State Budget Update

What’s new?

  • The legislature passed a FY2020 State Budget (Senate Bill 262/Senate Bill 689/Senate Bill 1814) which included $40 billion state appropriations with no Medicaid rate cuts. The state budget is partly funded by an MCO tax that helped offset a proposed cut to Medicaid.  Other important budget items:
    • An increase in the hospital assessment tax that had been scheduled to take effect this July 1 to cover increased state costs related to declining ACA federal matching rates has been delayed by one year, saving hospitals $12.5 million.
    • $1.2 billion in bonding is included to help pay down the state’s multi-billion dollar backlog of unpaid bills.
    • No reductions in the prompt pay interest rate.
    • $500,000 is appropriated for the Medical Licensing Division of the Illinois Department of Financial and Professional Regulation to hire additional staff for more timely processing of licenses for physicians and other healthcare professionals.
  • AMITA Health Saints Mary and Elizabeth Medical Center Chicago’s President & CEO Martin Judd attended the Governor’s first budget address.  Read his front row perspective in the associate newsletter here.

What’s the issue?

  • While Illinois has passed a balanced spending and revenue package for FY2020, there is still a lot of work to be done to ensure the state is on secure financial footing.
  • The State of Illinois was without a full-year budget from June 2015 to July 2017.
  • The lack of a budget severely damaged the fiscal health of the State, so passing a budget that balances spending with revenues in FY2020 is a move in toward stability.
  • In the extended absence of a budget, the state had to continue spending due to court orders and federal consent decrees that mandated spending on items such as Medicaid, state employee salaries and other items. This led the state to spend more than it was taking in in revenue.
  • The net result was a $15 billion backlog of past due bills.  As of May 2018, the current backlog of bills is $6.6 billion.  As of June 2019, the current backlog of bills is $5.81 billion.  You can track progress made on paying the backlog via the Illinois Comptroller’s debt transparency reports here.

Why does it matter?

  • Illinois’ most recent budget stalemate was the longest any state has gone without passing a budget since the Great Depression.
  • Without a budget and additional revenue, the Illinois Comptroller’s office did not have access to funds to pay for core priorities such as payments to public schools, for debt and pension payments, and for state employee salaries.
  • The state budget is critical for programs that serve the most vulnerable in Illinois.
  • Prolonged budget negotiations could have negative ramifications on Illinois’ credit rating.
  • Illinois already has the lowest credit rating of any U.S. state.

What is the AMITA Health perspective?

  • AMITA Health and the communities we serve are directly impacted by the budget. AMITA Health hospitals had been negatively impacted by delayed payments from the state and Medicaid managed care providers, as well as the complete lack of payment of state employee group health insurance claims during the three year budget stalemate.  We cannot afford any further cuts to this critical program.
  • A timely state budget will help Illinois re-stabilize. The state senators and representatives who helped break the budget stalemate and supported a budget voted to provide stability for the state and certainty for the health care providers, schools, universities businesses and community organizations that have suffered under the past budget stalemates.
  • Illinois must be a good steward of taxpayer dollars to serve vulnerable populations. Preparing and voting on a budget is a key responsibility of our elected leaders.  It is not only the morally correct thing to do for the vulnerable members of our communities, it is also the most fiscally correct thing to do for the future of our state. The budget package, if all the revenue projections are realized, protects Medicaid funding and seeks to implement a plan to start paying off the enormous amount of debt the state has accrued over the last two years without a budget.

 

Featured News

Featured news includes articles from multiple viewpoints and is designed to keep you abreast of the current debate around this issue. This information should not be construed as our point of view.

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