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* Jim Nowlan in the Tribune…
Gov. J.B. Pritzker and state lawmakers have recently been trumpeting the great financial shape of Illinois. Balderdash. And they know it. There will almost certainly be state tax increases by 2025. […]
The state legislature’s own budget forecasting agency predicted in March that by one reasonable scenario, the state’s operating funds in calendar 2025 will run at a deficit of more than $3 billion annually, with a whopping $18 billion in unpaid bills (from a total budget of around $100 billion).
A “reasonable scenario”? Balderdash.
I can’t believe we have to do this again, but here we go.
* From COGFA…
Scenario 3 assumes spending increases similar to the spending rates seen over the last five years of 7.1% per year on average. This scenario has the highest expenditure growth rate analyzed and leads to the least favorable results for the State. Expenditures grow to just over $61 billion by FY 2026. This scenario reflects deficits in all three years forecast and has the worst outcome when considering the aggregate accounts payable. After a surplus of $1.9 billion in FY 2023, a deficit of $3.1 billion occurs in FY 2024. This deficit grows to almost $6.4 billion in FY 2025 and $9.2 billion in FY 2026. Under this scenario, the accounts payable rises to $18.2 billion. This example shows that spending patterns seen in the past few years cannot continue without a comparable increase in revenues which is not seen in the Commission’s current estimates.
And this is what I wrote about that very same scenario in April…
Trouble is, that particular COGFA scenario is pure fantasy, likely included merely as a “what if.” Nobody is advocating that. Revenue and spending in that five-year average included huge amounts of one-time federal money to deal with the massive COVID pandemic, which is no longer with us. The spending also included billions of dollars in one-time approps to pay down gigantic amounts of debt, including for pensions and the unemployment insurance trust fund, rather than put the money into the spending base.
That scenario projected FY24 revenues of $50.41 billion and spending of $53.54 billion, for a deficit of $3.13 billion. In the real world, actual projected revenues are $50.6 billion and spending is projected at $50.4 billion.
The current projected spending for FY24, by the way, is lower than all of COGFA’s scenarios, which as I’ve pointed out before were just numbers games played by accountants who should know better than put that stuff into publication.
That current projected spending is even lower than COGFA’s most optimistic scenario, which predicted $50.9 billion in spending and a $495 million deficit with a tiny $37 million accounts payable this coming fiscal year. Accounts payable would rise to $1.455 billion by the end of Fiscal Year 2026. However, a $3 billion accounts payable level is considered a “normal” 30-day payment cycle. Accounts payables of $1.455 billion would mean the state’s bills would likely be paid within a couple of weeks.
* First, he cherry picked the worst possible fantasy scenario, and then he goes on to predict what taxes will have to rise to fill a budget hole that will not exist…
Let’s say Democrats decide they need to raise $3 billion a year to fill that projected deficit. Where to find the money? […]
But we won’t likely tax services and pensions, nor will we abandon the effort, unnecessary in my mind, to build up the pension nest egg — all are too hot to handle politically.
So, I fear Illinois policymakers will revert to the tried, true and simple; that is, raise the income tax rate. This would, unfortunately, encourage further flight of job creators and their wealth from Illinois.
Look, I’m not saying that a revenue enhancement of some sort is not in the future. Subscribers were told about one possible tax reform effort yesterday.
All I’m saying is that using an obviously way-out-there fictional scenario to make bold predictions about the future is not sound reasoning.
*** UPDATE *** Clayton Klenke at COGFA…
Like most of the publications that we do at CGFA, the 3-year budget forecast is driven by a specific state mandate. […]
We had internal discussions when the report was written on whether we should continue to use the same scenarios as we have in the past and in the end we chose to present the same scenarios – which is exactly what they are – scenarios. They are not budget predictions. They are examples of what would occur given certain scenarios. We recognized that scenario (3) included a higher growth rate than we would normally predict, and that is why we included the text to explain why that rate was higher than normally seen. Although we wouldn’t expect those circumstances to occur again, those spending levels were driven by actual needs to pay down a backlog of bills after a multi-year budget impasse, and also to deal with a worldwide pandemic – items not too many would have deemed plausible a few years ago.
As with all of our publications, we will continue to review our methodology as we develop future reports.
posted by Rich Miller
Thursday, Jun 8, 23 @ 11:10 am
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Jim Nowlan is a grifter, the ILSC debacle he made for Republicans is stuff of legend, but the checks clear all the same.
When you sell, say, flood insurance, to grift, you talk about apocalyptic floods. Selling any type of “coverage” is about the worry to the extreme, “and I’m here to tell ya…”
Make no mistake, the op-ed, in the Tribune with the “purposeful tin-ear” of a formerly respected actor, with credible credentials… is part and parcel of the vertical integration… we’ll see this in Timpone Papers, Proft Podcasts and Radio Show, ILGOP propaganda, and ads come 2024 election time.
But first, this piece has to be published in a vessel like the Trib… then it will fester and grow like a fungus that undeterred will infect thinking of the “marks”
And the checks in the end… will all cash the same.
Comment by Oswego Willy Thursday, Jun 8, 23 @ 11:26 am
I used to respect Jim Nowlan. That respect is long gone.
Comment by G'Kar Thursday, Jun 8, 23 @ 11:29 am
When 2025 comes around everybody will be too busy with whatever the real issues are to remember Nowlan’s absurd predictions. But people today do recognize what Jim’s done to his reputation. The irony of a downstate tax eater, from areas where the largest employers are state schools, state prisons, and state facilities, complaining about too much state spending, is a bit much to take.
Comment by Socially DIstant watcher Thursday, Jun 8, 23 @ 11:32 am
Imagine paying money for the Chicago Tribune. LOL.
Comment by Larry Bowa Jr. Thursday, Jun 8, 23 @ 11:37 am
The tell?
The grift and vertical integration relies on deadlines that go past elections, so that the upcoming election is a “choice”
Even… even if projections are designed *for* 2025, using this type of egregious op-ed, and pointing *out* 2025… the gravy is the timeline, artificial or not.
Once you realize certain tells… manufactured or happenstance…
Comment by Oswego Willy Thursday, Jun 8, 23 @ 11:38 am
The spelunkers can continue, they’re only hurting themselves politically with their endless negativity. They’re mad because Democrats are succeeding. Whole lotta sour grapes.
Comment by Grandson of Man Thursday, Jun 8, 23 @ 12:30 pm
Seems he will say anything to stay in the game, maybe he save it for his coffee ketch buddies.
Comment by Annon3 Thursday, Jun 8, 23 @ 12:36 pm
klatch sorry
Comment by Annon3 Thursday, Jun 8, 23 @ 12:38 pm
why would COFGA lay out scenario three if it isn’t a plausible possibility? The personal attacks on JN ignore that prospect.
we’re all talking about the future here, so no one is on solid ground. and then there’s rich’s acknowledgment of “revenue enhancements.” doesn’t that mean tax increases?
Comment by jim Thursday, Jun 8, 23 @ 1:07 pm
===The personal attacks on JN ignore that prospect.===
No.
I’m not ignoring the prospect, I’m first recognizing the source, then I’m recognizing the why, and finally mocking the purposely grifting gloom.
You may not like that, but Jim sold out long before this or your defense.
Comment by Oswego Willy Thursday, Jun 8, 23 @ 1:11 pm
So, I shouldn’t buy the monorail insurance he offered me?
Comment by Proud Sucker Thursday, Jun 8, 23 @ 1:31 pm
But the source is the COFGA scenario, it’s not JN’s scenario.
Just because you don’t admire him doesn’t make it any less a COFGA scenario. It must have some plausibility or it wouldn’t have been included in the report. COFGA’s scenario surely isn’t “grifting glood.”
Comment by jim Thursday, Jun 8, 23 @ 1:37 pm
===But===
Yeah. Sure. lol
Either you are a mark or you’re working with the grift.
Comment by Oswego Willy Thursday, Jun 8, 23 @ 1:40 pm
@Jim: not all illustrations are “reasonable” (Nowlan’s word) or “plausible” (yours).
Some are merely hypothetical. It’s up to policymakers to decide what course to take, and so COGFA runs some options to illustrate what might happen. That’s all this is.
Neither reasonable not plausible.
Comment by Socially DIstant watcher Thursday, Jun 8, 23 @ 1:56 pm
===why would COFGA lay out scenario three if it isn’t a plausible possibility? ===
You’d have to ask them because it most DEFINITELY is NOT plausible. Period.
Comment by Rich Miller Thursday, Jun 8, 23 @ 1:57 pm
“Either you are a mark or you’re working with the grift.”
Now there’s an irrefutable argument.
Re Rich’s suggetion to ask COGFA, it must be plausible to the analysts there. Just saying it “DEFINITELY” is not plausible doesn’t make it so, but I bow to the strident voices.
Comment by jim Thursday, Jun 8, 23 @ 2:13 pm
===it must be plausible to the analysts there===
No, it’s not. It’s simply an exercise. Give it up, already.
Comment by Rich Miller Thursday, Jun 8, 23 @ 2:16 pm
Every year, I create a budget for the year with a ‘worst-case scenario’ and use that figure for how to manage how funds are moved around, and where they sit, for that upcoming year. It’s important to know that funds are not locked up for a period of time, if they may be needed at any time they are locked up - incurring additional penalties for that poor planning.
It doesn’t mean I expect that to happen. It means if all these extremely unlikely things do happen, it is the plan for how I will deal with it.
Because when a bunch of things go wrong, the last thing you want to be doing is figuring out finances.
Some people just can not grasp how planning works. I guess that’s Jim’s audience.
Comment by TheInvisibleMan Thursday, Jun 8, 23 @ 3:06 pm
Nowlan has achieved IPI status. When you see the name on an article, ignore it.
Comment by Norseman Thursday, Jun 8, 23 @ 3:26 pm