Included among the orgy of self-congratulations last week by Illinois’ elected officials was the familiar claim that the new $42.3 billion state budget taking effect July 1 is not only balanced but also has a small surplus.
Illinois politicians — Republicans and Democrats — have been saying that since 2001, the last year the Legislature actually passed a budget balanced both on paper and in reality.
That was during the tenure of former Gov. George Ryan.
Gov. J.B. Pritzker bragged that “for the third straight year, I’ll sign into law another balanced budget for Illinois that demonstrates fiscal responsibility works with a progressive vision of governance.”
What does Pritzker mean when he uses the word “balanced” before the word “budget”?
Is his approach akin to former President Bill Clinton’s famous comment, “It depends on what the definition of the word ‘is’ is.”
Does he define a “balanced budget” as one that spends more money than it takes in? Traditionally, that means unbalanced.
If he actually understands a balanced budget as one with matching revenues and expenditures, then he’s engaging in the time-honored political tactic of pulling taxpayers’ legs.
At least that’s what the number crunchers who follow budget details contend — they aren’t buying a word of Pritzker’s balanced budget shtick.
“While Governor Pritzker is publicly claiming that the budget is balanced and fully funds the pensions, he cannot make this claim in the state’s bond offerings,” said Sheila Weinberg, chief executive officer of the financial watchdog group Truth in Accounting.
“The SEC considers such statements fraud and charged Illinois with securities fraud in 2013 for misleading investors,” she said.
“Despite billions in excess federal pandemic relief, this budget once again isn’t remotely close to being balanced,” said Wirepoints financial analyst Mark Glennon. “As always, they stuck the losses into growing debt — unfunded pension liabilities and the unemployment insurance fund. The federal bailout will end and Illinois will be worse off than before.”
Adam Schuster, budget director for the Illinois Policy Institute, noted that Pritzker and others maintain that they balanced the budget without raising taxes.
“But that doesn’t make (it) true,” he said. “A closer examination shows a $482 million budget hole. ... The budget also contains a $655 million (business) tax hike.”
Wirepoints points out that if Illinois had made actuarially, rather than statutory, required contributions to its five pension funds and retiree health insurance, it would have cost an additional $6.1 billion. That sum now will be added to the already massive underfunding deficit for pensions and retiree health insurance.
(The state’s official pension shortfall estimated is $144 billion as of June 30, 2020, while Moody’s estimated
$317 billion for the same valuation date. The retiree health insurance shortfall is $56 billion.)
The numbers could have been worse.
Legislators boosted the state’s spending with $2.5 billion in federal bailout money. The remainder of the $8.1 bil-
lion federal package remains unallocated.
Illinois, theoretically, operates under a balanced-budget constitutional mandate. But that, too, is illusory.
The Illinois Constitution states “appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.”
Estimates can vary. That’s why budgets balanced on paper at the beginning of the fiscal year may not balance in reality at the end.
But there’s an easier, common-sense way to determine if Illinois’ budgets have been balanced for the past two decades.
Ask yourself a few simple questions.
Why does the state’s overall debt keep increasing?
Why did Pritzker try so desperately to gain billions of dollars more in revenue by passing a progressive-income-tax amendment to the Illinois Constitution?
Why was Illinois the only state in the union to borrow $2 billion — since repaid — from a special Federal Reserve established to assist financially troubled states?
The answer is because the phony rhetoric about balanced budgets et al. is camouflage intended to keep the public in the dark about Illinois’ woeful financial status.
Jim Dey, a member of The News-Gazette staff, can be reached by email at firstname.lastname@example.org or by phone at 217-393-8251.