Unbeknownst to him, President Joe Biden is chief architect of Illinois’ 2021-22 budget.
What a difference an $8.1 billion federal bailout on top of an unanticipated state revenue increase of an estimated $2 billion makes.
That’s why Illinois legislators — without breaking a sweat — were able to pass a $42.3 billion budget for the fiscal year that begins July 1. They’re also estimating a surplus of $100 million, even though past predicted surpluses in state budgets have been figments of creative budgeteers’ imaginations.
With Democrats holding supermajorities in the House and Senate, it’s no surprise they passed the spending package in a way that suited them. It was equally unsurprising that Republicans voted no after being presented with the 1,000-page spending package just a few hours before it was put to a vote.
Both parties, however, can take solace that the state was able to meet its commitment to increase K-12 public education funding by $350 million.
Highlights of the budget package include the repayment of debt to the federal government and avoiding reductions of revenue intended to support local governments.
Depending on how one looks at it, Gov. J.B. Pritzker succeeded in raising an additional $600 million in business revenue. He contended that they were corporate loopholes, although he didn’t call them corporate loopholes when he negotiated them a few years ago with Republican Leader Jim Durkin.
Not all of the governor’s targeted “corporate loopholes” were repealed. The Invest in Kids K-12 private school scholarship program for low-income families remains in place.
The question now is what the future holds. The federal bailout money isn’t going to last forever. Of the $8.1 billion, the budget calls for spending
$2.5 billion, leaving the rest for ... what?
Republicans want to use the money to fill a $5 billion hole in the state’s unemployment trust fund. Democrats don’t appear to be enthused about that.
Illinois has so many financial problems that the balance of the bailout money could go any number of places.
But there’s one problem that bailout and extra revenue could not hide.
An estimated 30 percent of the budget is intended for the state’s five public pension funds — teachers, judges, state employees, university employees and legislators.
Pension costs continue to take bigger and bigger bites out of the state budget even as the pension funds’ unfunded liabilities continue to grow.
This, of course, is not sustainable because spending on pensions is crowding out money needed for core state programs, like education, law enforcement and social services.
Unfortunately, legislators have proven over the years that the pensions problem is easily ignorable, and ignore it again they did this year.
The 2021-22 budget process was shaping up as a monumental political and policy disaster in January. So President Joe Biden’s bailout couldn’t have come at a better time for Pritzker. His public prayers were literally answered by the cash infusion.
But absent extraordinary state revenue increases, Illinois will be facing the same old financial problems when the federal spigot runs dry.
Indeed, Durkin warned that the 2021-22 budget will contribute to that serious problem because it authorizes billions of additional money to be spent.
That’s a source of great concern. But so is the entire budget process.
It may serve the needs of individual power brokers to drop a $42 billion spending plan on individual legislators one minute and then calling for a vote in the next. But that’s the antithesis of an informed and deliberative process, one that raises public concern about the seriousness of the entire business.