Consolidation, increased emphasis on enforcement of tax laws highlight Revenue budget

SPRINGFIELD, ILL. - Gov. Rod R. Blagojevich today proposed a fiscal year 2004 General Revenue Fund budget of $144.7 million for the Illinois Department of Revenue, a decrease of $7.8 million (5.1 percent) from the FY 03 budget.

The governor's budget makes significant administrative reductions by merging the Department of Lottery into the Department of Revenue and by having the Department of Revenue provide support services to the Illinois Liquor Control Commission and the Illinois Racing Board.

"The Department of Revenue will focus on the collection of the taxes needed to fund critical state services and on the enforcement of tax laws," said director Brian Hamer. "We will use this budget to rebuild our depleted corps of auditors and tax collectors to enforce tax compliance."

Major features of the budget include additional money to liquidate an $800 million backlog of unpaid state income tax refunds, to consolidate processing of various state fee payments in the department and to enhance prescription drug coverage for seniors.

• Increased allocation of income tax receipts to the Refund Fund will allow the department to liquidate an estimated $800 million balance in unpaid state tax refunds that will exist on June 30.

• Using its automated remittance systems, the department will begin processing fees collected by other state agencies. Agencies that collect fees will use bills containing standardized vouchers that can be processed along with the payments using Revenue's automated equipment. The department will deposit the receipts and provide agencies with electronically formatted information. Phasing in of the new process will begin January 1, 2004. Subsequently, the department will be given responsibility for using its expertise to collect delinquent fees for other state agencies.

• SeniorCare will be expanded to include seniors with income levels up to 250 percent of the federal poverty level, thereby providing the program's broader coverage to seniors who now receive Pharmaceutical Assistance benefits. Seniors will get improved benefits, and the department's Pharmaceutical Assistance program will be limited to approximately 14,000 disabled participants. The department will continue to qualify and enroll seniors in the SeniorCare program.

In Revenue's tax administration area, most of the cuts reflect reductions in staffing levels. Only 131 of 433 positions vacated by early retirement will be filled. More than 200 of the positions left vacant are managerial, supervisory or administrative.

Savings within the tax operations area will be accomplished through more options for electronic filing and payment of taxes. One of every three individual tax returns in 2003 was received electronically; half of electronic filers used direct deposit to receive refunds. Another 15,000 individuals filed the Circuit Breaker applications online.

Self-service options will continue to supplant personal services. More than 2.3 million tax forms were downloaded from the department web site. So far this year, more than 45,000 taxpayers have used the department's online system to check the status of their refunds and another 4,600 have checked on their Circuit Breaker grants online.

The budget provides for reductions from 2,301 to 2,014 in tax administration personnel. The department's overall headcount reduction is 348 positions, from 2,756 to 2,408.

Riverboat gaming, overseen by the Illinois Gaming Board, is expected to generate $585 million for Illinois schools and another $110 million for the state's riverboat communities.

The Lottery is expected to contribute $560 million to the Common School Fund to finance elementary and secondary education.