By: John Klingner
No matter what budget politicians might pass this time, it’s going to be a sham.
Some lawmakers will inevitably call it “balanced.” Others will call it a fitting end to a successful legislative session. And yet others will say that this is how a budget is done – in contrast to the antagonistic, no-budget years of Gov. Rauner.
Illinoisans shouldn’t be fooled by that rhetoric. Passing yet another budget with more spending, more deficits and no reforms is not an accomplishment.
Illinois finances are still a mess. The state is still one notch away from a junk rating. And Illinois’ worst-in-the nation retirement crisis still imposes $75,000 in debt on every household outside of Chicago and $145,000 on every household in Chicago.
The reality is the budget won’t be close to being balanced. No matter what accounting tricks lawmakers use – and no matter how much in surprise revenue they include – the state will still be stuck with at least $10 billion in structural deficits. That’s a quarter of the current budget.
That $10 billion represents the additional amount of money Illinois should be paying for the true costs of pensions and retiree health insurance, plus the cost of annual overspending and unpaid bills.
The budget they pass will likely include about $8 billion for pensions, which is based on the state’s broken funding ramp and unrealistic investment assumptions.
That’s far short of the $13 billion-plus the state really needs to pay for pensions in the absence of reforms. Wirepoints calculated Illinois’ true yearly pension costs based on equal annual payments, 100 percent funding by 2045 and more realistic investment assumptions (See Exhibit 1). Paying the true cost of pensions would add $5 billion to the budget deficit.
And properly paying for retiree health insurance would add another $3 billion to the deficit. Right now lawmakers only contribute about $1 billion to retiree health, the minimum pay-as-you-go amount. The state’s actuaries say the actuarial amount needed is closer to $4 billion (See Exhibit 2).
Then there is another $2 billion in deficits to account for structural overspending and the cost of paying down a part of the state’s billions in unpaid bills.
In all, that’s a structural deficit of $10 billion that politicians will ignore when they “balance” the budget.
And that deficit is the best-case scenario for Illinoisans. Pritzker has promised to spend much more than his first budget proposes.
It looks like the budget is going to be passed at the last second, as usual. That means no transparency for taxpayers and no time for lawmakers to actually read what they’re voting for.
In other words, nobody will know the true damage until it’s too late.
Read more about why the state’s annual budgets don’t matter:
- Why Warren Buffett is right to warn about Illinois: The state’s true retirement costs now total 50% of annual budget
- Why some Illinois Republicans are making the wrong argument against a progressive income tax
- Illinois’ crisis: 20 facts Pritzker doesn’t want ordinary Illinoisans to know
- If a decline in births is a problem nationally, it’s a full-on crisis in Illinois
- Every Illinoisan Must See These Two Charts In The Wall Street Journal
Exhibit 1
Exhibit 2
Hopefully, all media will get the message, in Illinois, too.
Ted joined Tom Miller of WJPF to talk about Illinois’ highest-in-the-nation property taxes, why lawmakers don’t want to touch the tax’s cost drivers, just how much Illinoisans’ tax burden has grown over the decades, why Gov. Pritzker failed to meet his promise to reform property taxes, and more.
Ted joined Dan and Amy to talk about the free speech controversy brewing in Wilmette due to the city’s refusal to fly a religious freedom flag, the city’s left-wing excesses and the growing culture war, the latest money spent on the illegal immigrant crisis, and more.
Weekly crime statistics from the Chicago Police Department: Report through 4/14/2024.
Terrific work John!
Search “balanced budget” Illinois for news and you’ll see the long list of reporters, Dems and Republicans alike calling this a balanced budget. Shame on all of them for perpetuating the state’s worst myth.
When the remaining Republicans sound similar to the Dems, it’s “game over” in Illinois. There is no realistic means to fight back.
It’s a Ponzi scheme, each new generation is a fresh batch of Ponzi’s. The baby boomers not so much, as we retire our state taxes go away completely because we are more privileged and better than those under 60. Also our property taxes get reduced at 65. All you ponzi’s under 60, good luck, here’s the bill.
When 50% of the citizens have a plan to leave they just don’t care…revolt or bolt is clearly bolt. You are correct. It took us almost 6 years of planning to find our way out of Illinois. 3 incomes, 3 income tax bills, 2 property tax bills and all the other taxes…gone.
Ted, in reality arent they just passing a shell bill for now and fill in the detail as they go. And the press opinion writers are silent after all the years they ripped rauner budgets? Plus, per tia, they still havent released the financials from 2018/17.
The Democratic voters don’t care. They’re a different breed. The term Low Information Voter applies quite accurately. When was the last time an incumbent Democrat anywhere in the United States (except for AOC who is an outlier) lost their primary? I can’t think of any offhand; while we know R’s primary out their incumbents frequently, i.e. think something like Eric Cantor who was replaced by a Tea Party (and lost his seat last year to the Hate Trump 2018 Blue Wave). Even Rauner faced a tough battle vs Ives and just barely won. That rarely if ever happens in D’s… Read more »
Ted, maybe i don’t know what im talking about when i called bill –‘shell bill’. From a wttw articale from yesterday, they state overall Budget Bill-262 is only an outline budget and is supported by Implementation Bill-1814 and Revenue Bill–689. Are all three bills only outline/shell bills at this point? Sure you guys are worken ot trying to figue it all out.
… and the liberal media won’t hold the Illinois leaders accountable or explain to the public the full scope of the coming disaster.
Nope. And most of the populous will just look at you like you’re crazy, still believing that if they didn’t hear it on the news, it must not have happened. Huxley was right.
They hate Trump so they show up to the polls to vote for Democrats, over and over again. The middle class suburban women in my office all hate Trump and some of them – who likely never voted in their entire lives – showed up in 2018 to vote straight ticket Democrat. They haven’t followed the politics of IL for even a moment since and likely don’t care.
As middle class suburban female, I love trump.
You’re a diamond in the rough! Most suburban Chicago woman hate him, or at least the ones who love him didn’t show up to the Polls in November 2018, and the state has been in a downward spiral since.