IPO Logo Home Search Browse About IPO Staff Links

Legislative Action By GARY ADKINS

Appropriations for fiscal 1979 total $11.403 billion after governor's vetoes

ILLINOIS state government is financially stable. Appropriations for fiscal 1979 are $11.403 billion, up $683 million from last year's total budget. State government is healthy enough to withstand this spending increase because of an equally large revenue increase, projected at $718 million more than last year, largely from state sources. By year's end the state expects to have a sound $100 million balance in its general funds. Bond debt is now nearing $2.5 billion, but sales have levelled since the Walker administration, and the state retains its sound triple-A rating with investors.

As usual, the legislature passed some appropriations bills knowing the governor would veto them. But lawmakers went easy on Gov. James R. Thompson by not inflating his agency budgets. Although the General Assembly passed $1.18 billion more than Gov. Thompson recommended, most of this sum was earmarked for pork barrel projects, where vetoes are traditionally expected. Basically, it was a boring off-year session without the usual last night hostage bills. Democrats in control of both houses churned out the budget they wanted on the floor, based on well-researched staff reports, and often ignored the committee system in shaping appropriations matters. Near the close of the six-month budgetary session most of the still stranded agency budgets were combined in several "omnibus" House appropriation bills. It first appeared that Democrats might use the omnibus bills to hold up agency appropriations, but nothing dramatic occurred.

Gov. Thompson approved $11.403 billion in appropriations from all sources, $147 million more than he proposed — and vetoed $969 million. The General Assembly will convene November 14 to act on vetoes.

Most of the governor's approved addons were in other than general funds, largely transportation and building funds for construction. The governor granted the Department of Transportation (DOT) $73 million more in nongeneral funds than he first proposed, and he granted the Capital Development Board (CDB) $74.4 million more non-general funds than first proposed. Part of the $74.4 million is for construction of a new Southern Illinois University Law School and a new physical education facility at Carbondale. Other CDB items are $8.6 million for remodeling existing buildings at Eastern Illinois University, the University of Illinois, Northeastern Illinois University, Illinois State University and Northern Illinois University, as well as construction of a new building at State Community College of East St. Louis.

Part of the increase approved by Gov. Thompson includes reappropriation of money not spent last year, although budgeted. The largest reappropriation is $24 million in anti-pollution bond money for sewage treatment plant construction.

General funds healthy

Only $60.8 million of the excess appropriation passed by the legislature was from the crucial General Revenue and Common School Funds. Of this amount, the governor cut $23.3 million, leaving in $37.5 million more than his original recommendation. But, he expects the state to receive $32 million more in federal revenues than was earlier projected. These federal funds will cover most of these additional expenditures. The anticipated federal revenue is repayment for social service claims made by Illinois prior to 1975 when Title XX was initiated by the feds to reimburse states for services offered to low income individuals and families. The remaining $5.5 million to cover the additional spending will have to be

Table 1
Action on all funds:
Fiscal 1979 Appropriations
(Millions)
Function

Budget
Recommendation

Passed
by General
Assembly

Approved
by
Governor
Elementary &
Secondary Education

$2,302.6

$2,363.7

$2,343.5

Higher Education

959.6

965.5

963.8

Public Aid

2,256.6

2,281.7

2,281.7

Mental Health

427.2

425.2

424.2

Children &
Family Services

120.6

121.8

121.8

Corrections

140.3

139.2

139.2

All Other

5,049.4

6,141.4

5,129.0

Totals

$11,256.3

$12,436.5

$11,403.2

Table 2
Action on Fiscal 1979 Appropriations
from General Revenue and Common School Funds
(Millions)
Function

Budget
Recommendation

Passed
by General
Assembly

Approved
by
Governor
Elementary &
Secondary Education

$1,898.8

$1,940.5

$1,932.3

Higher Education

847.5

847.4

847.4

Public Aid

2,256.6

2,261.7

2,261.7

Mental Health

392.0

390.0

389.0

Children &
Family Services

117.4

118.5

118.5

Corrections

131.9

130.8

130.8

All Other

793.3

809.4

795.3

Totals

$6,437.5

$6,498.3

$6,475.0

September 1978/Illinois Issues/27


taken from agencies' budgets, according to Bureau of the Budget Director Robert L. Mandeville.

