Your occasional state budget/revenue reminder
Monday, Mar 23, 2026 - Posted by Rich Miller
* Ralph Martire…
Start with the canard that Illinois has a priorities problem. The FY 2027 budget proposal appropriates a total of $39.8 billion to fund services, 95 percent of which are targeted to the core areas of education, healthcare, social services, and public safety. Those four core categories have always accounted for anywhere from 93 percent to 95 percent of total General Fund spending on services, irrespective of which party controlled the governor’s office or General Assembly.
So if the priorities getting funded in FY 2027 are somehow wrong, they’ve been wrong for generations, and neither party has seen fit to change them. Better yet, perhaps Bailey could enlighten the rest of us as to which core service area — education, healthcare, social services or public safety — shouldn’t be a priority.
The second prevarication that has to be dispelled once and for all is the contention Illinois has a “spending” rather than a “revenue” problem. All the data say otherwise. If the FY 2027 budget passes as proposed, spending will increase on a year-to-year basis by roughly $600 million. That’s a mere 1.5 percent more than last year, if you ignore inflation. But just like the private sector, inflation drives up the cost of funding services in the public sector. After adjusting for inflation, proposed spending on the four core services in FY 2027 is actually 1.5 percent less than this year.
Of course, scrimping on core service expenditures is nothing new in Illinois. In fact, after inflation, spending on the four core services would be 13 percent less under Pritzker’s FY 2027 proposed budget than actual spending was under Republican Gov. George Ryan back in FY 2000. […]
Moreover, Illinois’ General Spending is also relatively low when compared to other states. According to the Bureau of Economic Analysis, Illinois ranked 39th in per capita general fund spending in 2024 (the most recent year for which complete data is available). It strains credulity to claim the sixth most populous state ranking 39th in per-capita spending is a high spending state.
Discuss.
- New Day - Monday, Mar 23, 26 @ 1:21 pm:
Leave it to Ralph to throw a truth bomb at Darren Bailey’s bogus assertions. I consider myself fairly learned on this stuff and some of this was news to me. Great job, Ralph.
- Anyone Remember - Monday, Mar 23, 26 @ 1:26 pm:
Kudos to Ralph for being able to restate this every year with succumbing to frustration at having to restate this every year …
- Juice - Monday, Mar 23, 26 @ 1:33 pm:
I generally don’t disagree with Ralph on any of this.
I would just say that a) state government spends a lot less on education than most elected officials of both parties would prefer. So a lot of those costs end up being covered by the locals, which then leads to higher property taxes that most elected officials of both parties would prefer.
b) the state spends a lot more on pensions than most elected officials of both parties would prefer. But those costs are almost entirely made up of payments towards paying down the unfunded liability. The courts have repeatedly ruled now that benefit reductions to reduce that amount are not going to happen. One party has come to the conclusion that we just need to bite the bullet and pay it down while members of the other party seem determined to live in fantasy land.
But if not for that unfunded liability, the state could spend a lot more on education directly, and it would probably not look like we have a spending or revenue problem. (Assuming that state spending on education was actually used to also provide meaningful property tax relief.)
- Mason County - Monday, Mar 23, 26 @ 1:33 pm:
It is up to the GOP to state very specifically exactly what their budget would be. What items/areas would be cut. Until they do that they will look as ‘limited’ as they actually are.
- Annon'in - Monday, Mar 23, 26 @ 1:37 pm:
Ralph always makes too much sense. It is a battle facts and common sense/data and the tradition G(N)OPPIES come unarmed. Then you ask for some specific cuts and after “health care for illegals” they sputter and say “fraud & abuse”. Usually the hymnal turns to “too much regulation” and we turn our view visions to the millions spent on reversing the damage caused by local icons like Pillsbury and The Railroads.
What might happen if Ralph and a few like minded people were put in charge for a few years. Might be fun.
- Sue - Monday, Mar 23, 26 @ 1:48 pm:
As long as nearly 27 percent or so of all state revenues goes toward funding pensions- of course all other spending is impacted- it certainly did not help that the Gov enacted his 1.5 Billion spending on migrant health care( since cut back). For those lobbying for the millionaire tax- Politico( not known for its conservative posts) claimed that MA since if enacted its own version of a millionaire tax has LOST 4 plus billion in tax revenue- people can work or retire where they choose- especially those whose income is a million plus
- Rich Miller - Monday, Mar 23, 26 @ 1:49 pm:
=== 27 percent or so ===
20
- here we go again - Monday, Mar 23, 26 @ 2:03 pm:
Darren Bailey says this is all horse hockey. And ya’ll need Jesus.
