Capitol Fax.com - Your Illinois News Radar » CTBA: Deficit is far higher than both Rauner and COGFA projections
SUBSCRIBE to Capitol Fax      Advertise Here      About     Exclusive Subscriber Content     Updated Posts    Contact Rich Miller
CapitolFax.com
To subscribe to Capitol Fax, click here.
CTBA: Deficit is far higher than both Rauner and COGFA projections

Friday, Sep 30, 2016 - Posted by Rich Miller

* From the Center for Tax and Budget Accountability’s budget director Bobby Otter on the two competing deficit projections

The Commission on Government Forecasting and Accountability (COGFA) - the Illinois General Assembly’s independent budget analysts, projected that total state spending for the current fiscal year (FY2017) which began on July 1, will ultimately be $39.5 billion, but that revenue would only come in at $31.8 billion, leaving nearly a $7.8 billion deficit. On Wednesday, Rauner’s administration disagreed maintaining the budget deficit would be $5.4 billion. Budget Director Tim Nuding said the commission didn’t factor in several key sources of revenue, including the full amount of federal reimbursements to the state for Medicaid anticipated for FY2017.

What’s really troubling is that both of these projections of the General Fund deficit only compare anticipated, year-in, FY2017 spending to FY2017 revenues. Neither are factoring the accumulated deficit left over at the end of FY2016-and thus both COGFA and the Governor’s Budget Office understate the true General Fund deficit in Illinois. (The “General Fund” is the part of the state budget that pays for the services that affect most people-education, healthcare, public safety, and human services.)

HERE’S WHY.

At the end of FY2015, the state’s General Fund deficit was $5.97 billion. CTBA’s analysis shows that the accumulated deficit grew by some $3.13 billion over the course of FY2016, to a total of $9.1 billion.

In other words, Illinois began FY2017 with $9.1 billion in unpaid bills. That means that even if we balanced this year’s revenue with this year’s expenses, we’d still have a $9.1 billion deficit.

Of course, that means both deficit projections quoted in the Sun-Times article understate the true accumulated deficit by that $9.1 billion carry forward. After this carry forward deficit is included, the projected FY2017 General Fund deficit balloons to either $14.5 billion using the Governor’s estimates, or $16.9 billion using COGFA’s.

Another way to look at the General Fund deficit is as a percentage of General Fund service appropriations. CTBA analysis projects the state to spend $24.69 billion on General Fund services in FY2017. Using the Governor’s projected FY2017 deficit figures, 58.7 percent of all General Fund service appropriations aren’t paid for by FY2017 revenues. Since COGFA projects the FY2017 deficit to be even greater, using its numbers, that figure is 68.4 percent.

What does this all mean? The state’s financial condition continues to deteriorate due to a lack of revenue. Whether the General Fund deficit is $14.5 billion or $16.9 billion, it’s definitely unstainable. Between 59 percent and 68 percent of FY2017 spending is deficit spending. And Illinois will continue on this deficit spending path until it increases revenue. But in order to do that, the state needs to fix its flawed tax policy in order to generate additional revenue (see “It Is All About Revenue: A Common Sense Solution for Illinois’ Fiscal Solvency” for CTBA’s suggestions to fix the state’s revenue problems). Until then, the trend of growth in the accumulated deficit is likely to occur past FY2017.

* The accompanying chart…

       

15 Comments
  1. - Spiritualized - Friday, Sep 30, 16 @ 1:56 pm:

    What will this look like come the end of Rauner’s first term, when only stopgap budgets are likely to be passed?


  2. - Honeybear - Friday, Sep 30, 16 @ 2:04 pm:

    Broadside on to the wave.


  3. - walker - Friday, Sep 30, 16 @ 2:05 pm:

    Numbers are accurate as usual for CBTA, but it depends on what questions we are trying to answer. CBTA just added a third factor, carry over, to complete either picture as to an end point status.

    I wish CBTA had answered the question: Which of the two numbers originally provided by COGFA and GOMB were a better reflection of the 2017 Projected deficit? and Why?


  4. - Honeybear - Friday, Sep 30, 16 @ 2:06 pm:

    They are also assuming that Revenue will come in like they expect it to. What if our continued deterioration causes revenue to not come in like we thought? I would think all the contracts that haven’t been paid would have an effect on our revenue. Our state owes businesses billions. Doesn’t some of that come back into the coffers in the form of revenue?


  5. - Linus - Friday, Sep 30, 16 @ 2:11 pm:

    People, please: Term limits will fix this.


  6. - RNUG - Friday, Sep 30, 16 @ 2:14 pm:

    == Term limits will fix this ==

    No. Honestly matching revenue to expenses will fix it.


  7. - Angry Chicagoan - Friday, Sep 30, 16 @ 2:17 pm:

    So it quickly gets to the point where the five percent income tax fixing this has left the station. We’re going to need seven or eight percent.


  8. - Big Muddy - Friday, Sep 30, 16 @ 2:20 pm:

    =No. Honestly matching revenue to expenses will fix it.=

    No. Honestly matching expenses to revenue will fix it.


  9. - cdog - Friday, Sep 30, 16 @ 2:21 pm:

    The crazy thing about this truth, is Rauner is still thinking his TA 1.4% ROI is relevant and a rational path to address either total.

    Cut this guy off. Take the keys.


  10. - Linus - Friday, Sep 30, 16 @ 2:29 pm:

    (Apparently, we still have to clearly label our snark as “snark.”)


  11. - Hit or Miss - Friday, Sep 30, 16 @ 2:32 pm:

    “People, please: Term limits will fix this.

    The fix to the problem is: 1) a substantial cut in spending, or 2) a substantial increase in tax revenue, or 3) both #1 and #2 at the same time.


  12. - Huh? - Friday, Sep 30, 16 @ 2:42 pm:

    No. No. Passing the turn around agenda will fix this. Our brilliant businessman governor who knows what is best for us told us this was true. /s


  13. - Keyrock - Friday, Sep 30, 16 @ 2:43 pm:

    Linus - I saw your blanket snapping when you posted. ;-)


  14. - Leaving Eventually - Friday, Sep 30, 16 @ 3:23 pm:

    Every budget looks more and more grim. I, for one, am starting my 3 year plan to leave Illinois. It’s frustrating, because I’ve spent the last 12 years here. In that time, I’ve seen the economy crash and slightly rebound. And by the end of 2019, I’ll have moved to another state that can get its financial house in order.


  15. - Linus - Friday, Sep 30, 16 @ 4:13 pm:

    Keyrock, your handle should be “YouRock”


Sorry, comments for this post are now closed.


* Carp-e Diem!
* Roundup: Jurors see Madigan’s list of recommended hires for Pritzker administration
* Open thread
* Isabel’s morning briefing
* Live coverage
* Selected press releases (Live updates)
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............


Loading


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
December 2024
November 2024
October 2024
September 2024
August 2024
July 2024
June 2024
May 2024
April 2024
March 2024
February 2024
January 2024
December 2023
November 2023
October 2023
September 2023
August 2023
July 2023
June 2023
May 2023
April 2023
March 2023
February 2023
January 2023
December 2022
November 2022
October 2022
September 2022
August 2022
July 2022
June 2022
May 2022
April 2022
March 2022
February 2022
January 2022
December 2021
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller