If your personal finances were a mess and your bank account dry, would you shop without looking at price tags? Probably not. But that’s exactly what Illinois' 97th General Assembly did in 2011, when it passed 650 new laws – and fewer than 2 percent of these included a fiscal note.
Fiscal notes are like price tags for legislative bills; they estimate the costs, savings, revenue gain or revenue loss resulting from the implementation of proposed legislation. Crafted properly, they can provide a wealth of information elected officials need to make fully informed votes.
Fiscal notes rarely are available to Illinois lawmakers to help guide their decision-making. Unfortunately, in a year when lawmakers pledged fiscal restraint and a new era of financial responsibility, only 10 out of the 650 laws passed and signed in 2011 had fiscal notes.
Beyond the sheer lack of fiscal notes, another permeating concern is that the fiscal notes that have been crafted often are inadequate. Many of them lack background information and underlying calculations, come from biased sources, fail to provide a way to follow up with note’s author and do not account for a law’s wider economic impact outside of government. See Appendix A for an example of an inadequate fiscal note from Illinois, and Appendix B (appendices available in the full report) for an example of a thorough fiscal note from Minnesota. See Appendix C for specific recommendations to improve Illinois’ fiscal note process.
Following a July 2010 survey by the Illinois Policy Institute highlighting the stunning lack of fiscal notes, state Sen. Pamela Althoff, R-McHenry, introduced legislation to fix the problem. Senate Bill 31, dubbed the Fiscal Note Act, would strengthen existing fiscal note rules. It would require bills to receive a fiscal note before they are voted on in the General Assembly unless the sponsor and three-fifths of the chamber vote on the record that a price tag isn’t necessary. These improved and expanded fiscal notes would be created by an independent commission and contain more information on methodologies, assumptions and results. They would provide cost estimates for a five-year forecast timeframe – potentially longer – and be made available online to the public. Moreover, bills passed by the General Assembly and then presented to the governor for signing would be transmitted with fiscal note information.
More than one-third of Illinois’ state senators sponsored the Fiscal Note Act, including members of both parties. Although the bill unanimously passed committee in March 2011, it was subsequently held on the Senate floor and has yet to receive a floor vote.
Fiscal note reform legislation deserves a closer look in 2012. Lawmakers in a state that carries a backlog of unpaid bills in the billions of dollars cannot continue approving new laws without fully understanding their fiscal and budgetary impact.