By: Ted Dabrowski and John Klingner
Earlier this week, Wirepoints warned that the eerie silence in Springfield augured bad news for Illinoisans.
Sadly, we were right.
The House of Representatives has voted 97-18 to pass a FY 2019 budget. The same budget was approved in the Senate yesterday by a vote of 57-2. Given that most legislators were given only a few hours to review the details of the 1,245 page budget, you can bet none of them really knew what they actually voted for.
The bill is now in the hands of Gov Rauner, who has said he will sign it.
Expect a major celebration from both sides about the civility and the bipartisanship that came about this time around. Expect the media to commend all sides for reaching an agreement without the bitterness of the past three years. Expect to hear the word compromise over and over.
But what about the budget? Just because they say it’s balanced, is it? And just because they have a budget, is it good for Illinoisans? And just because there was no impasse, will Illinois be able to avoid a junk rating?
The answer is no, no and no.
What we had hoped to hear coming out of the statehouse was a raging debate about the reforms that were needed to reverse the downhill course this state is in.
No debate was ever heard.
Instead we can expect near record spending. We’ll have to see where the numbers truly come out, but spending will exceed $38.5 B. Ignore the headline numbers. What really matters are the expenses the state accrues during the year, and those are set by the laws currently in place. What the legislature appropriates – the $38.5 billion number – is always much less than what they actually spend. It always is. That’s how Illinois ends up with unpaid bills year after year.
We also know the legislature will use $600 million in fund sweeps – a tricky way of taking money from accounts that aren’t part of the general budget – to make the budget numbers work. They’ll also count on approximately $400 million in pension savings that may never materialize, and book another $300 million in revenues from the sale of the Thompson center (for the third year in a row), to “balance” things out.
So they’re still playing games and using one-time fixes, even after using every bit of the $5 billion dollar tax hike.
So no, this budget isn’t balanced. But did anyone truly think it would be?
As it relates to Illinoisans, this budget won’t make things any better. It will just perpetuate everything that’s going wrong in Illinois. Just ask a few questions about this budget.
Were property taxes frozen and property tax relief delivered to all Illinoisans? Wasn’t that all the rage in the legislature last year? Property tax relief?
Was a major workers’ comp reform bill passed to bring life back to the state’s shrinking manufacturing base?
Did the legislature move all new workers into a 401(k)-style plan, ending the failed defined benefit system going forward?
Did lawmakers roll back some of the nation’s most stringent collective bargaining laws so that local governments can bring their costs in line with what their residents can afford?
Did Springfield authorize local bankruptcy plan for Illinois municipalities in anticipation of the worsening local pension crisis playing out across the state?
Did politicians consolidate overlapping and duplicative school districts to stem rising property tax bills?
Did Gov. Bruce Rauner deliver on his promise to partially roll back some of the tax hike passed last year?
The answer to all of them is no.
And as for the rating agencies, there is nothing for them to find comfort in. Illinois’ political elite are naive if they think that just because “negotiations” were civil, Moody’s or S&P will relax their critique of Illinois.
Illinois’ finances have deteriorated in recent years despite the booming economy and record stock markets. So imagine how worried the agencies must be about Illinois when the next inevitable recession hits. Without spending reforms, Illinois is totally unprepared. Any good news out of the rating agencies will be surprising.
This budget represents a return to the same politics that has driven Illinois into the ground over the past several decades.
It isn’t the budget Illinoisans want or need. If Illinois is going to keep its people here, grow its economy and bring back jobs, lawmakers have to pursue reforms that can restore confidence in this state.
Does this budget do that?
The answer is a resounding no.