From Wirepoints:
No cuts, record spending, and hoping for a bailout. Six things you need to know about Illinois’ 2021 budget. – Wirepoints
By: Ted Dabrowski and John Klingner
The Illinois General Assembly has finally passed an emergency budget for 2021 after not being in session for two months. Tax revenues have taken a severe hit due to the impact of the shutdown in response to COVID-19, yet that hasn’t stopped lawmakers’ spending priorities.
The state will spend a record $42.9 billion while bringing in just $36.8 billion.
Lawmakers are counting on a combination of federal loans and grants to fill the expected, official $6 billion deficit. It’s important to keep in mind that the state’s deficit is several billion dollars larger when the true costs of the state’s retirement costs are included.
Lawmakers did not include any potential revenues from Pritzker’s proposed income tax increase in the budget.
Here’s what you need to know about the 2021 budget numbers:
1. Record spending. The state plans to spend $2.5 billion more than its most recent 2020 spending estimates, a 6.2 percent increase. The new budget spends $42.9 billion in 2021 vs. the estimated $40.4 billion in 2020. That’s the state’s largest budget ever.
2. A $6 billion deficit. Lawmakers plan on spending far more than the $36.8 billion the state estimates it will take in. Income and sales taxes will be the most impacted by the shutdown. The deficit for 2021 totals $6.1 billion.
3. No cuts, no furloughs. The budget contains no government worker salary cuts or employee furloughs to provide tax relief for Illinois’ struggling private sector. More than one million Illinoisans are unemployed. In contrast, other states across the country are cutting operational costs. California, for example, recently announced plans to cut worker salaries and public education by 10 percent.
4. Counting on a bailout. The legislature expects to access a $5 billion short-term loan from the Federal Reserve to plug the majority of the deficit. Lawmakers are assuming they’ll be able to use federal grants from the HEROES Act to repay the loan.
5. Retirement costs swallow more spending. The 2021 budget spends $11 billion on official state retirement costs. That will consume almost a third of the state’s own-source revenues.
6. The deficits aren’t what they say they are. Lawmakers might say the 2021 deficit is $6.1 billion, but the real number is far larger. True actuarial pension costs would add another $4 billion to the budget, while retiree health insurance costs would add at least $2 billion more. It’s this kind of accounting that’s led to the massive debt build up over the past three decades.
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Never mind the state of the economy, the record unemployment and the continuing COVID-19 crisis. With this budget, lawmakers have created an even bigger burden on the state’s private sector.
Some lawmakers argue that a record budget is needed because of the crisis. For sure there are essential parts that need more resources to deal with the pandemic, but that doesn’t mean that the rest can’t be delivered more cheaply. Public sector pay cuts and furloughs are needed to provide relief for the millions of private sector residents who have been devastated by the crisis and must pay for those public services.
There’ll be plenty more to say about this budget over the next few days and months, but consider it just the next step in Illinois’ long-running mismanagement…more borrowing, no cuts and big deficits. And this time, hope for a bailout.
Take a long hard look at those top two expenditures and your recently received Property Tax Bill.
Education is ripe for a Amazon vs Shopping Mall reckoning and Quarantine Zoom Classrooms are the start of that reckoning.
Your already seeing it with edx and Udacity.
Teachers Unions will never allow Zoom Classrooms to be the future of Education, they’re so tied into and in control of the Dem Party they can never even say the words “Pension reform”.
Sure there are other State jobs and organizations that contribute to the Pension retirement problem, but they cant be so easily and instantly changed as the Education System and delivery methods of it, as the Teachers and their fat pensions can.
Read today 98% of current “Education expense” could be eliminated with Zoom like and mentor training as the future for Education—wont happen in our lifetimes, teachers and dems too greedy for money and power–in that order.
Sad.
Meanwhile Property Tax bills, state income and sales taxes will climb for the rest of us to fund this nonsense.
Word to the wise, get a Govt job, forget the Private sector in Illinois.
Even County Jail guards and other County jobs make 6 figures and fat pensions.
Most Private Sector jobs get neither.
Pension Reform should be the mantra but it wont even be uttered in our lifetimes.
This latest State Budget proves it out.
It will accelerate when a few million college kids, after being forced to spend a semester doing classes on-line.
Begin wondering, if it’s worth $20-$40 K a year in financed debt, for that whole campus Harry Potter thingy.
Illinois class stratification defines two distinct categories: those who can begin collecting pension benefits a decade earlier than social security, the amount of those benefits will be 300%-400% or more than social security, the employees’ contributions toward said benefits are less than 4% (often zero) of salaries (as opposed to 2nd class citizens’ 6.2% contributions to social security for the same 10 years plus an additional decade), and a big one: free health insurance at early retirement mid-fifties….versus second class Illinois citizens obligated to pay for these first class citizens’ entitlements and who have no safety nets for their own retirement.
Illinois first class citizens have shown contempt and indifference toward the fates of second class citizens whose tax burdens drain their household income at rates unparalleled in America, and whose home values relentlessly depreciate year after year as a result of the policies rewarding first class citizens at the expense of second class citizens.
So what, right?
Well until now, yes, so what.
But a significant portion of the second class is medical professionals. They pay State income taxes, more than many professionals. They pay property taxes on nice homes.
And they are beginning to question whether their professional duty to elongate the lifespans of sociopathic predators in the Illinois first class of public entitlement is even ethically supportable.
Yeah, more lies. I get it.
Why should a lawless STATE get a bailout when they keep up the corruption and breaking the law
If I were the President no way no how would I give these lawbreakers a penny! ever!
And if your going to continue with corruption, then go big or go home if you want ballot only then there should be Jury duty by ballot as well !
no contact at all..
if that is the reason for this BS excuse so they can get more votes in from FAKE and illegal people.
Garbage in Garbage out.
Just keep on a going over your head fred flintstone …
Something doesn’t add up.