Illinois Budget: Even With Cuts, Deficit Will Still Grow $5 Billion, Watchdog Group Says

A new report released Monday by the Civic Federation says that, even though the state has made some serious cutbacks and increased its income tax rate, it will still face a shortage of about $8.3 billion by the fiscal year's end next June.

According to an AP report, Illinois will likely be left with $5.5 billion in unpaid bills and $2.8 billion in backlogged Medicaid, employee health insurance bills and business tax refund payments by mid-next year, according to the report. The nonpartisan watchdog group's findings can be viewed in their entirety here [PDF].

In a statement announcing the report, Laurence Msall, Civic Federation president, described the state's recent budget process as "somewhat improved" over recent years, as the annual gap between revenue and expenses was significantly reduced -- from $3.9 billion to $454 million. Still, that news comes with an important caveat -- that "the State's finances have not been fixed," according to Msall. The state's pension obligations are particularly daunting.

"This budget plainly demonstrates the need for further pension reform by the State of Illinois," Msall said. "Neither dramatic increases in revenue nor painful cuts to appropriations were enough to offset the increased costs imposed on the State by its underfunded pensions."

Responding to the report, Illinois Governor Pat Quinn (D)'s budget spokeswoman Kelly Kraft said the state is working to address its budgetary crisis through pension and Medicaid reforms, according to the Chicago Tribune. Kraft admitted, however, that more work lies ahead in that arena.

Quinn's plan to address the state's budget deficit by borrowing cash to help pay down its debt and address its overdue bills has been consistently trashed by the state's Republican leadership. As of mid-August, Comptroller Judy Baar Topinka said her office was facing 190,000 outstanding bills totaling almost $4 billion. Topinka and other Republicans have called for additional cuts to the state budget beyond the cuts the governor has already made.

In early September, Quinn responded by admitting that thousands of state employee layoffs and several facility closures were coming down the pike. In July, he canceled about $75 million worth of raises for 30,000 state workers.

Comments

[mcartri]

11:49 PM on 09/26/2011

Illinois is in trouble for the same reason all the states are...lost jobs. With the GOP dedicated to defeating Obama over all else, by tanking the economy and refusing to increase tax rates to what they were under Clinton, the states lack sufficient revenue to get out of their economic holes. Vote the job killers out. Save the middle class before it becomes extinct.

[BlueBird55]

07:47 AM on 09/27/2011

It also doesn't help our state that we only get back $.73 for every $1 we send to the federal government, with those red welfare states (mostly in the south) taking from us and other blue states. That's 25% of our money going to other states. That could go a long way to helping ease some of the burden here.

[polishparalt]

08:01 AM on 09/27/2011

Quinn is a disaster for Illinois. He and the General Assembly increased the State income tax with the result that businesses and people are fleeing the State in droves. He and Blago engineered the pension raids to fund Illinois All Kids Care. The application for that program bends over backwards for Illegals and their families, but if your a U.S. citizen or legal immigrant....God help you, cause Illinois won't! Having lived here all my life, I've seen just how messed up politics are here. How does a Todd Stroger merit a $140,000 a year pension for life after just one term as President of the Cook Co. board? Meanwhile the Springfield elite want to strip the downstate teachers, cops and firefighters pensions, and blame us for the mess the State is in? There's the "Chicago Way" and its little brother the "Springfield Way" and the rest of the common folk here in the State get it right in the back from them....Illinois, the only State in the Union where our Governors are not on the licence plates, they make 'em.....and that says it all!

[Aldyth]

08:42 AM on 09/27/2011

I agree that Quinn is a disaster. However, Brady would have been just as bad. Maybe when Lisa Madigan runs in 2016, we'll have someone competent to vote for.

[BAM47]

08:47 AM on 09/27/2011

Those businesses fleeing in droves left during the Bush years, when they were given tax breaks for relocating their businesses in India and China. They haven't left because of the tax increase, they were already gone by the time it was instituted. I just don't understand that businesses want to sell to the US consumer, the world's best consumer, yet they don't realize that if they put that consumer out of work, he is no longer a consumer.

[PalaceOfWisdom]

10:22 PM on 09/26/2011

Illinois only gets back about 75 cents for every dollar we send to Washington, and a massive amount of our money is being wasted on endless wars and corporate welfare. If we don't get our house in order at the federal level, it won't matter what the state does. We are subsidizing red states so they can get away with paying lousy wages and withstand the resulting low tax revenues.

Pensions have absolutely nothing to do with our problems. Those shortages took decades to accumulate and everyone willingly ignored it. Blaming the pensions just because it's the only place the law would allow shortfalls to be concealed is arbitrary. There's nothing here a healthy national economy wouldn't fix, but those empowered to get it going would rather slay the remaining middle class.