- thechampaignlife - Monday, Mar 23, 26 @ 2:12 pm:
===But if not for that unfunded liability, the state could spend a lot more on education directly===
Yep. If we can hold it together for twenty more years, that pension offramp could be huge for our core services, tax relief, and infrastructure simultaneously.
- JS Mill - Monday, Mar 23, 26 @ 2:14 pm:
@Juice- +1 Well stated on all accounts.
@Sue- you offer only “no’s” and nothing that actually addresses the issues that we face. You fit right in with the Darren Bailey’s of the world.
- The Farm Grad - Monday, Mar 23, 26 @ 2:26 pm:
Illinois does need more revenue.
And centrist politicians like Rep. Ro Khanna of Silicon Valley are leading the way through their embrace of wealth taxes on the oligarchy
- Sue - Monday, Mar 23, 26 @ 2:29 pm:
JS- not at all- but given constraints on revenue- Illinois cannot and should not be spending on expanded social spending programs- pay the pensions and then carve up the remaining revenue on must haves- not wish we have programs- Rich- pensions were more then 20 percent last year- I recall 22 which is what I intended- in any event- certainly a mistake to reform Tier 2
- Sue - Monday, Mar 23, 26 @ 2:34 pm:
Farm Grad- if Ro Kohana is a moderate- call me a progressive- he is a leading member of the progressive Caucus- Even Newsom opposes the proposed wealth Tax- if Illinois wants more revenue- raise the existing rate to 5.5- millionaire taxes result in lost revenue- Ask MA
- Rich Miller - Monday, Mar 23, 26 @ 2:41 pm:
===Rich- pensions were more then 20 percent last year===
Wrong again. FY25 actual was 18.8 percent. https://budget.illinois.gov/content/dam/soi/en/web/budget/documents/budget-book/fy2027-budget/Fiscal-Year-2027-Operating-Budget.pdf
- Pundent - Monday, Mar 23, 26 @ 2:41 pm:
=if Ro Kohana is a moderate- call me a progressive- he is a leading member of the progressive Caucus=
Your lack of understanding of the Democratic party, its elected officials and candidates never ceases to amaze. Your recommendations on how the party should govern are comical.
BTW - Soon to be US Senator Stratton says hi.
- Candy Dogood - Monday, Mar 23, 26 @ 2:46 pm:
===Discuss. ===
I’m tired, boss. Over, and over, and over again we have these conversations about the state budget with people that do not live in reality that run on what decades of think tank [redacted] that has trained people who identify as conservative as to treat fictitious nonsense as Barnum statements.
Bailey and his ilk do not have any real or meaningful budget polices and it’s not just grifting baffoons that produce this false bill of budget goods when they run, it’s grifting billionaires too. Bruce Rauner who failed to cut spending and failed to introduce or pass balanced budgets producing documents with line items for savings that were the kind of mission statements that only exist in the pitch books of vulture capitalists.
Government is serious business. It is hard to do and incredibly hard to do well. That’s why the Illinois GOP is in the sorry state they’re in. They’re just not up to the task and can’t convince folks that we’d all just be better off without any schools and roads that are paved with gumption. So there they sit. Loud, proud, and bigoted while other people govern to the best of their abilities. Fantasy budgets and unsubstantiated delusions that let loud complaints stand in for real budgeting discussions are the business of the Illinois GOP.
- Candy Dogood - Monday, Mar 23, 26 @ 2:54 pm:
===pay the pensions and then carve up the remaining revenue on must haves===
Just because grandma and grandpa refused to pay the total bill for the government services they received and will seek to destroy anyone that suggests taxing federally taxed retirement income to help pay the tab for their services does not mean that the responsible solution would be to screw over the next generation of Illinoisans.
Illinois is, Illinois was, and Illinois will be. Screwing over the Illinois that will be because the Illinois that was refused to pay taxes and screwed over the Illinois that is can’t be considered a responsible or prudent decision.
Burning the house to the ground shouldn’t mascaraed as a reasonable solution to a termite problem.
Come up with a policy proposal that isn’t a book of matches and a gallon of gasoline.
- Rich Miller - Monday, Mar 23, 26 @ 3:02 pm:
===FY25 actual was===
Add in the Chicago teachers pension fund money and it’s 19.45 percent.
In other words, you’re still wrong.
- Techie - Monday, Mar 23, 26 @ 3:12 pm:
Good to have a reminder from a big-picture guy like Ralph Matire.
Many years ago, probably anywhere from 2012 to 2018, I saw him speak at an event hosted by Rep Kifowit and he said very similar things back then. It’s as true now as it was then.
