This week's Illinois State Association of Counties (ISACo) News and Views e-newsletter summarizes key fiscal issues confronting Illinois in 2025, provides information about a new House pension appropriation committee, shares grant funding opportunities, announces that Illinois has been selected for a new federal maternal health program, links to articles ISACo staff is reading to stay informed, conveys information about the upcoming National Association of Counties (NACo) Legislative Conference, highlights ISACo corporate partner United Healthcare and invites counties to join ISACo.
New Year Ushers in Immense Challenges for Governor Pritzker and State Legislators
Imposing fiscal issues loom over legislators recently inaugurated to serve within the 104th General Assembly.
Illinois is facing a projected budget deficit of approximately $3 billion for the fiscal year beginning July 1, 2025. This anticipated shortfall is attributed to the expiration of federal pandemic aid and rising expenditures, including increased pension contributions and healthcare costs. House Speaker Emanuel “Chris” Welch has indicated that addressing this deficit will be a priority for the General Assembly, emphasizing the need for careful budgetary planning and stakeholder engagement to develop effective solutions.
A significant contributor to the state's financial challenges is the annual cost of properly funding the state's five underfunded pension systems. Current pension expenditures obligate approximately one-fifth of the state's budget annually. Among the five systems, Illinois' unfunded pension liability total approximately $144 billion. According to a report published by Fitch Ratings, Illinois' unfunded pension liability combined with other post-employment benefit costs, is $206.5 billion. When compared to personal income, Illinois' pension debt is the second worst in the nation, according to Fitch Ratings.
Further straining the state's finances is pressure to address the looming "fiscal cliff" confronting Chicago area transit agencies.
This situation arises from the impending depletion of federal COVID-19 relief funds that have sustained operations for agencies like the Chicago Transit Authority (CTA), Metra, and Pace amid decreased ridership during the pandemic. Projections indicate that by 2026, the Chicago region’s transit system could face an annual budget shortfall exceeding $730 million. This deficit may necessitate severe service reductions and fare hikes, potentially triggering a detrimental cycle of declining ridership and further revenue losses. To address this looming crisis, stakeholders are exploring solutions such as reallocating federal funds from highway projects to public transit and implementing governance reforms and consolidation of service providers to enhance efficiency and coordination among transit agencies.
ISACo has created a resource page with information about transit reform.
What do these financial challenges mean for counties? First and foremost, there is a need for vigilance in protecting county revenue sources from being diverted to address the state's long-standing financial issues. Second, careful scrutiny during the state budget process is necessary to guard against cuts to programs and services that affect counties.
The Governor's combined State of the State/Budget Address on February 19 will provide an initial sense of his proposals and their impact on county government.
House Rules Create Pension Appropriations Committee
The Illinois House of Representatives has established a new pension appropriations committee to address the state’s significant pension deficits (initially referenced above). House Speaker Welch emphasized the committee’s role in engaging stakeholders to develop effective solutions, especially as the state anticipates a budget deficit of approximately $3 billion for the fiscal year starting July 1, following the reduction of federal pandemic aid.
This initiative is part of broader efforts to manage Illinois’ pension liabilities, which are currently only 46 percent funded relative to long-term obligations. The committee will explore various strategies, including evaluating the sustainability of pension benefits established in 2011 and considering proposals to achieve full pension funding by 2048, extending beyond the current mandate of 90% funding by 2045.
The new committee was created on January 9 when the Illinois House approved its rules for the 104th General Assembly.
The formation of the new pension appropriations committee is particularly relevant as legislators actively consider reforms to enhance Tier 2 pension benefits for public employees hired after January 1, 2011. The Tier 2 system, established to reduce long-term liabilities, has faced criticism from public employee unions for offering less generous benefits compared to the Tier 1 system, which covers employees hired before 2011. Concerns have been raised about the system’s compliance with federal Social Security “safe harbor” standards, which require that public pension benefits be at least equivalent to Social Security benefits.
ISACo will monitor and report on any proposals that would affect Illinois Municipal Retirement Fund (IMRF) benefits.
Energy Efficiency and Conservation Block Grant Program
The Illinois Environmental Protection Agency (IEPA) opened a fourth round of applications (available via this link) for funding through the U.S. Department of Energy’s Energy Efficiency and Conservation Block Grant (EECBG) Program. EECBG grants, which range from $50,000 to $250,000, are available to counties and municipalities for the development and completion of energy efficiency audits and local government building upgrades. The deadline to apply is Monday, February 3, 2025, by 5:00 p.m. CST. More information and additional resources are available on the IEPA Office of Energy EECBG Program webpage (available via this link).
