Chicago Watchdog Forms Institute

CHICAGO - The Civic Federation of Chicago, a local, business-funded government watchdog group, is launching a new institute with a multi-year grant from the John D. and Catherine T. MacArthur Foundation aimed at highlighting Illinois' fiscal health and influencing policy decisions.

The MacArthur Foundation notified the federation - a nonpartisan, nonprofit organization that follows the state and local governments - of the grant award last week after discussions over its proposal to create the Institute for Illinois' Fiscal Sustainability to promote tax policy and fiscal reform.

"We are really very pleased that the John D. and Catherine T. MacArthur Foundation would assist us in the creation of this institute which will really concentrate resources on the state's biggest fiscal challenges, Medicaid and health care and debt and capital programs which account for more than half of the state's operating budget," said Civic Federation president Laurence Msall.

The institute's formal mission is to improve the state's decision-making process by providing timely fiscal policy analysis and recommendations to state officials, the media and public to promote a more sustainable fiscal environment. The institute is currently looking for several analysts and Msall said he expects it to be up and running later this year. Additional funding will be sought although the MacArthur grant is sufficient to launch the initiative, he said.

The federation has issued stinging assessments of the recent budgets proposed by Gov. Rod Blagojevich and pushed the state to do more to address its debts and escalating costs in the area of health care. The state's debts - outside of its bonded debt - include a $42 billion unfunded pension liability and $24 billion of other post-employment benefit liabilities. Illinois is persistently about $1 billion behind in paying its Medicaid bills.

The federation has recommended pension and health care benefit reforms and urged the state to rapidly rein in growing costs by enacting reforms. The federation supports efforts behind approving a new capital budget but has called for more accountability in how funds are allocated.

The institute is being established as the state has warned that revenues are falling about $200 million behind estimates in the current budget year.

Amid an ongoing feud between state lawmakers and Blagojevich, the General Assembly rejected many of the governor's proposals and eventually adopted a $59 billion operating budget for fiscal 2009 that included the reauthorization of approved capital projects. The governor cut about $1.4 billion from that budget but lawmakers are haggling over restoring some of the cuts.

Fitch Ratings and Standard & Poor's rate the state's $21 billion of GOs AA, with Fitch assigning a negative outlook, and Moody's Investors Service rates the state Aa3.

For reprint and licensing requests for this article, click here.
Healthcare industry
MORE FROM BOND BUYER