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Rauner’s changing story on the new budget’s deficit

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Illinois

* The Civic Federation takes a look at whether the FY18 budget is balanced…

The Governor’s Office has not yet made public a budget grid for FY2018 detailing revenues, expenditures and budgetary balance. The FY2018 budget plan distributed by the General Assembly in July showed general operating revenues of $36.4 billion and expenditures of $36.1 billion. The projected surplus of $360 million amounted to less than 1% of expenditures. […]

The narrow surplus shown in the table depends on several uncertain developments. As in the Governor’s proposed FY2018 budget, the legislature’s budget relies on the sale of the James R. Thompson Center in Chicago, with an estimated sale price of $300 million and net proceeds after expenses of about $240 million. The surplus could be reduced if it takes longer than expected to find a buyer or if the structure is sold for less than the projected price.

In its Budget Implementation Act (BIMP), the General Assembly also adopted a pension proposal by the Governor that makes universities and school districts outside Chicago—instead of the State—responsible for pension costs for new employees. The change is expected to save the State $500 million per year, as the reduction in future pension liabilities leads to a sharp decline in current contribution requirements under the State’s funding formula. However, the legislature left timing of the plan’s implementation up to the Teachers’ and State Universities Retirement Systems, raising questions as to how much of the savings will be realized in FY2018.

* But then it also picks up on something that’s gone mostly unnoticed…

In his veto message on the legislature’s FY2018 budget, Governor Rauner stated that the financial plan was $2 billion out of balance. The news release announcing plans for the bond sale put the operating gap at more than $1 billion.

State budget officials said the deficit estimates covered estimated pension savings as well as certain FY2017 costs, such as day-to-day agency expenses, that have not been accounted for and may need to be appropriated in the FY2018 budget. Although the larger deficit estimate included FY2017 group health insurance costs, the legislature’s budget assumes that these bills will be paid from borrowing.

posted by Rich Miller
Thursday, Sep 14, 17 @ 9:17 am

Comments

Too bad Rauner vetoed the budget, in its entirety… less the K-12 School Funding “victory”

“The Budget surplus? Rauner vetoed the budget, the budget that was a veto-overriden budget”

The bond sale, something Rauner first balked at, might be a solid avenue, but then isn’t that more borrowing to produce that surplus? Rauner might have to square that too.

Comment by Oswego Willy Thursday, Sep 14, 17 @ 9:28 am
The bond sale is just trading high interest immediate debt for longer term lower interest debt. Same debt amount, just different terms.

Comment by RNUG Thursday, Sep 14, 17 @ 9:33 am
Different terms, such as lower interest rates, lower overall costs and lower payments.

Comment by Oh Boy Thursday, Sep 14, 17 @ 9:34 am
Meh, Rauner’s statements are like the weather — wait ten minutes and it will change.

Plus, math is hard. Who knew that simple majority and super majority weren’t the same thing?

Comment by wordslinger Thursday, Sep 14, 17 @ 9:40 am
I am shocked that the governor’s statements were not laser accurate and are…ummm…evolving. Who knew the BTIA whiz kids couldn’t do math?

Just shocked. /s

Comment by JS Mill Thursday, Sep 14, 17 @ 9:44 am
Best Team In America™

Comment by Precinct Captain Thursday, Sep 14, 17 @ 10:23 am
He’s quite a business man/s

Comment by Flynn's mom Thursday, Sep 14, 17 @ 4:23 pm