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* Background is here and here if you need it. Bloomberg: “Illinois risks budget cuts when pandemic aid ends, report says”…
Twelve states in the US, including some of the country’s largest economies, are at risk of cutting or scaling back programs in essential areas like education and public safety when the federal government’s historic stimulus package expires in 2026.
California, New York, and Pennsylvania, alongside nine others, used federal stimulus money to cover recurring costs that totaled 2.5% or more of their general fund expenditures in fiscal 2022. They could face budgetary gaps because of that spending, forcing government leaders to rethink certain programs and jobs, according to an analysis of disclosure filings as of July 2022 released Tuesday by The Volcker Alliance, a nonprofit research group. […]
“A lot of states have major issues. Illinois is dealing with refugees and wanting to provide health care for them,” said Beverly Bunch, a professor at the University of Illinois Springfield and author of the report. “That’s coming at the same time that some of these federally funded programs are being exhausted, and that makes it even more challenging.”
So much misinformation. Where to begin? Let’s start with an easy one.
* I was under the impression that asylum seekers qualified for a federal healthcare program, so I checked with the governor’s office. Jordan Abudayyeh..
Asylum seekers are in the U.S. with documentation and therefore qualify for federal healthcare programs.
The HBIA/S programs that cover healthcare for undocumented people are separate from spending on asylum seekers.
It is unfortunate the reporter used the quote and did not fact-check it to ensure the accuracy of their reporting.
*facepalm*
* OK, let’s move on to the budget aspect. From the Volcker Alliance’s actual report…
In at least two states—Illinois and New York—the use of SLFRF [Coronavirus State and Local Fiscal Recovery Funds] for operations appears to have freed up own-source recurring revenues that were then applied, at least in part, to one-time purposes: debt repayment (Illinois) and rainy day fund contributions (Illinois and New York). Those states may be able to use those state revenues in the future to cover costs that were temporarily financed with SLFRF.
Emphasis added.
Also, according to the report, Illinois has already allocated all of its federal SLFRF funds. That means the alleged “fiscal cliff” period has already come and gone.
* Back to Abudayyeh…
It’s time “budget experts” and the press catch up with the times and stop using the old assumptions that Illinois is on the brink of fiscal calamity at all times.
The Volcker author was using an outdated 2022 report and making assumptions from that about what the state of Illinois could claim in revenue loss, but not what we actually claimed, which was less. Illinois did use $1.8 billion of ARPA recovery funding for revenue replacement as allowed by Congress and federal rules for use of the funds during fiscal year 2022 and fiscal year 2023 – two years that are already in the past. FY24 General Funds budget is balanced and does not use any of these federal recovery dollars in the budget. So Illinois is already beyond the theoretical ‘cliff’ and the hypothetical situation analyzed by the Volcker report did not occur.
Additionally, Illinois used approximately half of its recovery fund dollars ($4.06 billion) for repayment of Unemployment Insurance trust fund advances – a one-time expenditure to help stabilize this critical fund that was hit hard by the pandemic. Illinois was wise in its use of federal funding, funded one-time expenses, and took fiscally responsible steps during a time that devastated economies worldwide.
Yeah, that’s a bit over the top. But when a national news media outlet quotes a proclaimed budget expert getting so much wrong, including about her very own group’s report, I’ll allow it.
posted by Rich Miller
Thursday, Sep 28, 23 @ 9:59 am
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Previous Post: Open thread
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“Volcker” and “outdated” are economic peas in a pod.
Perhaps Bloomberg can reach out to Milton Friedman for comment next.
Comment by Roadrager Thursday, Sep 28, 23 @ 10:07 am
Appreciate you taking the time to debunk, Rich.
It’s one thing when the 3-man Trib ed board gets something wrong. You expect it as they are trying to do a job they don’t have the resources to do correctly. Not to excuse their frequent mistakes and reasoning based on faulty premises, they should just shut down that part of the operation.
Bloomberg has vast resources and has no excuses for such sloppiness. By grinding out content with no accountability it’s polluting the public discourse.