With the additional $37.5 million, total approved appropriations for the general fund is $6.475 billion.

The targeted balance for the end of fiscal year 1979 in the all-important general funds is $100 million, up over $14 million from last fiscal year. The governor's budget experts agree that this is a comfortable enough cushion to keep the state from running out of money for day-to-day goods and services. In fact, $100 million is the amount Director Mandeville has said he was aiming for all along. The general funds pay for operation of schools, welfare programs and agency expenses, including most payrolls for state employees.

Gov. Thompson said he would cut $1.13 billion in overspending by the legislature; he vetoed $969 million in appropriations bills and he vetoed three tax relief bills which he claimed would cut state revenues. Thompson estimated savings of $90 million by vetoing H.B. 3279, an expansion of the circuit breaker to all property owners; $53 million by vetoing H.B. 2695 which would allow the standard deduction on state income taxes to rise with inflation, and $16 million by vetoing H.B. 2707, which would have raised the circuit breaker maximum for senior citizens' income from $10,000 to $15,000 and changed the maximum grant to $650.

Elementary & secondary education

The overall increase in state spending for public schools this year will be $136.5 million. Gov. Thompson compromised on his $2.302 billion recommendation for elementary and secondary education appropriations, approving nearly $41 million more ($2.343 million). The bulk of the increase, $33 million, is in general funds for aid to local districts, especially those hard pressed by the revised funding formula this year. Gov. Thompson felt he could approve this increase because of the additional $32 million federal reimbursement for past social services plus $7 million in unexpected savings in the state employee insurance program. But more will still have to come by tightening agency budgets to pay for the extra school spending.

Compared to last year's budget, the largest increase in spending is the $1.359 billion appropriation in H.B. 2635 (80-1282) to finance the new school aid formula in H.B. 2891. It is an increase of $69.4 million over last year's level of payments statewide and will provide state aid up to $917 per pupil. Without the formula changes, schools would have received $27.7 million less than last year. Thus, the effect of the new formula for local school districts is an increase of $97.2 million in state aid, $49.2 million of which goes to the 96 downstate counties (outside Cook and the collar counties of DuPage, Kane, Lake, McHenry and Will). The school aid formula supports most educational programs, including teachers'salaries. Funding for teachers' retirement was increased $19.4 million to provide for the level of payout. Categorical grants total $307.4 million, a $40 million increase in spending for programs such as special education, pupil transportation, vocational education, food, textbooks and bilingual education.

Higher education

Unlike previous years, the least controversial appropriation this session was for higher education. Early in the session the General Assembly passed a Senate package containing most of the governor's recommendations, with only $5.9 million more than requested. Gov. Thompson approved all the add-ons. Thus the total was more than last year, with much of the increase going for pay raises ranging from 8 to 10 per cent for university employees.

Public Aid

Welfare appropriations increased nearly $160 million over last year. A 5 per cent cost-of-living increase is included to allow assistance to recipients — most of whom are children — to keep up with inflation. Higher hospital costs will again account for much of the rise in spending under the medical assistance program. Medical assistance is by far the largest state welfare program, making up over half of this year's $2.282 billion appropriation. Federal payments will total $1,080 million for Department of Public Aid programs.

Corrections

The budget for the Department of Corrections, which last year received the largest percentage increase of any agency, was up again this year. Appropriations for fiscal year 1979 total $139.2 million, a 14.5 per cent boost over last year. The prison population, however, has been growing — up 3 per cent in the past year from 10,300 to 10,600. Such overcrowding is the biggest

Table 3
Fiscal 1979 Appropriations
Bond Funds
(Thousands)
 

General
Recommended

General
Assembly
Passed

Governor
Approved

Anti-Pollution

45,622.2

58,096.1

45,622.2

Capital Development 122,485.5 232,922.0 144,839.3
Coal Development 4,010.0 4,010.0 4,010.0
School Construction 2,036.0 47,536.0 2,036.0

Transportation

Series A_____
156,066.1

433,566.1

163,066.1

Series B_____

37,033.6

37,078.6

37.033.6
Total New 367,253.4 813,208.8 396,607.2

Table 4
Fiscal 1979 Reppropriations
Bond Funds
(Thousands)
 

General
Recommended

General
Assembly
Passed

Governor
Approved
Final Approved
Reappropriations
(After 6/30
Adjustments)

