Recommendations for Improvement
Amending HJCRA 59 with provisions fromthe Pension Funding & Fairness Act will helpachieve the ultimate goal of a balanced and reli-able state budget.
Strengthen the spending cap.
HJRCA 59 relies on a spending limit tied topersonal income growth. In particular, it limitsspending growth to the average annual per-centage change in average per capita personalincome for Illinois for most recent 5 years, asdened by U.S. Department of Commerce.Had this limit been in place from scal years1997 to 2009, Illinois would have saved acumulative $29.392 billion over actual generalrevenue fund spending. Fiscal year 2009 spend-ing would have totaled $27.335 billion, or $1.8billion less than available revenues. While the per capita income growth index is agood measure, removing government transferpayments and compensation from personalincome calculations can strengthen this limit. This would ensure that government paymentsto individuals don’t drive more governmentspending by upping personal income statistics.Had this measure been in place, the scal year2009 budget would have been $27.323 billion.
Graphic 2. Allowable SpendingGrowth, Average Annual PercentageChange in Average Per CapitaPersonal Income for Illinois for MostRecent 5 Years
Fiscal YearSpending GrowthPercent Increase
Source: Illinois Policy Institute, U.S. Department of Commerce
Another route would be to limit spending tothe combination of the growth in ination plusthe growth in population. Had this measurebeen in place from scal years 1997 to 2009, to-tal savings would have equaled $37.376 billion. The scal year 2009 budget would have been
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Graphic 3. Growth in General Fund Expenditures, Fiscal Years 1997 to 2009
Another route would be to limit spending to the combination of the growth in ination plus the growth in population.Had this measure been in place from scal years 1997 to2009, total savings would have equaled $37.376 billion.