At a Valentine’s Day address to the City Club of Chicago, Illinois Deputy Gov. Dan Hynes, a former state comptroller, described a state budget “straining with red ink,” a multi-billion dollar backlog of unpaid bills and “difficult choices to make.”

To be sure, Gov. J.B. Pritzker faces serious financial constraints as the Chicago Democrat begins this week to push the first budget plan of his four-year term. That includes a $3.2 billion budget hole for upcoming fiscal year 2020, which begins in July, and a $7 billion backlog of unpaid bills.

In a newly released 11-page report entitled "Digging Out: The Rauner Wreckage Report", Pritzker’s office claims that Republican predecessor Bruce Rauner drove the state “into a ditch.” While Rauner was in office during a record setting budget impasse, blaming the state’s financial condition on one’s predecessor is an often-used ploy of Illinois governors. In a new analysis, the Center for Illinois Politics sought to put those numbers into context.

The deficits

Budget deficits during the gubernatorial tenures of Democrat Pat Quinn, Republican Bruce Rauner and Democrat J.B. Pritzker have seen peaks and valleys, topping out at a record-setting $14.6 billion in 2017, a result of the state’s two-year budget impasse.

During Gov. Pat Quinn’s first budget address following Rod Blagojevich’s impeachment, his Governor’s Office of Management and Budget estimated his predecessor had left the state with a $7.3 billion deficit. In Rauner’s first year in office, the budget office estimated a $6.3 billion deficit. Pritzker has estimated a $3.2 billion deficit, as he outlined a $39 billion spending plan to the General Assembly Feb. 20, beginning the annual budget making process.

Bill backlog

The state’s backlog of unpaid bills from state service providers and vendors, which accrue late payment charges, has also risen and fallen by billions in recent years. Data from the Illinois Comptroller’s office shows the backlog peaked at $16.7 billion during the 2-year budget impasse between Rauner and leaders of the Democratic-led legislature in November 2017. In January of 2011, the backlog was at $4.6 billion. It currently stands at $7.1 billion, data shows.

Pension obligations

The Civic Federation of Chicago’s Illinois Institute for Fiscal Sustainability notes in a recent report that the state’s “inability to balance its budget and pay its bills stems in large part from the state’s overwhelming pension obligations.”

The unfunded liability of the state’s five retirement systems—for Illinois public school teachers outside of Chicago, state employees, university employees, judges and members of the General Assembly—stood at $133.7 billion at the end of fiscal year 2018 last June. Although the state is required to contribute more to pensions these days to make up for years of underfunding, the liability is expected to keep growing until 2029, the federation notes.

Solutions

Each governor has proposed a variety of solutions in his budget plan to help bring the state back into the black, which are sometimes dubious and not always enacted. They include:

• The sale of the state owned assets, including the James R. Thompson Center, state lottery, and Illinois Tollway
• Shifting pension responsibilities to local government
• Restructuring the schedule of annual payments to pension funds
• Pension buyout savings
• Legalizing and taxing recreational marijuana
• Placing a sales tax on some services. Other states, including Wisconsin, Iowa and Missouri, tax services.
• Income tax increases
• A shift to a progressive income tax, which would require voter approval to amend the Illinois Constitution. Nationally, 34 of 50 states have some form of progressive income taxes.
  

Pritzker’s plan

Pritzker’s $39 billion plan cobbles together $1.1 billion in new revenue from various sources, including $212 million from betting, $170 million from recreational marijuana, $55 million from increasing taxes on cigarettes, $20 million from a statewide 5 cent plastic bag tax, and $6 million for phasing out a private school tax credit program.

The plan also calls for borrowing money and extending the deadline for which the pension systems have to be 90 percent funded by 7 years, to 2052. By doing so, this would reduce the state’s pension payment by nearly $900 annually.

Note: The Center for Illinois Politics is a nonprofit, nonpartisan organization dedicated to providing clear, fact-based information to encourage more Illinoisans to be active in politics. This article has been reviewed by a bipartisan panel of former lawmakers, political analysts and academics to ensure its nonpartisan nature.

Contact Kerry Lester at kerry@centerforilpolitics.org

Sources: Governor’s Office of Management and Budget reports, 2009-2019, Civic Federation of Chicago, Illinois Comptroller’s Office, Illinois Manufacturers’ Association