* The Commission on Government Forecasting and Accountability has a new report on Fiscal Year 2013, and it’s not pleasant…
After exceeding expectations in FY 2012, the largely economically related sources are forecast to slow significantly as the recovery appears to be stalling out. With most econometric prognosticators anticipating little growth, coupled with the continuing disappointing jobs picture, there is little reason to believe underlying revenue growth will be able to match last fiscal year’s pace.
Illinois’ net income tax revenues will be down, according to COGFA, because of the extra tax payments made this past April 15 which weren’t taken out of paychecks immediately after the tax hike took effect in January of the previous year. But net corporate income taxes are expected to grow by $214 million. After a barn-burner year, sales taxes are expected to grow only 1.6 percent.
State Sen. Mike Frerichs, D-Champaign, who is one of 11 legislative members of COGFA, said the new report will put greater pressure on lawmakers to cut spending again next year.
“I think a lot of my colleagues looked at the cuts we made this year and said, ‘We did it. We’re done,’” Frerichs said. “But I think this shows that there’s going to be a lot more pain in the next few years.”
Frerichs said that “next year could potentially be as bad or worse in terms of cuts to important services. It just means we’re going to have to work extra hard to protect the important parts of state government, and make sure our priorities downstate are protected.”
* The budget squeeze is one of the reasons that Gov. Pat Quinn has latched onto pension reform. He pushed it again yesterday…
Gov. Pat Quinn Thursday said lawmakers should consider a comprehensive pension-reform proposal when they return for a one-day special session next week.
Speaking before the start of the Illinois State Fair Twilight Parade, Quinn said lawmakers should consider a reform bill introduced this week by Rep. Elaine Nekritz, D-Northbrook.
Nekritz’s bill imposes the same changes on pensions for downstate teachers, university workers, state employees and state lawmakers. A bill approved in May by the Illinois Senate made changes only to pensions for state employees and lawmakers. […]
One problem with Nekritz’s legislation is that it was introduced as a brand-new bill and could not work its way through the General Assembly in a single day. The special session called by the governor is only scheduled to last Aug. 17. Quinn, though, said there are parliamentary techniques available to lawmakers to put the Nekritz proposal onto another bill and pass it in one day.
* And the governor has cranked up the rhetoric…
A retirement funding hole long pegged at $83 billion could hit nearly $93 billion by next summer if changes are not made, the administration projects. In turn, pension payments are gobbling up so much of the state budget so quickly that state government could be spending more on basic annual pension payments than it does on education within four years.
“This is a fire bell in the night,” Quinn said this week. “This is an alarm for all of us.” […]
But the Quinn team estimates that by mid-2016, state government will be spending $5.8 billion on grade schools and high schools and $6.2 billion on pensions. Although it is true that pension payments are scheduled to keep increasing in the coming years, the governor’s analysis also assumes that lawmakers will continue to cut education spending.
That point is disputed by many lawmakers, however. A spokeswoman for Senate Republican leader Christine Radogno of Lemont dismissed the Quinn estimates as “extremely unreliable.” […]
Depending on one’s point of view, the state already may have reached the schools-pensions imbalance Quinn projects will take place in four years. The state is making a $5.2 billion pension payment this year, but it’s also paying back $1.55 billion in pension-related loans taken out under former Gov. Rod Blagojevich and early in Quinn’s tenure. Totaled up, that $6.75 billion is greater than the $6.2 billion the state is spending on schools this year.
* And the Tribune thinks that just passing a SERS and General Assembly Retirement System reform would be a “baby step”…
At best, this bill would be a baby step up Mount Kilimanjaro. But that’s nowhere near enough.
Illinois is in crisis. “Reform lite”? Forget it.