* Press release…
In a report detailing the toll that former Gov. Bruce Rauner’s ideological warfare inflicted on Illinois, the Pritzker administration released a new report today detailing a budget gap for the upcoming fiscal year of $3.2 billion, 16 percent more than the Rauner administration estimated in November.
Digging Out: The Rauner Wreckage Report builds on and extends the work of the Illinois Comptroller’s Office, identifying even worse damage than previously known – particularly the true magnitude of the budget deficit and the backlog of bills – triple the amount of when Governor Rauner’s impasse began. Late payment interest penalties related to Rauner’s impasse have exceeded $1.25 billion, and interest on the refinancing of Rauner’s bill backlog will surpass $2 billion.
“Illinois will need years to dig out of the fiscal mess this administration inherited, and the road to recovery will begin with Governor Pritzker,” said report author Deputy Governor Dan Hynes, who oversees budget and economic issues for the administration. “The Pritzker administration will be honest and transparent about the challenges we face and put forward long-term plans and investments that will get our state on firm financial footing. Despite these challenges, we will propose a balanced budget that invests in education and human services that were decimated under the previous administration.”
The report goes on to detail the human and fiscal consequences of the historic budget crisis, a failed and prolonged dispute with AFSCME, the continued backsliding on pensions and chronic mismanagement of state government. With new revelations of failure coming nearly every week, the report also details previously unreported failures, such as failing to pay the rent for the Governor’s Washington, D.C. office and forfeiting millions in federal reimbursements for OSHA.
Among the countless missed opportunities in the report, the state’s late payment penalties have crowded out other investments. Namely:
* Last year alone, the State paid out more than $700 million in late payment penalties – about what the state spends on the Department of Children and Family Services, or enough to hire at least 7,000 new teachers across the state.
* Illinois’ general obligation bond ratings are the lowest among the states, costing more than $75 million a year in additional interest costs on bonds issued since 2017. That is the equivalent of an additional 25,000 MAP recipients per year since 2017 – or enough for MAP grants for every undergraduate student at SIU-Carbondale and Illinois State every year.
While a generation of future Illinoisans will be forced to deal with Gov. Rauner’s fiscal wreckage, the new administration will use its first budget to light a multi-year path forward to fiscal stability and a new prosperity for Illinois.
Additional details are available in the report.
* From the report…
1. If left unaddressed, the State of Illinois’ general funds budget deficit for FY20 would be approximately $3.2 billion, roughly 16 percent higher than the Rauner administration officially estimated just three months ago.
2. The state’s debt associated with unpaid bills is nearly $15 billion: $7.9 billion in unpaid bills, $5.5 billion in backlog borrowing, $650 million in interfund borrowing and $500 million in estimated backpay for state workers. This is almost triple the amount outstanding before Governor Rauner’s impasse began.
3. Rauner’s failed and prolonged dispute with AFSCME over step increase wages has resulted in a court finding that he improperly withheld wages from state employees. The cost of his anti- union battle may total more than $500 million with the impact of compounded interest penalties.
4. The State’s projected unpaid bill backlog at the end of FY19 is likely to be $500 million more than previously stated, creating longer delays in vendor payment cycles and additional pressure on the provider community – and, most critically, the vulnerable Illinoisans they serve.
5. Interest alone on additional general obligation bonds attributable to the refinancing of Rauner’s bill backlog will exceed $2 billion.
6. Late Payment Interest Penalties that built up during the impasse exceeded $1.25 billion. Continued interest payments will likely exceed $60 million in FY19 in part because this year’s budget maintains a structural deficit that went unaddressed during Rauner’s term.
7. The State’s management and administrative infrastructure has deteriorated significantly, with major fiscal, legal and other critical positions unfilled for years. Reductions in staffing have affected public safety and social service programs.
8. The mismanagement of state contracts has allowed increased costs and lengthy project delays, resulting in, for example, information technology systems that don’t function effectively. This mismanagement severely impacts the administration and delivery of vital services, including healthcare. In some cases, it threatens the flow of federal reimbursement funds. The mismanagement extends to basic government functions like processing revenues and paying rent.
9. Tens of millions of dollars have been and will continue to be allocated to comply with court orders and consent decrees due to management failures to address the state’s most serious challenges.
…Adding… Good point…
Link is here.