By: Mark Glennon*

Gov. JB Pritzker on Tuesday ordered state spending cuts totaling $711 million for the current fiscal year as a “first step” to address the year’s budget hole. Here’s where those cuts will be made:

For some perspective, the total is about 1.7% of the budget.

Do not expect the Pritzker Administration, legislators in either party or us to come up with a simple alternative that solves much. That’s impossible. We say now precisely what we said during the Rauner Administration:

The budget is a sideshow compared to the epic production we need—a multiyear, credible plan that would make Illinois competitive and fiscally stable again…. A credible five- or seven-year plan would have to be drastic and comprehensive. It would have to encompass local fiscal issues because our crisis is consolidated and driven heavily by formulas that share funding…. Beyond that, pretty much every reform ever proposed, implemented as quickly as possible, would have to be included in a credible plan. A credible five- or seven-year plan would have to be enough to cause many to say, “OK, I can stick it out through that.”

No such attempt has ever even been discussed. Instead, Illinois chose incrementalism – short-term patches – instead of major structural reforms, so now the crisis has deepened.

And incrementalism, once again, appears to be in the cards.

That said, here are a few specific thoughts on Pritzker’s cuts and on some of the reaction thereto:

  • $711 million is indeed a first step, even for the current budget.

The administration estimates the current budget gap at $3.9 billion, but the reality depends heavily on how quickly the economy revives and on hoped-for federal assistance. The five-year budget forecast shows shortfalls growing to $4.2 billion even while unpaid bills grow to $33 billion.

But that’s just about the cash budget which – we can’t say this often enough – does not include growing debts, which is the real problem. Biggest among those growing debts are unfunded pension liabilities.

  • The budget line items to be cut seem almost deliberately selected to evoke sympathy and opposition, and therefore are likely to change.

Human services are at the top of the list with the biggest cuts, yet those probably enjoy the most public support – for good reason. Maybe that’s an effort make to tax increases more palatable, which are likely to be added to the mix. If that suspicion is right, priorities may change as additional measures are negotiated.

  • A better approach, in general, would include across the board pay cuts.

Painful as those are, that’s what it takes to live to fight another day.

  • New taxes undoubtedly will be added to the mix, but they will backfire.

Our view is that any new taxes might raise additional revenue initially, but in the longer term they will accelerate flight of people and employers from the state, further impairing the tax base and reducing all revenue forms. Only a credible, long-term plan will reverse that.

That requires an amendment to the state’s constitutional pension protection clause, but savings could begin now.

  • The blame game has worn thin, destroying the credibility of those who play it.

Pritzker, as usual, blamed Rauner. While announcing the budget cuts, he said, “I promised to be a governor who balances the budget and begins paying down the bills that my predecessor left behind.” But Rauner, too, inherited a disaster, as did Pat Quinn before him. Illinoisans know that and are tired of the finger-pointing.

And on the pending federal relief bill, Chicago Mayor Lori Lightfoot resorted to her usual insults, blaming the holdup on Republicans, as have Pritzker and other Illinois Democrats. “If we give in to the heartless [Republican Senate Majority Leader] Mitch McConnell on so many issues, where is the floor?” asked Lightfoot on Tuesday. “Because what it says is, if Mitch McConnell draws the line — no matter how unreasonable — we are gonna capitulate to that heartless man who has done so much harm to this country,” she said.

For a better account about why the federal aid package has languished, see left-leaning Matt Taibbi’s outstanding column here.

  • No real progress will be made until Illinois stands up to public unions.

Reacting to Pritzker’s announcement, Roberta Lynch, Executive Director of AFSCME Council 31, issued a statement saying this: “AFSCME is firmly opposed to any demands that unfairly target state employees. We are, however, fully committed to revenue measures needed to keep Illinois working.”

In other words, expect nothing from her union’s members. Just raise taxes.

She made the astonishing claim that “it is grossly unjust to suggest that frontline state employees who have already sacrificed so much in our current public health crisis should bear an outsized share of the burden of fixing the state’s fiscal crisis as well.” She added that, “rather than asking everyone to pay their fair share, state employees—hard-working middle-income taxpaying Illinoisans—are now being asked to shoulder a bigger share of the budget burden. That is simply not acceptable.”

No, Ms. Lynch, state employees have faced no cuts and received full pension accruals, even those who have not been working during the pandemic. There has been no shared sacrifice whatsoever.

Lynch went on to blame the budget problems on defeat of the progressive tax amendment. Though Illinois voters saw through the math on that, Pritzker made the same claim, saying, “I want to be clear. Because tax fairness was taken off the table there will be a real human impact here.”

