Nine things Gov. Pritzker didn’t tell you about Illinois’ 2023 budget – Wirepoints

NOTE: This piece has been updated to reflect Moody’s credit upgrade of Illinois on 4/21/22.

By: Ted Dabrowski and John Klingner

It’s been over a week since Illinois lawmakers passed the state’s 2023 budget. Many lawmakers declared the budget responsible and historic, a win for the middle class, and more.

“This budget was possible because of sound fiscal responsibility,” House Speaker Chris Welch told Chicago Tonight. Gov. J.B. Pritzker went even further, tweeting “we are in our strongest financial position in decades.”

All of their celebrations ignore a simple fact. Illinois lawmakers had almost nothing to do with creating the state’s record budget. Revenues are up, deficits are papered over and Illinois’ credit ratings are improved for one reason: the Fed’s unprecedented $200 billion stimulus. The reality is, even after the federal bailout, Illinois remains at the bottom of the barrel nationally.

Here are nine things Gov. Pritzker and most of the media haven’t told you about the 2023 budget and the state’s overall financial position:

1. Illinois still has the nation’s lowest credit rating, by far, even after its two recent upgrades. Only fellow basket-case New Jersey comes close – and it’s two notches better than Illinois.

2. Illinois is far from being in its “strongest financial position in decades.” The state’s credit rating was just two notches below a AAA rating in 2009. Since then, Illinois has been in a credit-rating freefall, dropping eight notches under Gov. Pat Quinn, another 13 under Gov. Bruce Rauner and one under Pritzker. In April 2020, Illinois was just one notch from a junk rating.

The three upgrades under Gov. Pritzker barely change anything. Illinois needs around 20 more upgrades to really get back to the “strongest financial position in decades.”

3. Illinois’ unreformed pension crisis is still the nation’s worst. Illinoisans were burdened with a $313 state pension shortfall in 2020, the nation’s biggest according to Moody’s calculations. 2021’s numbers will be better because of the market’s historic returns last year, but Illinoisans will still be stuck with the country’s worst crisis. Illinois pols have done nothing to reform pensions.

4. Credit the near-$200 billion federal bailout, not Gov. Pritzker’s actions, for Illinois’ “improved” 2023 budget. Illinois’ temporary jump in revenues can be directly attributed to one thing: the nearly $200 billion in federal “COVID” aid distributed to the state, businesses and residents over the past two years. About $130 billion in the hands of individuals and companies helped spike the state’s income and sales tax revenues.

It’s those dollars, plus the billions in direct grants to the state, that have increased the state’s revenue, papered over budget holes, led to a credit upgrade and helped pay down the state’s bills. Not the actions of the governor. 

  1. Gov. Pritzker has only increased the cost of government. There is little to nothing Gov. Pritzker can point to in the past few years that he or the legislature did to reform the state. Mostly, all they’ve done is increase spending. The list below is just a sample of the governor’s work:

6. Lawmakers used the budget process to add supplemental spending to FY 2022, pushing it above $49 billion, the biggest general budget Illinois has ever had. The billions in extra revenues could have been used to help begin the implementation of structural reforms. Instead, lawmakers spent the money on pork projects and tax relief gimmicks.7. The budget’s $1.8 billion in tax “relief”: temporary gimmicks, entirely useless thanks to inflation. The gas tax freeze isn’t tax relief at all. It only suspends a planned 2 cent gas tax increase by six months. The increase in the state’s property tax rebate ($300 per household) will also be negated as local governments raise their property tax levies by the max 5 percent allowed by law this year. And the one-year suspension of Illinois’ 1 percent tax on groceries will be swallowed up by the costs of inflation – the highest in 40 years – in less than a month.

On top of that, lawmakers added another one-time giveaway to residents in the form of a $50 check (plus $100 per child for families) and an increase to the state’s Earned Income Tax Credit. The tax credit change (from 18 percent to 20 percent of the federal EITC) is the only permanent taxpayer relief included in the budget. Even members of the traditional media have recognized what this collection of “relief” really is: vote buying.

8. The budget contains more unnecessary K-12 education spending. The 2023 budget hikes education spending by another $350 million, bringing the total spend to a record $9.8 billion. Illinois spends another near-$6 billion on teacher pensions. What lawmakers won’t tell you is Illinois’ per student spending is already the nation’s 8th-highest. Nor will they mention no other state has increased spending by more over the last decade than Illinois.

9. Lawmakers voted another salary increase for themselves. Never mind their poor performance, state politicians gave themselves a raise of about $2,700 each this year. Illinois lawmakers are already paid the nation’s 6th-highest annual salary, according to compensation data from the National Conference of State Legislatures.

***************

Two words describe the $46.5 billion 2023 budget: Lost Opportunity. Billions in windfall revenues from federal COVID aid and the recent indictment of former speaker Mike Madigan gave lawmakers a unique chance to pass structural pension reforms and real property tax relief. They could have made a real dent in Illinois’ problems. But they didn’t. 

The one-year nature of Illinois’ budgets doesn’t help. What Illinois really needs is a five-year restructuring plan with population and economic growth at the center of its goals. Without such a plan, this state will continue to scrape the bottom of the barrel.

Read more from Wirepoints:

 

Appendix.

Note: The numbers above are from an earlier working copy of the budget provided to Wirepoints and may differ slightly from the final budget passed on Friday, April 8, 2022.

 

12 Comments
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Marina Chudnovsky, M.Ed.
1 year ago

Ted Dabrowski, or Dan Proft, Shaun Thompson or another prominent conservative must run for office in Illinois to save the state and Chicago in particular. Corruption and dysfunction at state level, criminals in office all over the system, attorney general belongs to prison, giveaways to potential democratic voters, failed educational system at all levels from birth to Northwestern University, From City Colleges of Chicago to the University of Chicago, waste, waste and more waste, one stupid criminal decision after another, non-stop violence, destruction, shootings, killings and rape, etc. Should I continue? How long are we going to wait? Until the… Read more »

debtsor
1 year ago

The major obstacle to reform is the legislature. The districts have been so gerrymandered that it is almost structural impossible for Republicans to win. However, 2022 is looking like a red wave unlike anything I’ve seen in my lifetime, possibly bigger than 1994, and maybe Republicans can rent a few seats for two years, and destroy the veto proof majority the legislature has enjoyed for many years.

Rob M
1 year ago
Reply to  debtsor

If they offer the voters honesty, transparency and a path to solvency, they will keep their seats. We had Daniels and Pate Phillip and they did neither, they lost

Rob M
1 year ago

Ted and, or Mark should run for State Rep. Those districts are small enough that a grass roots campaign could get you In. You have all the data. Stand up in the House and recite it on a daily basis. Call press conferences and show charts of waste, patronage, and corruption.

Pensions Paid First
1 year ago
Reply to  Rob M

Do you actually think reciting data on a daily basis gets people elected? The voters don’t care. They like slogans. “Hope and Change” or “Make America Great Again”. That’s about all the average voter can handle.

Rob M
1 year ago

If Ted stood up in the House chambers with flow charts, detailing the tentacles of all the Democrat and Republican leaders and all their relative on the payroll, all, the contracts friends and family have, their contributors and who they steered money to, you don’t th8nk that would make a difference?

Pensions Paid First
1 year ago
Reply to  Rob M

Not one bit. Flow charts? Seriously? Voters are getting exactly what they want.

Admin
1 year ago
Reply to  Rob M

Thanks, but I think we have broader reach here.

Rob M
1 year ago
Reply to  Mark Glennon

Theres no reason you couldn’t do both. State rep is a part time job.There should be no pension. They can buy insurance with their salary

susan
1 year ago

Since we are talking about Gas taxes, let’s look at the Ideal Gas Law: PV=nRT P=pressure. Let’s call that economic pressure. V=volume of gases(human souls) trapped within the volume-defining container which is the State of Illinois. n=moles of gas contained within the measured volume. a Mol=6.02×10 to the 23rd. Note that the number of molecules of gases are numbered in a quantitative manner; however in order to measure ‘weight’ of the gases, a qualitative distinction must be made in terms of molecular weight of the specific type of the gas…and elemental type of gas determines its productivity/destructiveness to other gases… Read more »

Goodgulf Greyteeth
1 year ago

And, yet, the beat goes on. I doubt that Pritzker, nor any of those working around him, spend five minutes a week worrying about a sudden outpouring of public discontent in response to the difference in between something that Pritzker has claimed, and the undeniable reality of what is really occurring. Why not? They’re right. Joe-n-Jane next-door aren’t burning tires in their street, or marching the neighborhood on Springfield (that is to say, Chicago) pitchfork and torch in hand because Governor Tax Cheat told another guileful whopper. In the past, Pritzker’s announced so many oxymoronic claims of victory without a… Read more »

Pat S.
1 year ago

The investment grade chart in #1 should be on the front page of every IL newspaper. That tells the story in terms that can’t be spun.

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