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Today’s number: $25 billion
Thursday, Jan 7, 2016 - Posted by Rich Miller * The governor’s budget office has released its annual three-year budget forecast. Click here. GOMB is projecting a $4.6 billion deficit with $9 billion in backlogged bills by the end of this fiscal year, and then it only gets worse down the line. By Fiscal Year 2019, the numbers crunchers are projecting a $5 billion deficit and a whopping $25 billion in bill backlogs. That’ll be 65 percent of total state expenditures, and 72 percent of the state’s operating budget. And that’s assuming the governor’s relatively low spending projection increases (less than a billion a year) hold up. By law, these projections can assume no tax increases. And for you pension worriers, total state pension payments are expected to rise by a relatively modest $200 million per year over the next three years. * There’s also this from the accompanying narrative…
There’s no explanation for what those cost savings were, however. And $700 million of $36.55 billion in total spending is just 1.9 percent, which is hardly the magic that the “businessman” candidate promised. Even so, every little bit helps, I suppose.
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- Anon221 - Thursday, Jan 7, 16 @ 12:19 pm:
Here’s one of the “cost-savings”. Please listen to the audio clips for the cascade effect this will have no just on the clients served. DeWitt County and Clinton may not be Cook County and Chicago, but the fallout from failing to help those in our communities that need aid has consequences- http://www.wbez.org/news/dcfs-inspector-general-8-state-wards-killed-street-violence-last-year-114406 .
http://dewittdailynews.com/news/details.cfm?clientid=22&id=202572#.Vo6rBHLUiic
- Harvest76 - Thursday, Jan 7, 16 @ 12:21 pm:
Appears we’re turning around in a more downward direction.
- 47th Ward - Thursday, Jan 7, 16 @ 12:26 pm:
Maybe now the Governor will tell us how eliminating collective bargaining rights, ending prevailing wage and implementing term limits will reverse these horrible numbers.
- Abe the Babe - Thursday, Jan 7, 16 @ 12:27 pm:
But there’s no revenue problem. its mostly waste fraud and abuse right?
- walker - Thursday, Jan 7, 16 @ 12:35 pm:
Tragic
One additional bitter pill is that some of this spending is driven by court order, in the absence of a passed budget, and would have been lower if the GA spending “budget” plan had been accepted by Rauner. Even without any taxes increased, we’re worse off fiscally than we could have been solely due to lack of agreement.
- Tone - Thursday, Jan 7, 16 @ 12:36 pm:
Eliminating collective bargaining rights, ending prevailing wage and implementing term limits (ie. getting rid of awful politicians who have held the state back economically for years) will create a much more friendly economic environment that will encourage job growth and hence tax receipts.
- From the 'Dale to HP - Thursday, Jan 7, 16 @ 12:38 pm:
If you can’t find $5 billion in waste, fraud, and abuse in year one, then I’m not so sure you’re going to find $5 billion in waste, fraud, and abuse in years 2, 3, and 4. But then again, I didn’t wear my Carhartt jacket this morning.
- wordslinger - Thursday, Jan 7, 16 @ 12:42 pm:
What 47 said.
Here is a golden opportunity for the governor to make the case that his proposed “structural reforms,” whatever they are, would right the state’s fiscal ship.
The numbers are there for everyone to see. Explain how the “reforms” would mitigate this disaster. Show us the magic.
See why this crew speaks in weasel-word banalities, rather than specifics?
That $700 million figure, even though it’s just pulled out of air, is absolutely damning coming from a candidate who claimed he could move mountains going after “waste, fraud and abuse.”
- 47th Ward - Thursday, Jan 7, 16 @ 12:44 pm:
Tone, you got any graphs or slides that show how much new revenue we can expect to generate? Because I’m all ears. I’d love to to find a way to generate that kind of money, and would even consider lowering the standard of living for union families if the pay-off was that sweet.
Also, Tone, if you have that data handy, maybe share it with GOMB or something. Please don’t keep it a secret any longer. We’ve been waiting patiently for seven months now.
- Sir Reel - Thursday, Jan 7, 16 @ 12:44 pm:
How do you come up with $4.6 billion for FY16? At this point in the fiscal year a tax increase back to 5% ain’t gonna do it.
This is how you run State government like a business. A business that goes out of business.
- Anon221 - Thursday, Jan 7, 16 @ 12:45 pm:
And the race to see which state gets a budget first continues-
http://www.mcall.com/news/nationworld/pennsylvania/mc-pa-pennsylvania-cannot-pay-its-bills-20160106-story.html
- illini - Thursday, Jan 7, 16 @ 12:46 pm:
Quoting from my local paper of remarks made by Sen. Kyle McCarter -
“I believe there is enough waste, fraud and abuse in this government that you can find the money, and there are enough projects we can just do without that we can find the money to balance the budget.”