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

How the rest of the process will play out is unknowable, but it will be long and painful. Budget cuts and structural reforms have long been inevitable for Illinois. But the same powers and interests that crippled the state hold the scalpel. Their blame games and incrementalism will continue until they are forced to stop.

*Mark Glennon is founder of Wirepoints.

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Wolfnight
27 days ago

I am so glad my dear late and great father instilled in me to fend for myself and NEVER EVER be dependent on Government, or work for them. You see I do not have to deal with this crap. OK I object to what is going on and can take a stand in how I vote, but bottom line I am far better off, not financially but spiritually and how I live my life. My legacy is my family tree right? I have been at work in the private sector for over 40 years; always paid my way and fortunate… Read more »

Last edited 27 days ago by Wolfnight
debtsor
27 days ago
Reply to  Wolfnight

“I am so glad my dear late and great father instilled in me to fend for myself and NEVER EVER be dependent on Government, or work for them.” This used to be a civic virtue instilled from generation to generation, from parents to children, and so on. But with the breakdown of the family, the hollowing out of the middle class, and generous government benefits to replace the loss of a patriarchal income, we now have entire classes of people who now believe that the government’s sole purpose is to make people dependent. The middle class hollowed out, and some… Read more »

Last edited 27 days ago by debtsor
Wolfnight
26 days ago
Reply to  debtsor

Completely agree, “we now have entire classes of people who now believe that the government’s sole purpose is to make people dependent” says it all really. More takers than makers….. period. As for me, like I said I do not give a crap because I remain a maker come hell or high water. The grifters will never win with me. And, I am also a qualified soccer coach teaching 5-15 year olds for 35+ years, and I still do this for my church and in my local parks. Stuff them all. And btw, a smarter man recently told me, the… Read more »

28 days ago

They need to cut the salaries of high priced administrators in the state.
At UIC you have a Chancellor who makes 600k and a President who takes home 800k a year, thats about 60k and 80k a month respectivley. more than what most people make in a year.

BTW can anyone tell me the difference between what a Chancellor and President do??

Ex Illini
27 days ago
Reply to  3536Truth

The Chancellor works MWF and the President works Tues/Thurs.

Lawrence Olewinski
28 days ago

The pressure on the Government is moving heavily in the right direction. Actually, at this point it cannot stop. I agree that the right solution will take 7-8 years. Rip off the bandage a let’s get on with it. Otherwise it just a continuation of “Illinois Reindeer Games”…..Merry Christmas!

Cynthia Kempfer
28 days ago

Where is the money from marijuana sales

The Truth Hurts
28 days ago

It’s $100-130 million or about 0.3% of the Illinois budget. A rounding error on $43 Billion.

Riverbender
28 days ago

I am going to add…where is the money now collected on online sales going?

29 days ago

Prohibit union funding of all political issues and candidates until Union pensions are 100% funded.

Strelnikov
29 days ago

I disagree that it will belong and painful. A crisis will be reached suddenly and immediate collapse will follow.

That’s the way you go bankrupt: Gradually, then suddenly.

Ex Illini
27 days ago
Reply to  Strelnikov

In the Private sector yes, but States can’t even declare bankruptcy right now. Illinois has been dying for the last 25 years, and it has at least 10 more before the roof caves in.

nixit
29 days ago

AFSCME Roberta cracks me up. “We are, however, fully committed to revenue measures” Of course you are, dear, because any layoffs means less dues paying members. She’s only concerned about the union’s bottom line. Let’s see if she offers to lower union dues if there are any salary concessions.

“Because tax fairness was taken off the table there will be a real human impact here.” AFSCME has never been interested in tax “fairness”, only more. They’ve backed every flat tax hike ever presented.

Philip Sheridan
29 days ago

This $700mln cut is the equivalent to throwing a chair off of the sinking Titanic.

Goodgulf Greyteeth
29 days ago

Well, I suppose the truth of it is that year after year, election after election, Illinois voters have got exactly the bankruptcy of finances and governance they should have expected from the folks that the majority of those who bothered to vote voted for. Turnout in the 2018 election was 56% – about half of us didn’t even bother to vote. 54% of those that did voted for Governor Tax Cheat. I haven’t read anything anywhere from anyone who claims to have voted for Pritzker, and who is now upset about what JB’s doing. I also suspect that I’ve read,… Read more »

Last edited 29 days ago by Goodgulf Greyteeth
that guy
29 days ago

Anyone else think IL will become the first state to be owned by a PE firm?

Dale
29 days ago

I have a local pension. I questioned the sustainability of the increases to the pension plans when they were proposed and while I feel I have a right to what I was promised in exchange for my service, I also acknowledge there needs to be changes and reform. Many of my friends acknowledge the same. The big issue/problem I have, is accepting cut(s) to my pension, but the politicians continue with business and CORRUPTION as usual statewide. And that is NOT going to change in this state!

s and p 500
29 days ago
Reply to  Mark Glennon

On you-tube (“Public pension timebomb, mayor of Costa Mesa” the former mayor says that new tax revenues will only pay for pension bills of current retirees. And that’s in a rich city in Orange County .

NB-Chicago
30 days ago

In terms of illions looken for a fed bailout, there’s quite a few articales out in the past couple days stating that state tax revenues shortages due to covid are far less severe than previously estimated..ie most state are doing just fine with no further stimulus. It’s just Illinois that’s a basket case. https://www.msn.com/en-us/news/markets/state-and-local-tax-revenues-better-than-expected/ar-BB1bXqsp

NB-Chicago
30 days ago
Reply to  NB-Chicago

Some more articales, even in lib bloomberg. Rich States Uncover Tax Windfall, Undercutting Push for More Aid [“https://www.bloomberg.com/news/articles/2020-12-15/rich-states-uncover-tax-windfall-undercutting-push-for-more-aid”]            https://www.cato.org/blog/state-local-budgets-are-not-crisis

s and p 500
30 days ago

This is like the Disney movie “Christopher Robin”, where Christopher is now an adult working post-war for a luggage company. The company is going through hard times so he has to make cuts. He tells the Board he came up with ways to cut 2% from the budget and the boss says–“No, you have to cut 20%”. Incidentally, are the Dems really going to make Puerto Rico a state? Won’t that mean states can now file for bankruptcy?

Freddy
30 days ago

Even if you could chip away $711M per MONTH it would take over 35 years to pay down the estimated $300B including healthcare.

Mike
30 days ago

Here is another episode from The Illinois Way, relevant to this article since the state sends various types of funding to local school districts. In many school districts in Illinois, teachers and administrators receive a 6% salary hike in each of their last 4 years of employment. If the salary hike goes above 6%, the school district pays a penalty to the TRS pension fund. That perk was cut to 3% on June 4, 2018 under Madigan / Cullerton / Rauner when HB 3342 was signed into law as PA 100-0587. JB Pritzker assumed office on January 14, 2019. The… Read more »

David F
30 days ago

Doesn’t take a constitutional amendment to AT LEAST start new workers with a 401K versus a pension. (not that we don’t need that too)
How about more taxes on the poor JB seems to be good with that, perhaps another doubling of the gas tax for us smucks who actually have to go to work and not stay home like state workers getting paid.
How about a service charge on all retirement income that is distributed to out of state retired. Time to contribute back to the state that’s giving you the insane retirement.

Mike
30 days ago
Reply to  David F

The state does not like the 401K option because it diverts money from the pension Ponzi scheme. A few of the several reasons a teacher shortage exists in some teaching areas (special education, bi-lingual, etc.) in some school districts (in particular rural) is some potential teachers don’t want to contribute to a Ponzi scheme, and others that are contemplating a teacher career later in life find the pensions a drawback for a variety of reasons (they are a Ponzi scheme, don’t want already acccumulated Social Security benefits reduced, etc.). The requirement of most public sector employees (SURS is a notable… Read more »

Last edited 30 days ago by Mike
Eugene from a payphone
30 days ago

Budget shortfall plus unpaid bills to exceed 37 billion in 5 years. One billion is 1,000 million. It gets so confusing. I just think of it it terms of the Governor holding the multi-colored sugar sprinkles on his next 2 gallon sundae and thinking he is dieting!

Ex Illini
30 days ago

JB will try to use this exercise to punish the voters for having dared to cross him and his gigantic brain. The dictator who has grown accustomed to ruling with an iron fist will show those ungrateful peons that they shall not question his methods!

Tom Paine's Ghost
30 days ago

1.7% of a budget cut is a start. how about next step is to eliminate and lay off 50% of state government workers. I am certain that Illinois citizens will not see any change in Illinois State Government services.

Thee Jabroni
30 days ago

Lol!!!!

Thee Jabroni
30 days ago

Did i read that correctly?-Roberta Lynch really said the frontline state workers have sacrificed so much already-huh!?-seriously?-can someone please tell me what sacrifice they have made-many of them arent even working,havent worked for a while,and are still getting paid-please tell me that was a typo!-omg!!!!

Governor of Alderaan
30 days ago
Reply to  Thee Jabroni

The lazy, overpaid, underworked parasites have earned a massive cut in pay for declaring themselves to be nonessential, if not worthless

Roger Konarski
30 days ago
Reply to  Thee Jabroni

Toll Booth collectors have not worked since last March – better yet eliminate those positions – replace them with machines that offer payment options. Like in Indiana

NB-Chicago
30 days ago
Reply to  Thee Jabroni

Who in the world gets to “negotiate” their layoffs??

Thee Jabroni
29 days ago
Reply to  NB-Chicago

Excuse me but a “layoff” means no pay,these sacrificial “frontline state workers” are NOT layed off,they dont have to go to work because of “covid”-this isnt a layoff dude-learn your facts!!

Mike
29 days ago
Reply to  NB-Chicago

Public sector labor law in Illinois is an HR specialty area.

Illinois Public Labor Relations Act (IPLRA) and the Illinois Labor Relations Board (ILRB) for most public sector workers.

Public safety (fire / police) has its own set of rules.

https://www2.illinois.gov/ilrb

Illinois Educational Labor Relations Acct (IELRA) and the Illinois Educational Labor Relations Board (IELRB) for educational employees.

https://www2.illinois.gov/sites/elrb/Pages/default.aspx

Mailee Smith of the Illinois Policy Institute has written some articles about the topic.

Private sector union employees fall under a different set of rules.

M.H. Deal
30 days ago

You can put in as many long term, multi-year plans as you desire. Since their execution overlaps electoral years, good luck making them stick. The air will always be rent by cries from whosever ox has been and is being gored. Chicago and Illinois on the way to the slaughterhouse.

LessonLearned
30 days ago

This is yet another Wirepoint article that reinforces my decision to leave Illinois. I can’t risk my families future in this state. I’m surprised so many of you are willing to bet the long shot and stay.

Juicy Smollier
30 days ago
Reply to  LessonLearned

They aren’t. They are humans, who hate change and are inertia driven until REAL pain hits. It hasn’t.

Lorretta Williams
30 days ago
Reply to  LessonLearned

We moved out of Illinois over a year ago to NE Arkansas. Best move we ever did !!!

30 days ago

Rearranging the deck chairs on the Titanic

Governor of Alderaan
30 days ago

Leave it to greedy, ineffective, inefficient Big Government to maximize disruption with cuts. Private sector cuts minimize the effects of cuts on those who consume their goods and services

Riverbender
30 days ago

The private sector has and is continuing to cut costs day by day helped by the various new technology introductions to the business world. One might think then that the State should be cutting costs just as a normal day to day operation. That appears to not be how the game is played in Illinois with an expanding government that continues to spend recklessly and somehow thinks that a balanced budget includes funds from borrowing on the revenue side of the equation. Naturally the State is hoping for a Federal bailout considering the results of the national election but I… Read more »

Governor of Alderaan
30 days ago
Reply to  Riverbender

The private sector is continuing to do more with less, but greedy inefficient Big Government can only do less with more

30 days ago

The private sector needs to move all operations they can out of state immediately. The tax bill from Sleepy Joe, combined with the fee increases, permit increases, taxes from Pritzker and Lightfoot will be arduous to deal with. If I am a Chicago or Illinois based company, and I am NOT talking about moving in my Strategic Planning Committee movies and gaming out all the costs, it is malfeasance on the part of management and compromising shareholders.

Susan
30 days ago

Rulers who benefit from status quo argue that it is the law, and as such it represents the will of the people. These arguments were made in the past by corrupt politicians such as those who took over Bell California and awarded themselves obscene salaries and pensions, also George Wallace defending segregation in Alabama. Why try to convince corrupt rulers to change their practices, when those practices have been so lucrative for them? Better to look for solutions which bypass the traditional corrupted ruling class. Best to utilize statutes and case law which have been crafted by these same corrupt… Read more »

John
30 days ago

The math simply doesn’t work. The pensions are doomed. People will continue to flee Illinois at a higher and higher rate as things stand now. There is no REALISTIC way to tax or cut out of this anymore, period. Mark, the fact is you and Ted and everyone else who knows Illinois needs fixed need to go after the public unions, and educate the public why the public unions are the main problem. They control state government. They control Madigan and J.B. They are greedy beyond belief and refuse any meaningful changes, but in doing so they doom themselves in… Read more »

Last edited 30 days ago by John
Fed up
30 days ago
Reply to  John

Math always wins in the end.

Governor of Alderaan
30 days ago
Reply to  John

You’re forgetting that math is racist, a white supremacist tool of the ruling capitalist class to impose slavery and colonial Western hegemony on indigenous peoples

Last edited 30 days ago by Governor of Alderaan
Juicy Smollier
30 days ago
Reply to  John

Their pensions will collapse with the next downturn in the economy. I figure they have about 15 months. The funny thing is that we might have a record year in 2021 … exuberance … then a big fall.

John
30 days ago
Reply to  Juicy Smollier

I could see that, for sure.