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Civic Federation Cannot Support Governor’s FY2018 Budget

Posted on May 09, 2017

Civic Federation urges governor and legislators to pass comprehensive, balanced budget

(CHICAGO) – In a report released today, the Civic Federation’s Institute for Illinois’ Fiscal Sustainability announced it cannot support Illinois Governor Bruce Rauner’s recommended budget for FY2018 because it has an operating deficit of at least $4.6 billion and does not address Illinois’ massive backlog of bills. The Institute’s full 86-page report is available here.

For nearly two years, Illinois has operated without a comprehensive budget, during which time the State’s credit rating has fallen to near-junk status and unpaid bills have continued to climb. Judicial mandates, full-year appropriations for elementary and secondary education and the questionable payment of State employees without appropriations have removed pressure on lawmakers to compromise on a full spending plan.

“Operating Illinois on autopilot is not a solution, nor is it sustainable. Rather, it represents an abdication of the most basic constitutional responsibilities of proposing and passing a balanced budget,” said Civic Federation President Laurence Msall. “The Governor and General Assembly need to end this unacceptable stalemate by passing and enacting a comprehensive plan. Cherry-picking certain areas of government to fund while pledging to work toward a complete budget sometime in the abstract future has not and will not end the crisis and in fact is making it worse.”

Unfortunately, Governor Bruce Rauner’s recommended budget for FY2018 does not offer a sufficiently detailed plan to address the State’s immense financial problems. To close the deficit of $4.6 billion, it relies on uncertain savings, one-time revenues and a bipartisan agreement in the Illinois Senate, the provisions of which are in flux and likelihood of passage is unclear.

Further, the Federation cannot support a budget proposal that would allow the backlog of unpaid bills to increase to $19.7 billion if the gap is not closed. Because of the backlog, the State begins each fiscal year in a hole, using revenues from the current year to pay off the previous year’s obligations. A $19.7 billion backlog at the end of FY2018 would represent more than half (58.1%) of estimated FY2019 General Funds revenues.

The Civic Federation continues to recommend a comprehensive plan including spending restraints and increased revenues. Spending controls are at the center of the Federation’s plan, but significantly more revenue is needed to help reduce the deficit in FY2017 and close the gap in FY2018 without drastically changing the scope of State government.

The Federation’s plan proposes borrowing to pay off the backlog of bills, but only in the context of a balanced FY2018 budget, a credible plan to maintain fiscal sustainability, restriction of the bond proceeds to eliminating the backlog and the payment of debt service with revenues not otherwise needed to balance the budget.

“Springfield’s spectacular failure to pass a budget continues to do unprecedented harm to Illinois residents, especially the elderly, students, the mentally ill and any person or business that hopes to build a future here,” said Msall. “Therefore the Civic Federation calls on lawmakers to reject any attempt to pass standalone K-12 spending, payment of non-emergency workers or any piecemeal approach that impedes progress on a comprehensive plan.”

Click here to read the full report.