Governor J.B. Pritzker revealed details yesterday about the massive state budget shortfall coming to the state of Illinois because of the COVID-19 pandemic. U.S. Economy experts have made an early projection of combined state budget deficits equally over $500 billion over the next 2 years.
Pritzker outlined where Illinois budget problems exist: “The bottom line is this. Budget experts estimate Illinois will have a $2.7 billion shortfall of revenues for this fiscal year, and a $4.6 billion shortfall for next fiscal year. This is a public health crisis – but it is accompanied by massive economic disruption that’s unprecedented in modern history. Illinoisans are all too familiar with the pain the lack of a state budget can cause, so let me just say up front: we will not go without a state budget. We will need to make extraordinarily difficult decisions on top of the difficult decisions we’ve already made, but together with the state legislature we will make them and we will do so with an unswerving dedication to fairness. In the midst of a pandemic, I am more resolute than ever to protect those who are suffering physical and financial hardship from it.”
The total shortfall for fiscal year 2021 is $6.2 billion when compared to the spending plan that Pritzker proposed in February. Pritzker’s budget team projects that the shortfall would expand to $7.4 billion if the graduated income tax is not passed during the General Election in November. Pritzker said that the state needed the Graduated Income Tax to pass “now more than ever” during the press conference.
IL GOP Chairman Tom Schneider called campaigning for the issue inappropriate in a press release: “It seems Governor Pritzker has taken Rahm Emannuel’s “never let a crisis go to waste” adage to heart. With a global pandemic that has plunged the state’s economy to depths not seen since the Great Depression, this is the worst possible time to push through a tax hike that will crush small businesses who provide so many of our jobs. Pritzker using a Coronavirus briefing to campaign for the progressive income tax is inappropriate and unfortunate.”
The Governor’s Office of Management and Budget has directed all agencies to cut all discretionary spending and hiring for the current fiscal year with a projected savings of $25 million. The Comptroller and Treasurer’s Office have extended $400 million in investment borrowing agreements that were due to be repaid from the General Revenue Fund in March and April to July 2020. Suzana Mendoza has also utilized interfund borrowing authority to transfer an additional $323 million in March and April to the general funds to help with COVID-19 relief efforts and shortfalls.
The Governor said yesterday that he is also directing nearly $500 million in additional spending authority to IEMA through the emergency powers granted under the gubernatorial disaster proclamation. Much of this spending is concentrated on obtaining personal protective equipment for frontline workers and for the purchase of ventilators for the state’s COVID-19 patients. Pritzker said that he hopes the federal government will pass a state-directed stimulus package to help fill the gap in all 50 states’ budget shortfalls.