Analysis of Illinois' FY 2022 Proposed General Fund Budget
March 10, 2021
The FY 2022 Proposed General Fund Budget (the “FY 2022 GF Proposal”) makes one fact abundantly clear: spending on services is not driving the state’s fiscal problems. After acknowledging bolder plans for the upcoming fiscal year, Governor Pritzker ultimately proposed spending $27.748 billion on public services, which is roughly the same in nominal dollars as FY 2021. After adjusting for inflation, however, the total amount of spending on services proposed for FY 2022 would be $434 million less in real terms than in FY 2021.
Which means the often repeated contention that Illinois’s fiscal problems are caused by profligate spending on services is simply not supported by the data. Indeed, quite the contrary is true. As Governor Pritzker noted during his budget address: “Illinois state government already spends less money per person than the majority of states in the nation.”
Big picture, Illinois’ ongoing disinvestment in General Fund services is harming communities across the state for one simple reason: over 95 percent of all such spending goes to the four, core areas of Education (including Early Childhood, K-12, and Higher Education), Healthcare, Human Services, and Public Safety.
So what drove Illinois to embark on its long-term course of disinvesting in core, General Fund services? A structural deficit caused by flawed tax policy that generates inadequate revenue growth over-time; and the unaffordable back-loaded schedule for repaying the debt the state owes to its five public pension systems.
Of course, a portion of the state’s deficit problems will resolve themselves once the revenue shortfalls caused by the pandemic end. That said, the crux of Illinois’ fiscal problems have nothing to do with COVID-19, and everything to do with the long-term, structural deficit driven by the state’s flawed tax policy.