In his State of the State Address on Jan. 31, Gov. Bruce Rauner promised us he would propose a balanced budget when he delivers his budget address this Wednesday.
Rauner will face both a skeptical audience and a challenging task that day. The skepticism is not surprising, considering the amount of partisan acrimony that exists in Springfield. What is less understood, however, is the magnitude of the challenge the governor faces if he is to propose a truly balanced budget.
Last summer, the Illinois House and Senate overrode the governor’s veto and raised both the personal and corporate income tax rates to 4.95 percent and 7 percent, respectively. Almost immediately following this vote, the governor began insisting that the budget lawmakers had passed over his veto was out of balance. On Jan. 22, the Illinois Comptroller Susanna Mendoza, a sometimes vocal opponent of the governor, validated his criticism by issuing a report that highlighted unappropriated liabilities of $2.3 billion.
The comptroller reports there are $2.3 billion in unpaid bills sitting at state agencies for which there is no appropriation to pay them. If you look only at the 2018 budget itself, the deficiency between what Illinois spends and what it takes in is now $600 million on an overall spending level of $37.4 billion. That amount incidentally, is the most money Illinois has ever spent. Our state spending has increased by almost 10 percent since Fiscal Year 2012.
When I announced my 2018 legislative priorities at the end of January, I grouped them into three categories: creating jobs, cutting spending, and keeping promises.
Although job growth will be required to achieve long term fiscal stability, I hope the governor does not submit a budget proposal that is balanced through projected growth. Instead, I hope he addresses my final two categories and gives us a budget proposal that includes spending cuts, while honoring the commitments Illinois has made to its citizens.
When the FY18 budget was sent to the governor, it was $1.7 billion out of balance. Since then, the governor has taken action to reduce the deficit to $600 million. Reducing $600 million in government spending will be a difficult, but not an impossible task.
The first step the governor should take in order to get there is to hold the line on new spending. The president of the Illinois State Board of Education recently requested an additional $7.5 billion in K-12 education for next year’s budget; however, this is unrealistic and not feasible. Now is not the time to increase spending.
What we should do is continue to look for ways to cut back. We can do this is by consolidating unnecessary and redundant state offices and pension reform. With pension reform we could offer a buyout for vested, inactive pension holders.
Spending reductions must also include common-sense entitlement reforms. These reforms do exist and can save significant amounts of money. For example, Gov. Rauner’s administration has saved taxpayers money by simply using six-month redeterminations on childcare eligibility, as opposed to checking eligibility on an annual basis.
While I am skeptical about any new spending, I do believe our state needs to keep the promises it has made. Two of those promises involve payments owed to the City of Sparta for the World Shooting and Recreational Complex and the millions of dollars in back wages owed to thousands of state workers.
With the complex, lawmakers need to restore authorization for bond payments to the City of Sparta that the state failed to make in 2017. As for the back wages, lawmakers must support a supplemental appropriation resolution which I filed last week to pay the $63.1 million remaining in back pay that is owed to state employees pursuant to a 2016 Illinois Supreme Court decision.
With this week’s budget address, I hope the governor pivots to the here and now. We need a realistic budget proposal that balances spending cuts while promise keeping. I look forward to his speech on Wednesday.