Illinois plays pretend — if it was going to reduce spending, what spending would it reduce?
It’s impossible to say what the future holds, but Illinois Gov. J.B. Pritzker is asking his department heads to be ready to get by with less money.
Last week, Deputy Gov. Dan Hynes and Budget Director Alexis Sturm issued a directive that, among other things, ordered department heads to find “operational efficiencies” that would total 6.5 percent of their current budget.
The pair said that it’s necessary to prepare for worst-case financial scenarios beause “Illinois continues to face significant financial challenges.”
“... The state’s backlog of unpaid general funds bills that were left behind by the previous administration remained in excess of $7 billion as of June 30, 2019, and the extensive bill payment delays continue to strain the state’s network of providers and translate into millions of dollars of unnecessary interest costs,” they said.
Actually, it’s worse than that, because the state borrowed about $6 billion so it could pay part of its unpaid bills. The money that was borrowed is now reflected by the state’s bonded indebtedness.
The Hynes/Sturm memo attributes the unpaid bills to those left over by former Gov. Bruce Rauner. But let’s all remember that the level of unpaid bills stood at $6.8 billion when Rauner took office in January 2015.
Nonetheless, there’s no harm in the current administration being prepared for financial problems that may or may not occur.
In addition to directing underlings to oversee cuts of 6.5 percent, they asked them to:
— “Conduct a review of boards and commissions within your agency’s purview and propose elimination of statutorily created boards and commissions that would lead to a 10 percent reduction of them.”
— “Identify at least two significant efficiency and savings ideas for consideration in the fiscal year 2021 budget. Ideas could include (but are not limited to) items such as elimination or consolidation of duplicative programs, reduction in funding for under-utilized or inefficient services or improvements in service delivery that streamline costs.”
Hynes and Sturm said, “Agency directors should be prepared to implement any ideas submitted in the fiscal year 2021 budget requests.”
Other than to state that it’s effective management to be prepared come what may, it’s hard to know what to make of Pritzker’s proposals.
Frankly, the governor has shown zero interest in holding the spending line in the face of the state’s dire financial status. In fact, he seems to have a spending plan for any and every issue, to be supported with higher taxes across the board.
Pritzker’s idea of holding the line earlier this year was to skip $800 million in pension payments, a move that would have had a disastrous long-term impact. That horrendous outcome was averted when the state received $1.5 billion in unexpected revenue thanks to a strong national economy.
Democrats have been speculating in recent weeks about the possibility of the economy falling back from recovery into recession and its adverse impact on President Donald Trump’s re-election bid in 2020.
But Democrats, at least those in Illinois, might want to reconsider what they wish for because a deteriorating economy would have a devastating impact on a financially distressed state like Illinois. For starters, a recession would reduce revenue at all levels of government.
Further, Illinois has no financial cushion — a rainy day fund — to fall back on, only a huge pile of unpaid bills.
In addition to preparation, however, talk of reductions gives the governor a selling point as he continues to campaign for his progressive tax hike amendment to the Illinois Constitution. He wants to do away with the current constitutionally mandate flat tax (it now stands at 4.95 percent) and replace it with one that allows the governor and legislators to set rising levels of taxation on rising levels of income.
“Pritzker was criticized last February for not proposing any significant cuts during his budget address. So, he’s apparently looking for some splashy savings that he can highlight next year,” noted CapitolFax political analyst Rich Miller.
Given that reality, Pritzker is laying the foundation either for financial trouble or a winning tax amendment campaign. From his perspective, both make a lot of sense.