111,554 128,715 128,715 111,554 111.554 150,691 115,235 132,963 132,963 115,235 115,235 $21,808,590 $24,036,043 $25,182,266 FY 2002 Budget Summary Page 74 TABLE 1 FOOTNOTES 1 Departments of Commerce and Community Affairs and Employment Security - Historical data reflects the functional transfer of the Workforce Investment Act, formerly the Job Training Partnership Act, from the Department of Commerce and Community Affairs to the Department of Employment Security: fiscal year 2000, $323.2 million; and fiscal year 2001, $322.1 million. 2 Department of Financial Institutions/Office of Banks and Real Estate - Department of Financial Institution 's fiscal year 2001 appropriation includes $180 thousand originally appropriated to the Office of Banks and Real Estate, transferred by interagency agreement for the development and operation of the Mortgage Awareness Program. 3 Department of Human Services - Historical data reflects the functional transfer of the Early Intervention Program from the department to the State Board of Education: fiscal year 2000, $57.3 million; and fiscal year 2001, $63. 7 million. 4 Department of Public Aid - Historical data reflects the $370 million transfer of the Special Education Medicaid Matching Fund appropriation from the State Board of Education to the Department of Public Aid in the fiscal year 2002 budget. Also see Footnote #7. ' Department of Public Health - The $3.4 million medical scholarship appropriations for all fiscal years are located within the Board of Higher Education 's budget. 6 Environmental Protection Agency/Drycleaner Environmental Response Trust Fund Council - Historical data has been revised to reflect the creation of the Dry cleaner Environmental Response Trust Fund Council as a separate state agency. ' Elementary and Secondary Education - The all funds appropriations for the teachers' retirement components are as follows: fiscal year 2000, $734.3 million; fiscal year 2001, $832.0 million; and fiscal year 2002, $923.4 million. Also see Footnote #3. Fiscal year 2001 data reflects the transfer of $28,005.3 to the Board of Higher Education for adult education. Fiscal year 2002 funding is included in the Board of Higher Education. Also see Footnotes #3 and #4. * Higher Education - The all funds appropriations for the State Universities Retirement System are included within the data for the Board of Higher Education: fiscal year 2000, $227.2 million; fiscal year 2001, $235.4 million; and fiscal year 2002, $243.4 million. Also see Footnotes #5 and #7. The Governor 's recommended funding level for General Funds is not allocated among higher education entities. FY 2002 Budget Summary Page 75 BACKGROUND The Illinois Economic and Fiscal Commission, a bipartisan, joint legislative commission, provides the General Assembly with information relevant to the Illinois economy, taxes and other sources of revenue and debt obligations of the State. The Commission's specific responsibilities include: 1) Preparation of annual revenue estimates with periodic updates; 2) Analysis of the fiscal impact of revenue bills; 3) Preparation of "State Debt Impact Notes" on legislation which would appropriate bond funds or increase bond authorization; 4) Periodic assessment of capital facility plans; and 5) Annual estimates of the liabilities of the State's group health insurance program and approval of contract renewals promulgated by the Department of Central Management Services. The Commission also has a mandate to report to the General Assembly ". . . on economic trends in relation to long-range planning and budgeting; and to study and make such recommendations as it deems appropriate on local and regional economic and fiscal policies and on federal fiscal policy as it may affect Illinois . . ." This results in several reports on various economic issues throughout the year. The Commission publishes two primary reports. The " Revenue Estimate and Economic Outlook" describes and projects economic conditions and their impact on State revenues. "The Illinois Bond Watcher" examines the State's debt position as well as other issues directly related to conditions in the financial markets. The Commission also periodically publishes special topic reports that have or could have an impact on the economic well being of Illinois. These reports are available from: Illinois Economic and Fiscal Commission 703 Stratton Office Building Springfield, Illinois 62706 (217) 782-5320 (217)782-3513 (FAX) Reports can also be accessed from our WebPage: http://www.legis.state.il.us/commission/ecfisc/ecfisc_home.html Recycled paper - soybean inks • Printed by Authority of the State of Illinois • LPU Order 31665 • September 2001 • 1,500 copies 3 0112 042553435