SPRINGFIELD, Ill. – The Pritzker administration is facing a stark reality with the state’s budget due to the ongoing pandemic and failed graduated income tax proposal.
New estimates from the Governor’s Office of Management and Budget (GOMB) show a $3.9 billion deficit for this fiscal year. However, the picture could get worse over the next five years. The office is projecting deficits ranging from $4.8 billion in Fiscal Year 2022 to $4.2 billion by Fiscal Year 2026. Reporters asked Gov. JB Pritzker about the office’s concerning report Monday afternoon.
“There are not solutions to the budget problem that are built into that,” Pritzker said. “That was a definition of what the budget problem is if we go without any solutions.”
State lawmakers relied on borrowing $5 billion to fill holes in the current budget, but the administration says the deficits for the next three fiscal years would grow larger if Illinois borrowed that money. Pritzker notes every state is suffering from a severe lack of revenue because of COVID-19.
“The federal government is really the only resource that we all have to turn to. They’ve helped big corporations along the way,” Pritzker explained. “I think we all believe that we want to save both jobs and the services that we’re all providing for the public.”
Time for the tough decisions
In the meantime, Pritzker is looking into spending cuts and adjusting revenue. GOMB’s report says the administration asked state agency directors to include a potential 10% cut from their FY21 appropriations for the next budget. Still, the office wrote cuts to spending can’t solve these issues alone.
“The Governor believes that support for quality education, access to healthcare, and sufficient social services for when people need a helping hand to get on their feet are all part of the essential functions of state government. However, along with servicing our debt and meeting our pension obligations, these costs make up over 75% of the budget,” the office wrote. “Across-the-board cuts to state government spending means these areas will not go untouched.”
Pritzker continues to note everything is on the table, but cuts will come first. “I think those cuts will be somewhat painful. And then, we’ll consider all the other options about what we need to do in order to get to balance for FY21 and moving forward.”
GOMB suggested Pritzker will work with lawmakers to identify corporate and business tax loopholes along with tax adjustments. However, the governor didn’t specifically address the tax adjustments Monday.
The office says Illinois’ backlog of bills could also significantly grow in the five-year span. They project over $33 billion in unpaid bills in Fiscal Year 2026. That’s nearly double the backlog Illinois saw during the budget impasse under former governor Bruce Rauner.