Where have we heard this before?
By the way he has been endorsed by the Club for Growth in his contested Primary against John Shimkus.
- Chicagonk - Thursday, Jan 7, 16 @ 12:48 pm:
Obviously the income tax needs to be raised back to where it was, but what caused the large increase in “healthcare” expenditures as listed on the report?
- Formerly Known As... - Thursday, Jan 7, 16 @ 12:49 pm:
Illinois’ total appropriations exceeded $97 Bill in 2014. More than just the General Fund expenditures must be evaluated for Illinois to return to fiscal solvency.
As the Univ of IL IGPA says
== Focusing only on General Funds
Allows important budgetary choices, such as changes in transportation spending, to be made with little scrutiny.
Makes it harder to monitor actual changes in spending from one year to the next.
Makes it more difficult to foresee future budgetary problems.==
- Juice - Thursday, Jan 7, 16 @ 12:55 pm:
Chicagonk, the GA decided to basically pre-fund Medicaid in FY 15. (Using FY 14 revenues for FY 15 liability). So FY 15 was artificially low, which is why there is such a big jump in FY 16.
And looking at the 700 million in savings, it would appear over half of that comes from whacking the universities.
- burbanite - Thursday, Jan 7, 16 @ 12:56 pm:
Union workers tend to have higher pay, so they pay more in taxes and they have health care so their health care isn’t on the State. Business friendly should not translate to more income inequality. How bout the elected officials concentrate more on those who elected them, than their rich buddies.
http://www.cbsnews.com/news/how-low-wage-employers-cost-taxpayers-153-billion-a-year/
- Formerly Known As... - Thursday, Jan 7, 16 @ 12:58 pm:
==Obviously the income tax needs to be raised back to where it was==
Even that is not enough.
Look up the Sun Times ==Moody’s: Reinstating Illinois income tax hike not enough== from last year. IGPA also says that.
- Norseman - Thursday, Jan 7, 16 @ 12:59 pm:
=== Maybe now the Governor will tell us how eliminating collective bargaining rights, ending prevailing wage and implementing term limits will reverse these horrible numbers. ===
47, the only way the numbers are helped if you look at other factors. The Gov promises - for whatever that is worth - that state employees’ salaries will not be reduced. So eliminating their collective bargaining for them (if put back on the table) would save on insurance costs and savings from the wage freeze. Eliminating collective bargaining and prevailing wage for the locals will only help the state budget if Rauner cuts funding to them.
You have to really go through tortured partisan logic to get any savings from term limits. That being the idea that the GOP would have more opportunity to gain seats. In their minds, the GOP would save the day.
- Anon221 - Thursday, Jan 7, 16 @ 1:00 pm:
Chicagonk- and to be cynical (and realistic), cutting the social services net to shreds will result in more tax-payer funded healthcare services. If you don’t “pay-it-forward”, you “pay for it in the end”.
- cdog - Thursday, Jan 7, 16 @ 1:07 pm:
When is that big bond sale? I can hear the vacuum as the rating agency analyst run to their computers to whack us with another down-grade.
Seems like we could be watching a nicely executed Big Finance double-play….
Drive up borrowing rates and lock in some sweet returns in those hefty portfolios.
Hedge by buying swaps that short the Illinois economy just in case those big a&& payments don’t get made.
Any body seen The Big Short yet?
- Austin Blvd - Thursday, Jan 7, 16 @ 1:13 pm:
Thanks Bruce. Thanks Durkie. Thanks Radagno. Thanks all ostriches with your head in the sand.
This is the Ostrich Budget.
- Demoralized - Thursday, Jan 7, 16 @ 1:19 pm:
I swear if I didn’t know better I’d think Tone worked in the Governor’s communication office.
Anywho, somebody might want to ask GOMB how much in Prompt Pay interest is racking up right now.
- Ostrich Caucus - Thursday, Jan 7, 16 @ 1:19 pm:
Led by our governor, fueled by those who believe our state has a spending problem and not a revenue problem. Supported by those who believe whatever reforms the Turnaround Agenda might bring will balance our budget…
The Ostrich Caucus is called to order…
- Former State Employee - Thursday, Jan 7, 16 @ 1:23 pm:
Remember. Rauner said he would find $500mm in savings per year at CMS alone.
- Anon221 - Thursday, Jan 7, 16 @ 1:26 pm:
Anyone starting to hear the refrain of, “I can’t do it, I just can’t do it alone. Ya gotta help me,” in the preps for the State of the State and Budget Addresses. Or, will it be more of, “I warned you. You wouldn’t listen. You just wouldn’t listen.” Either way, it won’t be Rauner’s fault. /s
- blue dog dem - Thursday, Jan 7, 16 @ 1:40 pm:
Rich, the modest $200 mil/yr is relatively small. But some early estimates are that after next census,life expectancies could go up by as much as 3 1/2 years.this will add billions .