[corwin]

12:02 AM on 09/27/2011

1) Your state budget shortfalls are not a function of monies sent to Washington
2) There's no link,so I don't know the validity of your info
3)Almost every state 'sends' money to Wash.It's called income tax.Do you think the Federal Gov't.Armed Services,and the ever growing financing of the Nat'l Debt runs on 'Pixie Dust"
4) Not everyone ignored it. Mostly people with 2 digit IQ's who were eaten with envy
5) It's just like having a continual "Atlas Shrugged" movie on cable.What's it like living it?

[BlueBird55]

07:54 AM on 09/27/2011

1. I live in Illinois, too, and we get back $0.73 of every $1 sent to the fed.
2. Go look it up. It's easily found with that amazing invention Google.
3. Yes, every state sends money to Wash. But not every state gets back what they send. Then the others, the red states almost exclusively, get back every $1 they send PLUS. That money comes from the blue states that get back less than they send in.
4. The people eaten with envy are the regressives that cannot stand unions because someone is making a decent living.
5. Ayn Rand reference. 'Nuff said.

[BAM47]

08:51 AM on 09/27/2011

If I were in the President's place and the Congress was insisting on cuts to equal each dollar of spending, I would make the cuts in the districts of those who insist on the cuts. If Richard Shelby and Jeff Session's state suffered a loss of jobs, they would feel the pressure from their constituents. Close some bases in Texas and Oklahoma. When was the last time Coburn and Mr Anti-Science Inhof felt this kind of pressure?

[ChangeAgent007]

09:27 PM on 09/26/2011

They need to take back the exhorbitant pensions that officials engineered for themselves in 1991. A senate bill has been introduced by Ron Sandrack to address this and a similar bill will be introduced by Minority leader Representative Cross. There are is a huge amount of money that has been taken from taxpayers through legislative means. At the very least, I think it should be investigated to see if this was done legally and if taxpayers and if there is any way it can be recouped. This is a shameful misuse of power. 99% of the state should not be paying for the 1% sins.

We demand restitution!

[knightoftheroundtable]

12:09 AM on 09/27/2011

Amen
F and F

[Frank David Nall]

07:31 PM on 09/26/2011

perhaps if they cut back the enormous pensions they are paying ex politicians and labor organisers..........Oh i forgot those are the important people......not like teachers, police or fireman.

[knightoftheroundtable]

12:10 AM on 09/27/2011

Corruption is still the number one biz in IL politics, will never change until we unseat all incumbents.

[Aldyth]

08:59 AM on 09/27/2011

The real bottom line, Knight.

[crookedcountyillinois]

07:24 PM on 09/26/2011

Whenever the Civic Federation makes a statement, no matter how late-dated or benign it is, it's suddenly newsworthy on the Sun-Times, Tribune, and Huffington Posts' websites. But when any one of the many other 501(c)(3) charitable nonprofits raises the flag, like the Illinois Policy Institute, Center for Tax and Budget Accountability, the Taxpayers United of America, For the Good of Illinois [(c)(4)], Free & Equal, or the Medill School of Journalism, etc., makes a press conference concerning the exact same subject, in many cases, months earlier than the Civic Federation, they get ignored.

Here's what I don't get: why is there a Huffington Post, if they're going to fall back into the same preferential treatment modes that made the traditional press the spectacle of failure that it is today?

[Bude]

06:30 PM on 09/26/2011

The only thing Quinn cut was benefits for union workers. Just like Scott Walker from Wisconsin.

[corwin]

05:58 PM on 09/26/2011

Jesus Christ.This is a real surprise.! The problems aren't fixed ?
Boy, I sure hope the Smart People don't learn of this.Because,they may leave the state.Then ,things will continue to worsen.Maybe ,Gov Quiinn can raise taxes to fix things before it's too late.

Corwin. Being Cruel to be Kind.
(If I were just being cruel, I would say, "I told you so." But-you know that

[greenie 61]

01:59 AM on 09/27/2011

Z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z-z.........SOSDD for corwin.

[robert horwitz]

05:43 PM on 09/26/2011

OK this comes as no surprise. Everyone knows Illinois is broke but so is just about every other state in the union. We have tried just about everything that we can think of to get back on track to no avail. Why is this? There just isn't any solution that anyone will be happy with. So lets try something new. Let's declare war on another state. Maybe a couple of states. We have a large enough population base to support it. It really doesn't matter if we win or loose. The very fact that we have gone to war will boost our industrial output and drop our unemployment to obscenely low levels bringing in huge tax revenues. I do admit that this is a rather extreme measure but Governor Quinn these are extreme times. Anyway I've always wanted to say (Over Me) and (Here's One For Mother).

[corwin]

06:04 PM on 09/26/2011

Robert,
I have a clinical trials report to write,but am taking the time to (diffidently) inform you "about every other state " isn't
Now, I'll name a state-and you tell me if it's doing well financially or not
South Dakota ?
Illinois (But,you know the answer)
California /
Nebraska?
New York?
Oklahoma-(Where the wind comes sweeping down the plains)
Massachusetts? Well, I could go on,but it would be bootless.
I'm sending a copy of "Great Rivers of the World" You can read about De Amazon,De Mississippi,and,of course,your favorite, De Nial
Cruel to be Kind/Corwin