Anti-Pollution

223,600.0

272,219.0

247,952.4

247,952.4
Capital Development 265,000.0 298,995.4 292,161.3 262,289.4
Coal Development 10,000.0 10,000.0 10,000.0 9,993.0
School Construction 127,000.0 153,378.5 150,876.1 133,063.5

Transportation

Series A 193,800.0

247,168.7

184,669.1

184,669.1
Series B:

59,500.0

86,372.3

53,759.0 53,759.0
Total 878,900.0 1068,134.0 939,417.9 891,726.9
Grand Total: Bond Funds
(Tables 3 & 4)
1,246,153.4 1,881,342.8 1,336,025.1 1,288,334.1

28/September 1978/ Illinois Issues


Table 5
Fiscal 1979 School Aid Formula
compared to last year formula distribution

1978-79
Net Payments
1978-79
Without Formula
Changes
1977-78
Under New
Formula

Chicago

$410,549,842 $422,083,309 $431,271,080
Suburban Cook 197,296,896 203,183,602 223,265.628
Collar Counties* 204,810,996 202,577,697 221,366,004
Downstate 477,533,844 434,594,904 483,774,403
State Total 1,290,191,578 1,262,439,512 1,359,677
*DuPage, Kane, Lake Henry, Will counties

contributing factor behind the increased cost of corrections, and prison officials say it was a major factor in the July 22 riot at Pontiac prison. Two thousand prisoners are confined at Pontiac, an institution with a designed capacity of 1,250. Only 1,824 prisoners were held there a year ago.

Illinois' inmate population is expected to continue to increase well into the 1980's because of the longer sentences imposed for Class X crimes (P.A. 80-1099), despite recommendations from reform groups calling for more probation, halfway houses and other alternatatives for all but the most dangerous offenders. It costs the state between $6,000 and $10,000 to keep a prisoner locked up for a year.

Bond funds

Again this year, the state's bonded indebtedness and debt service payment went up. The governor approved $396.6 million in appropriations for new bond-financed programs, after cutting $416.6 million in projects passed by the General Assembly. Gov. Thompson originally recommended $367.2 million, and half of the $29.4 million difference will go for the higher education projects mentioned earlier, plus an $8 million increase for two projects: a new Department of Conservation facility and the agriculture building to be constructed at the state fair grounds.

Bond fund reappropriations came to $891.7 million, very close to the amount planned for continuing construction projects already underway.

In fiscal 1979 the state plans to sell $400 million in bonds, nearly the same amount as in fiscal 1978 ($405 million). Sales have leveled off from the growth rate of the past. Illinois bonds have maintained their AAA credit rating with Standard and Poor's, and Moody Investors Services. This rating is based mainly on two indices, both of which are very favorable in Illinois: the stability of the total state finances, especially general funds, and the ratio of bond debt repayment costs to the total budget.

Lawmakers failed to provide $155 million in added authorization for Capital Development Board projects now underway, including construction of two new medium security prisons in Hillsboro and Centralia. The legislature refused to approve any new authorization when Republicans and Gov. Thompson refused to agree to fund capital improvement for local jails. To assure that prison construction and other projects already started are not delayed, Thompson had to veto $6 million in the budget. There wasn't enough to cover total cost of land and planning of a $5.3 million new state revenue building, so it will be delayed.

Debt service payments for bonded indebtedness should be about $215 million this year, up $28 million from , last year. The percentage of these payments to total state spending will rise slightly. Last year it was 2.6 per cent of spending; this year it is projected to reach 2.8 per cent. Experts say the level is not dangerous until it reaches about 5 per cent. Most of the debt service is paid out of the general revenue fund, and an estimated $148 million will be paid this year out of general funds. Nearly all state bonds have a 25-year repayment schedule with the state paying back 4 per cent of the principal every year, plus interest on the remaining balance.

Transportation

A $2.259 billion appropriation for the Department of Transportation was signed by Gov. Thompson. He said he vetoed $759.2 million, mostly for local projects. But this figure is somewhat misleading because it includes $293.6 million listed as reappropriations which it was not necessary to reappropriate.

September 1978/ Illinois Issues /29


Illinois Periodicals Online (IPO) is a digital imaging project at the Northern Illinois University Libraries funded by the Illinois State Library