* All emphasis added. From the Rauner administration’s presentation to potential buyers of its $750 million bond offering…
INVESTMENT CONSIDERATIONS RELATING TO THE FINANCIAL CONDITION OF THE STATE
The State operated without fully enacted General Funds Budgets for Fiscal Years 2016 and 2017. The Fiscal Year 2018 General Funds Budget was vetoed by the Governor, and was enacted by the General Assembly after overriding the Governor’s vetoes of the Fiscal Year 2018 budget package. There can be no assurance that a budget will be enacted in future fiscal years.
Great. But, hey, they’re just being honest.
The Fiscal Year 2018 General Funds Budget was balanced after the inclusion of several items including the budgetary impact of the issuance of the Section 7.6 Bonds and authorized fund reallocations and interfund borrowing. The Fiscal Year 2018 General Funds budget has an estimated underlying structural deficit of $1.5 billion… To avoid future structural deficits, the Governor and the General Assembly would, among other potential solutions, need to reduce expenditures, adjust revenue collections or approve a combination of revenue adjustments and reductions in expenditures. The State can provide no assurances as to how, when or in what form this might be addressed.
* Remember the governor’s 2013 campaign vow: “They won’t stop me if I want to dramatically spend less. You need the legislature if you want to spend more. If you want to spend less, they can’t stop me”? Well…
The State estimates that the General Funds financial commitment in Fiscal Year 2017, beyond the amounts sent to the Comptroller in Fiscal Year 2017 described under “Fiscal Year 2017 Spending in the Absence of a Budget,” totaled $1.6 billion for State employee health insurance providers and $1.2 billion for other State operational costs and grants. […]
Total General Funds expenditures with the revised definition of funds for Fiscal Year 2018 are estimated to be $37.4 billion, an increase of $1.7 billion or 4.8 percent from estimated Fiscal Year 2017 results for the revised definition of General Funds. This reflects approximately $150 million in deficit reduction actions directed by the Governor.
So, instead of “dramatically” spending less, the governor spent $1.2 billion without an appropriation last fiscal year and has identified just $150 million in cuts this fiscal year.
*** UPDATE *** Comptroller Mendoza…
The Governor has now signaled that he plans to head into yet another budget cycle without talking, negotiating or compromising with legislators – leaving the state once again without a budget. That demonstrates the height of irresponsibility and the failed leadership that has come to define Governor Rauner. The good news is that legislators of both parties proved this year they are up to the task of working around an obstructionist, out-of-touch, and frankly, irrelevant governor to pass a budget for the good of Illinois.
The message that I continue to send investors, because it is true, is that Illinois is a sound investment and will continue to meet its debt service obligations under my watch. I implore the Governor to learn from his past mistakes and to follow through on his Constitutional responsibility to submit a balanced and responsible budget. He should do his job and begin good-faith negotiations with legislators.