- RNUG - Thursday, Jan 7, 16 @ 1:45 pm:
Bruce has never failed at anything; just ask him. You’ll never hear him say he can’t do it.
- @MisterJayEm - Thursday, Jan 7, 16 @ 1:47 pm:
“$25 billion in bill backlogs”
Is that the hammering or the shaking?
– MrJM
- Formerly Known As... - Thursday, Jan 7, 16 @ 1:54 pm:
==This is the Ostrich Budget.==
==Supported by those who believe whatever reforms the Turnaround Agenda might bring will balance our budget… The Ostrich Caucus is called to order…==
And what do we call those who passed and implemented our prior two consecutive budgets, both of which were grotesquely unbalanced?
- Niblets - Thursday, Jan 7, 16 @ 2:02 pm:
When I first read the comment by tone I was sure that someone had forgotten to put /s or snark or something to indicate that it was meant to e humorous.
Not very funny.
- wordslinger - Thursday, Jan 7, 16 @ 2:03 pm:
–Eliminating collective bargaining rights, ending prevailing wage and implementing term limits (ie. getting rid of awful politicians who have held the state back economically for years) will create a much more friendly economic environment that will encourage job growth and hence tax receipts.–
Tone, be so kind as to show your work. Growth rates, increased revenues, and timelines on how that will fix a $25 billion hole.
–And what do we call those who passed and implemented our prior two consecutive budgets, both of which were grotesquely unbalanced?–
Grotesquely? Matter of degree, wouldn’t you say?
That FY15 fix wasn’t exactly a heavy lift, was it? $1.5 billion sweep?
What was your concern with FY14 in comparison to FY16? They’re similar, how?
- Downstate Hack - Thursday, Jan 7, 16 @ 2:04 pm:
Thank you Mr. Madigan
- cdog - Thursday, Jan 7, 16 @ 2:27 pm:
from Crain’s, yesterday…
“They’re definitely going to have to pay a higher yield,” said Dan Solender, head of municipals at Lord Abbett & Co. in Jersey City, N.J., which manages $17 billion of the debt, including Illinois bonds. “They’re going to be penalized compared to other bonds of similar ratings.”
“In Illinois’ last sale, bonds maturing in 2039 were issued at a yield of 4.5 percent, about 2.2 percentage points more than benchmark securities, according to data compiled by Bloomberg. When they traded Dec. 28, the difference had widened to about 3 percentage points.”
Thanks Gov Rauner. Do we get to see your portfolio?
Rauner to Madigan, “Yes, the house on fire, BUT, we are not fighting any fires until you admit that you overpaid, served it cold, and bought too much pizza yesterday!” Looking like the flames are starting to catch the big timber.
Taxpayers are losing from all angles–before Rauner, during Rauner, and after Rauner.
- Juvenal - Thursday, Jan 7, 16 @ 2:28 pm:
Rich -
By my calculations, Rauner will have increased the state debt by $2000 for every man, woman and child in the state by the end of his first term.
- cdog - Thursday, Jan 7, 16 @ 2:34 pm:
This was before the beauty that was released today from GOMB.
http://www.chicagobusiness.com/article/20160106/NEWS02/160109920/illinois-going-to-be-penalized-in-upcoming-bond-sale
- Rich Miller - Thursday, Jan 7, 16 @ 2:41 pm:
cdog, that was covered here yesterday.
- cdog - Thursday, Jan 7, 16 @ 2:52 pm:
okey dokey!
- My button is broke... - Thursday, Jan 7, 16 @ 3:36 pm:
From the longer report from GOMB: “The Governor has a long term goal of paying down the backlog of bills to a normal level, where all vendors are getting paid in 30 days or less.”
Very admirable goal. When you say long term goal, are we talking 20 years? 40?
- Get a Job!! - Thursday, Jan 7, 16 @ 4:16 pm:
@ My Button is Broke
The funny thing is that this time last year, Illinois was actually getting close to being current on its bills…….Until SOMEBODY urged the GA/Quinn to not extend the income tax. Had they done so, Illinois would be damn near current on its bills right now.
- Tabster - Thursday, Jan 7, 16 @ 8:38 pm:
Tone - Wisconsin eliminated collective bargaining, prevailing wage, etc., and that state has plummeted to 49th in economic outlook, had the largest decrease in middle class income levels of all 50 states, and has been *losing* businesses, not gaining them. Your claim that doing these things would increase jobs and thus taxes is bogus, and we have real world examples to prove it.