By: Ted Dabrowski and John Klingner
It’s budget time in Illinois and predictably, nothing has changed. Gov. J.B. Pritzker has introduced a $41.6 billion budget for 2022 that papers over the state’s problems rather than address them.
Like every governor has claimed in the past 20 years, Pritzker says his budget is balanced. And, as usual, we at Wirepoints have nothing positive to say about the details of Pritzker’s proposal or his “balanced” budget claims.
In his address, the governor made the budget out to be consequential: That it doesn’t hike income taxes. That it doesn’t rely on federal aid to balance. That it pays the state’s official pension costs in full.
But none of that really matters considering Illinois’ structural problems. Illinois has the nation’s worst credit rating. It has the most pension debt, by far. The state is losing more population than any other state in the country. Home values are falling. And residents pay the highest property taxes (See graphics below).
The 2022 budget doesn’t address any of that. It does nothing to make Illinois less expensive for ordinary residents. It does nothing to make it easier for businesses to survive or compete. And it does nothing to attract more people to this state.
A top-line review of Pritzker’s budget numbers is below, but for those of you who want the broader takeaway of his proposal, here it is:
Illinois’ budgets are never balanced. Pritzker might make revenues and expenditures match in 2022, but the state’s official budget ignores billions in pension contributions the state should be making. True actuarial pension costs would add another $4 billion to the budget, while retiree health insurance would add about $2 to $3 billion more.
That’s why, even though each governor claims Illinois’ budgets are balanced, the state’s debts continue to grow year after year.
The governor deserves no credit for not hiking income taxes. In his address, Pritzker gave himself credit for not hiking taxes on Illinoisans. His attitude is exactly wrong. Residents already pay some of the highest taxes in the nation, including the highest property taxes. And they’ve already rejected tax hikes when they voted down Pritzker’s proposed progressive tax. If the governor wants gratitude from Illinoisans, he should enact what they actually want: tax relief enabled by structural reforms.
Closing $932 million in “corporate tax loopholes” means raising taxes on struggling Illinois businesses. Pritzker’s budget raises nearly $1 billion in new revenues by closing “corporate tax loopholes.” In other words, Pritzker is raising taxes on businesses still struggling to survive the economic lockdowns the governor imposed.
The budget relies on over $500 million in fund transfers. Pritzker deals with part of the 2022 deficit by engaging in budget gimmicks. Taking cash from other funds and moving to the general funds is a sleight of hand – it simply creates a shortfall somewhere else in Illinois government.
Neglecting pensions means the state’s biggest crisis will only get worse. Gov. Pritzker’s address only mentioned pensions, the state’s biggest expense, once. In all, the 2022 budget will spend over $11 billion on official state retirement costs ($9.4 billion on pensions, $800 million on pension bonds, and approximately $1 billion on retiree healthcare). Those costs will consume more than a quarter of the state’s total revenues. And without structural reforms to Illinois retirements, those costs will only continue to grow.
Once again, Gov. Pritzker has shown Illinoisans he doesn’t have a real plan to fix this state.
What Illinoisans really need is a multi-year, structural plan that tackles the state’s deepest crises, including pensions, collective bargaining laws and local government consolidation.
For a deeper rundown of Pritzker’s 2022 budget, watch Wirepoints’ segment on The Illinois Channel below.
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2022 Budget Facts:
Revenues
- Total state revenues drop to $41.7 billion, down from $43.5 billion in FY 2021
- That revenue drop is due to the state’s borrowing of $2 billion in Federal Reserve funds in 2021. Remove that borrowing and revenues are about the same.
- Total state tax revenues are up by $640 million vs. FY 2021
- Federal revenues are down by $413 million vs. FY 2021
Expenditures
- Total state expenditures drop to $41.6 billion, down from $43.5 billion in FY 2021
- That expenditure drop is due to the state’s repayment of $2 billion in Federal Reserve loans in 2021. Remove that repayment and spending is about the same.