- JS Mill - Monday, Mar 23, 26 @ 3:24 pm:
=Many years ago, probably anywhere from 2012 to 2018, I saw him speak=
Martire has been saying the same thing since the very early 2000’s. I listened to him present multiple times in 2004/2005.
=JS- not at all-=
All evidence to the contrary.
=but given constraints on revenue- Illinois cannot and should not be spending on expanded social spending programs=
Pritzker has been far more successful than any other governor at reigning in spending on new programs. (You can exclude rauner from that since he went without budgets three out of his four years as governor. He expanded spending through interest payments though.)
It used to be that any time there was a new penny of revenue it sure seemed like the ILGA was trying to add programs. Most were well intended but never seemed to have a funding stream to keep them affordable.
= to help pay the tab for their services=
Illinoisans, like most states, regardless of -party want services and don’t want to pay for them. Hence the legacy debt that consumes something like $6 Billion annually (I might be a few billion low on that estimate).
- Sue - Monday, Mar 23, 26 @ 3:37 pm:
Rich- it is worth noting that for the most recent year at least for TRS- total benefits paid were 8.5 B- State contribution was 6.2 B- member contributions ( mostly paid by District Employers) was 1.25 B and direct school district payments 123 million- even with the State paying 6.2 the deficit of total contributions to benefits paid runs currently at 1.225 Billion and the number is growing as the payroll increases every year driven by retirements and the COLA- The State has rarely paid in the actuarial number but pays the legislative figure which is significantly less- this all goes to evidence that Tier 2 reform would be a huge mistake as the System is already subsidizing payroll with earnings- thus the funding liability though as a percentage improved- it got worse in terms of the actual amount unfunded even with last year’s 9.7 percent return
- Mason County - Monday, Mar 23, 26 @ 4:35 pm:
Besides pension the other big 9and even bigger) budget item is Medicaid. Obtained the following info from Insurancenewnet.com. Look legit.
In FY 2025, according to the Department of Healthcare and Family Services, Illinois spent a total of $33.7 billion through its Medicaid program, making it one of the single largest categories of expenditures in state government.
Of that total, $20.9 billion, or 62%, was federal money while the remaining $12.8 billion came from state funds, including both general revenue and provider taxes.
IGPA reported that provider taxes in FY 2025 amounted to $4.7 billion, or about 37% of all the state funds that were spent on Medicaid. The bulk of that money, according to DHFS, came from two provider taxes, those on hospitals and MCOs.
A recent report by the nonpartisan health policy research organization KFF points out that Illinois stands to lose more than any other state when the reductions take effect because it is the only state whose hospital and MCO assessments are both above the 3.5% threshold.
The report by IGPA estimates that when the first reduction takes effect in FY 2028, revenues from those two assessments alone will fall $239 million. And depending on how much health care prices and Medicaid usage grows over the next five years, total reductions from those two sources could range from $1.25 billion to $2 billion by FY 2033.
- Juice - Monday, Mar 23, 26 @ 5:13 pm:
Sue, I don’t understand your point about how much in benefits were paid out by TRS, since that is not the main factor contributing to the state’s contribution to the system regardless of whether we had a closed 30 year funding schedule to get to 100% of funding necessary or the existing statutory scheme (90% by 2045, minus the debt service on the 2003 POBs).
If TRS were 100% funded, the amount in benefits paid out would be like 10 times what the state is contributing. The investment returns on what is in the system do in fact matter. So just complaining about of the amount of benefits paid is kind of irrelevant, other than the fact that previous legislatures and governors did not appropriately fund the system.
- Anyone Remember - Monday, Mar 23, 26 @ 8:47 pm:
“Besides pension the other big 9and even bigger) budget item is Medicaid.”
In Thompson’s last budget (FY 1991), the main budget book was written from the Bureau of the Budget perspective. It identified Illinois’ budget problems as “the 3 Ps - Pension, Prisons, Public Aid. If a copy could be found (IL State Library? long-time press member?), it is worth your read.
- Frida's Boss - Monday, Mar 23, 26 @ 10:17 pm:
So I know this may not be popular but how much has the social services portion of the budget increased? Every year there are new programs being pushed and supported by the majority party. Rauner gutted the safety net but I believe it has come back in spades. Every year, the leaders say to the GA that if it needs revenue, you have to find or address it, no more, subject to appropriation. So has anyone actually studied how much that line is and how much it’s increased since JB came into office?
- Rich Miller - Monday, Mar 23, 26 @ 11:14 pm:
=== So has anyone actually studied how much that line is===
It’s not a line. It’s a bunch of stuff. It’s also featured above in the main body.
Maybe go visit Ralph’s website.