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Gov. J.B. Pritzker today unveiled a state budget that ties education support, pension funding and other programs to the fate of a constitutional amendment authorizing a graduated income tax to pay for more spending.
"Our choices remain hard," he told lawmakers in prepared remarks, "our financial situation challenging."
The total cost of the state budget is $42 billion.
The Democratic governor touted accomplishments of his first year in office, including a billion-dollar reduction in the $8 billion backlog of unpaid bills and contributions totaling $100 million to the rainy day fund for the first time in more than a decade. He promised $350 million more in "equitable funding" for K-12 schools, addressing "our ignominious distinction as the worst state in the nation for state funding of public education."
However, he cautioned: "To address the uncertainty in our revenues, this budget responsibly holds roughly $1.4 billion in reserve until we know the outcome in November. Because this reserve is so large, it inevitably cuts into some of the things that we all hold most dear: increased funding for K-12 education, universities and community colleges, public safety and other key investments—but as important as these investments are, we cannot responsibly spend for these priorities until we know with certainty what the state’s revenue picture will be."
Ralph Martire, executive director of the Center for Tax & Budget Accountability, took issue with some of Pritzker's claims, including how much he's shaved off the bill backlog and how aggressive he's been with pensions. An appropriate rainy day fund would be on the order of $2.5 billion, he said.
Yet, Martire added: "Clearly he's recognized your revenue restricts your capacity to spend—but that's a good thing. . . .You have to applaud a governor who wants to spend more who is actually putting into place actions that support his rhetoric."
Republican leaders took issue with the blueprint, as did some independent observers.
"The governor’s proposed budget does not live within our means, and is a spending plan full of false promises that relies on him getting his tax increase," Senate Minority Leader Bill Brady, R-Bloomington, said in a statement.
Carol Portman, president of the Taxpayers' Federation of Illinois, noted the proposed $100 million addition to the rainy day fund is "less than one day’s worth of spending, so more will be needed. This is a good start, but only a start."
Pritzker used his address to again call for passage of what he dubs the Fair Tax constitutional amendment, which he says would increase taxes only on the top 3 percent of taxpayers and help meet pension obligations. For the first time ever, he said, the state next year will make its required pension payment "and then some."
Portman said: "If that (amendment) fails, it’s likely that some of the significant cuts contemplated in the proposed budget will prompt talks of raising additional revenue or other budget gimmicks, so we might be having another round of budget conversations this year. We’ll have to wait and see."
At the same time, Pritzker termed "fantasy" another potential remedy to the pension crisis: a constitutional amendment to cut retiree benefits.
"The idea that all of this can be fixed with a single silver bullet ignores the protracted legal battle that will ultimately run headlong into the contracts clause of the U.S. Constitution. You will spend years in that protracted legal battle, and when you’re done, you will have simply kicked the can down the road, made another broken promise to taxpayers, and left them with higher tax bills."
To what is considered the state's most troubled agency, the Department of Children & Family Services, Pritzker said he's providing more personnel and money. The fiscal 2021 budget adds 150 staffers on top of 300 hired over the last year for an 11 percent increase over two years. Funding will climb 20 percent during the period, he said, and payments to contracted agencies will rise 4 percent in the next fiscal year.
"There are no overnight fixes for DCFS, no easy promises that can be made, no simple solutions for an agency that deals with some of our most complex societal problems," he said. "Every staff person, from top to bottom, is being retrained."