Weekly Report- February 4, 2010
On January 27, 2010, the Governor’s FY 2011 proposed $5.707 billion budget was released. The proposed budget doesn’t fund the previously approved two percent allowable growth for schools; property tax credits are shown below last year’s level; and a proposal to fund the Highway Patrol from the Road Use Tax Fund. If this legislation passes as proposed, it will cause property taxes to increase depending on the condition of the local school budgets to absorb the lack of funding. The proposed budget spends more than anticipated revenues, and uses one-time funding for $387 million. The proposed State Government Reorganization shows $341 million in savings. However, the non-partisan Legislative Services Agency shows only $29 million savings for reorganization at this time. Approximately $140 million of left over federal stimulus is proposed for a portion of Medicaid and education funding.
Another Bill passed by the House last week allows unemployment benefits to the spouse who quits a job because of deployment or relocation of the military spouse. Labor unions have pushed this for sometime.
On February 2, 2010, the House passed SF 2062, establishing a State Employee Retirement Incentive Program for eligible employees of the Executive Branch of the State and makes the Program optional for the Legislative and Judicial Branches, and the Board of Regents institutions. Two incentives provided in the Bill for eligible employees that participate in the Program are: If the employee has at least 10 years of State employment, $1,000 will be paid to the employee for each year of State employment up to 25 years. The amount is to be paid in five equal installments each year during September beginning in 2010. A participant in the Program (or the surviving spouse) will receive a health insurance contribution benefit to pay the premium cost for eligible State group health insurance for five years following termination from State employment. The Bill prohibits early retirement participants under this Program from resuming State employment in any capacity. It is estimated that of the approximately 6,600 IPERS employees that are 55 years or older, 1,000 will participate in this Program for an estimated savings in FY 2010 of $973,000.
The Legislative Services Agency released their monthly report of General Fund Receipts through January 31, 2010. In a year-to-date comparison, FY 2010 total net receipts (excluding transfers) decreased $256.9 million
(-7.5%) compared to FY 2009. Major sources and their contribution to the FY 2010 change include: Personal income tax (negative $70.3 million, -3.9%); Sales/use tax (negative $33.3 million, -2.5%); Corporate tax (negative $42.3 million, -18.3%); Other taxes (negative $31.1 million, -11.4%); Other receipts (negative $25.2 million, -10.3%); Tax refunds not including school infrastructure refunds (negative $17.1 million); School infrastructure sales/use tax refunds (negative $37.6 million).
Please feel free to contact me regarding issues that are or will be before the Legislature. My e-mail address and phone numbers are in the above letterhead.
