The Illinois Policy Institute is advancing reforms supported by Sen. Pam Althoff and other Senate Republican lawmakers that would help the state’s fiscal note process more effectively highlight the impact legislation has on Illinois’ finances.

“These are extremely difficult times for the State of Illinois, and we need every tool at our disposal to roll back the cost of government,” said Althoff, a member of the Senate Appropriations Committee. “By enhancing fiscal notes, we help lawmakers, the media and the public get a better idea of just how costly a program will be to the state over the short and long term.”

Fiscal notes are incorporated into legislation as a way to estimate the cost of an initiative, as well as any savings, revenue gains, or losses that may result from the proposed bill becoming law. Unfortunately, Illinois’ fiscal notes often fail to provide accurate estimates or precise information on the true fiscal impact of the legislation.  Additionally, the long-range financial impact is rarely included.

In 2005, the initial legislation was introduced as a bill relating to the furlough of inmates to State agencies for research. Though the Illinois State Police filed a fiscal note related to the original legislation, there was no updated fiscal note filed associated with the All Kids expansion when it was approved by lawmakers. Recently, a May 2010 report was published by the Illinois Auditor General reporting that the All Kids expansion cost a net $70 million in fiscal year 2009.

In response, the Illinois Policy Institute is calling for fiscal note reform to improve the availability, accuracy and transparency of this important financial information. Specifically, the organization is calling for reforms that would require fiscal notes whenever the proposed legislation involves spending or taxation, unless the sponsor and a majority of lawmakers present agree that a fiscal note is not necessary. They are also calling for the notes to include a minimum five-year forecast.

Additionally, the notes would have to be authored by a neutral source, not the state agency that will be impacted by the legislation. The note should include an explanation of the methodology used to produce the cost estimates and the reason for using that method, as well as references and contact information of the person or entity who supplied the information. The fiscal notes should be made available on a public Web site, and the fiscal note process should be governed by a state body to ensure compliance.

Illinois’ taxpayers look at price tags—why wouldn’t Illinois’ leaders?