9-1-1 System Consolidation Grant Program
The Illinois State Police Office of the Statewide 9-1-1 Administrator is seeking applications for its 9-1-1 System Consolidation Grant Program. The program seeks to defray costs associated with 9-1-1 system consolidation while increasing the availability and efficiency of 9-1-1 service coverage throughout Illinois. The Notice of Funding Opportunity is available via this link. A total of $7.5 million is available statewide. Eligible entities are all 9-1-1 authorities, except the City of Chicago. The deadline to apply is Monday, February 3, 2025, by 11:00 p.m. CST.
Broadband Equity, Access, and Deployment Connect Illinois Grants
The Illinois Office of Broadband and Illinois Broadband Lab have released a Notice of Funding Opportunity (available via this link) for the fourth round of Broadband Equity, Access, and Deployment (BEAD) funding through the Connect Illinois Broadband Program. BEAD is meant to defray costs associated with the deployment of broadband service to unserved and underserved locations and eligible community anchor institutions. Applications will open Thursday, January 23, 2025. More information can be found on the Illinois Department of Commerce and Economic Opportunity’s website (available via this link), including a list of eligible anchor institutions, such as a number of fire protection districts, police departments and government buildings throughout the state.
Illinois Selected for New Federal Maternal Health Program
The federal Centers for Medicare and Medicaid Services (federal CMS) selected Illinois as one of 15 states to participate in a new federal program aimed at improving maternal health outcomes. The 10-year program will generate additional funding for Illinois' Medicaid program, with most of the money to be invested in provider infrastructure. Additional information is available via this link.
What We're Reading
'Fourth Wave' of Opioid Deaths Driven by Mixes of Drugs (Governing)
Ten of the Biggest Issues to Watch in 2025 (Governing)
Report: CPS on the Financial Brink, State Takeover Not Out of the Question (Chicago Tribune)
Trump's Cabinet Picks are Set for Senate Hearings. Here's the Schedule (Chicago Tribune)
NACo Legislative Conference
The NACo Legislative Conference brings together nearly 2,000 elected and appointed county officials to focus on federal policy issues that impact counties and our residents.
This year, the conference will take place from March 1, 2025, to March 4, 2025, in Washington, D.C.
Attendees have the opportunity to engage in second-to-none policy sessions, interact with officials of the new Administration and meet with members of Congress.
This is a one-of-a-kind advocacy opportunity to strengthen our intergovernmental partnerships for years to come.
Click on this link to register for the conference.
CORPORATE PARTNER SPOTLIGHT
The mission of UnitedHealthcare is to help people live healthier lives and make the health system work better for everyone. UHC dedicates itself to this every day for our members by being there for what matters in moments big and small — from their earliest days, to their working years and through retirement.
Across the United States, UHC offers health benefit plans for all ages, all lifestyles and all kinds of budgets — including member programs for individuals and families, people with health insurance through work, and Medicare and Medicaid beneficiaries.
They work with more than 1.3 million physicians and care professionals and over 6,700 hospitals and care facilities nationwide. Together, they work to provide more people with access to quality care when and where they need it.
UnitedHealthcare believes that when it comes to your health, everything matters. That’s why they are constantly working to improve the health care experience and make it deliver for the needs of everyone.
They know health care can be complicated, so they work to make it simpler — for patients as well as providers. Streamlining processes and providing answers helps make coverage easier to understand and use.
UHC believes everyone deserves quality health coverage they can afford. So they provide coverage options designed to fit all kinds of budgets, and always look for ways to take costs out of the system to improve affordability and access for all.
They focus on serving the individual, offering access to quality care, personalized solutions and support for every step of the way.
Click here to learn more about UnitedHealthcare.
Become an ISACo Member!
Is your county a member of ISACo? If not, why not?
ISACo is a statewide association whose mission is to empower county officials to provide excellent service to their residents.
ISACo member counties are comprised of forward-thinking public servants who recognize that the challenges confronting county governments require new and innovative ideas, collaborative solutions and collective advocacy at the state and federal levels of government.
Members of the association will benefit from education and training opportunities, peer-to-peer networking, shared resources and robust representation before policymakers at various levels of government. ISACo creates and connects county officials to these opportunities and successfully equips them to make counties ideal places to live, work and play.
If your county is interested in discussing membership in ISACo, please contact Member Services and Communications Manager Tiffani Home at (217) 679-3368 or thomer@isacoil.org. ISACo member counties are listed here. Thank you for your consideration.