Comment by Moe Berg Thursday, Sep 28, 23 @ 10:16 am
Misinformation of this kind of presentation seems far too unlikely to be accidental.
It’s disappointing that facts aren’t the goal.
Comment by Oswego Willy Thursday, Sep 28, 23 @ 10:18 am
===Misinformation of this kind of presentation seems far too unlikely to be accidental.===
Yeah. I changed the original headline from “disinformation” to “misinformation.” Probably a mistake on my part.
Comment by Rich Miller Thursday, Sep 28, 23 @ 10:22 am
Bloomberg’s reporting is like a lot of journalism today. It starts with a conclusion and then looks to stitch “facts” together to support it. It should not be mistaken for real journalism but often is.
Comment by Pundent Thursday, Sep 28, 23 @ 10:27 am
Exceptionally strong leadership in both Executive and Legislative branches made the right choices in a recovering economy. I trust ratings agencies are better informed than Bloomberg.
It might be true that we are beyond any “fiscal cliff” caused by misuse of temporary “recovery” funds (unlike many other government bodies), but we will have equally challenging budgeting choices as national economic growth flattens out. It never gets easier.
Comment by walker Thursday, Sep 28, 23 @ 10:28 am
===It starts with a conclusion and then looks to stitch “facts” together to support it===
Most every story Bloomberg has moved on Illinois and Chicago recently has done exactly that.
===equally challenging budgeting choices as national economic growth flattens out===
Not sure if it’ll be “equally” challenging, but yeah. And had the “expert” said that, it would’ve been at least close to accurate. She didn’t and neither did the reporter.
Comment by Rich Miller Thursday, Sep 28, 23 @ 10:32 am
Forget Bloomberg- the monies the State is spending on migrant housing and JB’s medical care need to come from somewhere. It’s not millions but more likely north of a billion. Someone’s program will be adversely hit in order to continue paying for the endless stream of people. The answer should be curtail the problem at the source but that’s not likely
Comment by Sue Thursday, Sep 28, 23 @ 10:52 am
@ Sue
Yes, that money does come from somewhere, and it does serve the human needs of human communities that are in need. In your example, we are discussing refugees and asylees - people who are welcome to come to America according to the 1965 Immigration and Naturalization Act, and for whom we have a moral (and legal) obligation to serve their needs as they await immigration hearings.
Would you suggest we not feed them, house them, tend to their injuries and medical ailments?
Nearly all of this need is intended to be funded by the Federal Government, regardless of where these refugees and asylees locate. Presently, some southern states are refusing to take in anymore “huddled masses yearning to breathe free.” They are shipping these people elsewhere, on the basis of pure political reasoning.
A better solution would involve the Federal government determining where to create accommodations for these legally entitled people (i.e.; the Immigration Act of 1965) who were once welcomed here (my Polish Grandfather in 1913; my Irish Grandmother’s parents in 1890; both of whom came to Chicago).
You seem to suggest America (and Illinois) can no longer afford to welcome immigrants. Could you explain why you believe that?
Comment by H-W Thursday, Sep 28, 23 @ 11:47 am
==Someone’s program will be adversely hit in order to continue paying for the endless stream of people.==
Right, and Greg Abbott is trying to make sure it’s not his oil subsidies that take the hit.
==The answer should be curtail the problem at the source but that’s not likely==
Well, Illinois policy makers can’t really do much about the Governor of Texas.
Comment by Arsenal Thursday, Sep 28, 23 @ 12:14 pm
===The answer should be curtail the problem at the source===
Exactly right. There has been very little public debate about the problems in Venezuela and the US sanctions. Start there.
Comment by Rich Miller Thursday, Sep 28, 23 @ 12:26 pm
Has anyone contacted the author at UIS for a comment?
Comment by G'Kar Thursday, Sep 28, 23 @ 1:23 pm
UIS and its esteemed public policy institute should be plenty embarrassed by this. Will it respond or take any action whatsoever?
Comment by Original Rambler Thursday, Sep 28, 23 @ 1:37 pm