- Education spending is flat at $10.8 billion
- Healthcare spending is down by $600 million
- Pension costs total $9.3 billion, up by $740 million.
Closing a $4.8 billion budget gap
The 2022 budget started out with an official $4.8 billion deficit. $2.2 billion of that gap was eliminated by cutting the deadline to repay interfund borrowing, as well as improved state and federal revenue forecasts.
The remaining $2.6 billion deficit was filled by:
- Closing $932 million in “corporate loopholes.” The budget:
- Halts the shutdown of the state’s corporate franchise tax.
- Cuts construction job tax credits and other incentives.
- Reduces tax credits for donors to the private school scholarship program.
- Ends a sales tax exemption for manufacturers.
- Caps operating loss deductions for businesses to $100,000 annually.
- Ends a sales tax exemption on biofuels.
- $565 million in fund transfers
- $1.3 billion in cuts and reforms. Included in that number is $700 million in cuts Pritzker carried over from last year as well as some state worker healthcare savings.
Appendix Graphics
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
I have not wasted time reading another of the usual faked budgets that I am so familiar with in my lifetime. However as a question, if someone knows, is the sale of that “big mac” building being counted once again as to fund inflows?
Suggested solution: Illinoisans who are targeted with hatred and contempt by Illinois government can co-operate to create a new cryptocurrency. Trading goods and services in exchange for that medium of exchange (the altcoin for Illinois nongovernment people) will be a way to protect ourselves from those who bear us such ill will. “Mining ” our altcoin will be a variation on both POW and POS; proof of work will be described as individual provider or seller directly to individual buyer within community, and valuation of traded goods and services will be determined in free market method by community members on… Read more »
Wirepoints excels at presenting facts. Unfortunately, the majority of Illinois voters reject facts as conservative evil racist propaganda. They would rather believe the liberal lies. I expect that occasionally Wirepoints gets through to someone and they stop believing the lies. I also expect that is an extremely rare occurrence.
You accurately describe the far left now running the show, but they are a smaller minority than you might think — 20 to 30%, tops. I have seen recent, credible but proprietary polling on this: Illinois is a moderately conservative state, and has long been that way. I was stunned at how many identified themselves as conservative — a clear majority. Most surprising, even though Dems clearly outnumber GOPers, a significant portion of Dems call themselves conservatives. I’d say nearly half are generally on our side on most policy issues. Forget the 30% on the left that has closed minds.… Read more »
Yet they vote for blue no matter who.
We need to stop the gravy train to see more evidence of conservatives in voting. Even though many Dems may self-identify as conservative, in the end they will still vote their pocketbook (as I concede most people will do, not just them).
“Illinois is a moderately conservative state, and has long been that way.” Not sure how much I trust polls anymore, but I’ve always believed that it’s a large minority conservative, just under 50%. R’s can win with low D voter turnout. Progressives are probably 30% for sure and they are loud and vocal and angry and everywhere. The issue, and I’ve repeated said, is that a barely 50%+ majority was gerrymandered into a completely safe supermajority by Democrats, so they control 69% of the legislature. The IL GOP has been demoralized and is broke, with bad messaging because there’s no… Read more »
Great article. Debtsor, you comment often here but always have something to say that’s not repetition.
And maybe a clear majority of people who have left Illinois were/are Republicans?
This is true. Illinois’s population loss is mostly downstate Republican. But that doesn’t accurately reflect the situation, because there is also large numbers of people leaving the Chicagoland area, but they are being replaced with hardcore upper middle class liberal/progressive voters, or immigrants who don’t vote at all, so either way, it’s another loss for the Republicans. Trump still carried something like 42% of the state, which is still millions of people; and at least in my area, at the granular level, he underperformed Curran the Republican senate candidate. Trump barely lost my neighborhood precinct but Curran won mine and… Read more »
Yes, the left rejects facts inconvenient to their narrative. Ask the left about the science of biology. Specifically, biology related to gender.
Excellent summation!