Happy days aren’t here again.
At least that’s what state Comptroller Susana Mendoza is trying to tell the governor and state legislators.
If they ignore her admonition to exercise spending discipline, it wouldn’t be the first time. If they embrace it, however reluctantly, maybe Illinois can take a small step in the direction of fiscal responsibility.
Of course, it’s easier said than done. But hope springs eternal in Mendoza’s heart. She’s urging state officials to approach their impending federal cash windfall with caution.
Here’s the deal: A major portion of President Joe Biden’s $1.9 trillion coronavirus aid package is aimed at bailing out financially failing states like Illinois.
Illinois is expected to receive $7.5 billion — enough to make a substantial dent in the cumulative deficits in Gov. J.B. Pritzker’s budgets since he took office. The question is what to do with all that money. They’ll spend it, of course. But on what? Legislators’ mouths are watering at just the thought of fulfilling their endless wish lists.
But Mendoza, whose office pays the state’s bills, threw a wet blanket on their fantasies.
“Sometimes legislators hear there is new money coming in and get excited about ways to spend it,” she said. “That’s why I’ve been so vocal in warning that, ‘No, that money is spoken for.’”
For example, Illinois owes nearly $2.9 billion to the Federal Reserve. It borrowed the money to pay for spending it couldn’t cover. Then there is the state’s roughly $5.5 billion in unpaid bills.
Taken together, that’s nearly all of the federal windfall.
Needless to say, the castor oil Mendoza is recommending will not go down well with her colleagues in state government. Pritzker agrees that repaying the Federal Reserve is a good move, but he doesn’t want to get carried away with spending restraint.
He talks of the need to spend more to “stimulate the economy” and create more jobs.
But the question is not how much economic stimulus Illinois needs, but how much it needs in the overall context.
With the end of the coronavirus pandemic on the horizon, three rounds of federal stimulus spending in place or on the drawing board and another $5.5 billion in federal money going to Illinois cities and counties, what’s the smarter approach — reducing state debts or just spending more?
All politicians — no matter their party — love spending sprees. But there are bad times to take that route and worse times.
Mendoza recommends repaying the Federal Reserve debt, reducing the pile of unpaid bills by $2 billion and saving the rest for a rainy day.
“There’s no room for new spending. ... Strict spending discipline is in order,” she warns.
Mendoza’s prescription may be unappetizing to the drunken sailors masquerading as legislators in Springfield. But she’s right. Those who ignore her sound advice do so at our beleaguered state’s peril.