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Column

UNDERSTANDING ILLINOIS: How will Pritzker frame a financial crisis?

State could be in for another year of dishonest budgeting

I hate to play the skeleton at the feast, because Gov.-elect J.B. Pritzker has an apparently strong desire to do more and better for the state of Illinois. Yet, he must face the harsh realities of having inherited a fiscal system that is broken, deep in debt, and bankrupt in the sense that Illinois cannot pay its bills in anything close to a timely fashion.

So, will the themes for his forthcoming State of the State and budget messages be akin to “Happy Days Are Here Again” or a somber “Blood, toil, tears and sweat”?

Here is a snapshot of the situation he faces.

For probably 2 decades now, Illinois government has been running annual budget deficits of roughly $3 billion or more, on average, when unfunded future obligations and piled up unpaid bills are included.

The situation is so bad that in 2017, according to Reuters, the state paid out more than $1 billion (a 1 followed by 9 zeros) to vendors in late-payment penalty fees, frittering away a billion-plus taxpayer dollars that did not buy a solitary good or service.

The state’s credit cards are all maxed out. If Illinois continues to spend more than it takes in, while bills pile up, the folks at the bond rating agencies will begin to mutter “Puerto Rico,” the bankrupt semi-sovereign American commonwealth, under their breath.

During his campaign, J.B., as he likes to be called, pledged to enact a progressive income tax – higher tax rates for higher incomes – a big infrastructure program, and increased spending for education, higher education, and more.

In the Legislature, J.B.’s fellow Democrats have big majorities in both chambers. Like a Greek chorus, almost offstage, a puny band of Republicans will lob spitballs at the Democratic phalanx. 

Enacting J.B.’s wishes will require Democratic lawmakers to cast at least three tough votes: First, for a big gas tax increase to rebuild roads, bridges and mass transit; second, for a constitutional amendment proposal for a graduated income tax, and, third, to increase taxes to balance the budget and fund the spending boosts J.B. wants.

I spoke with a savvy former Illinois Democratic representative, who observed that making three tough votes in one spring legislative session might be more than Madigan and his devotees in the House can stomach.

Here is where things stand: Any revenues from new gambling and recreational marijuana will generate in the hundreds of millions range annually, not the billions needed to balance the budget honestly.

So, the former rep thinks it likely there will be yet another year of dishonest budgeting. Will it be “Happy Days” or “Blood, sweat, toil and tears”?

Jim Nowlan is a former Illinois legislator, agency director, senior aide to three unindicted governors, campaign manager for U.S. Senate and presidential candidates, and professor of government at several universities in Illinois as well as China.

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