On February 21, 2024, Governor Pritzker announced his proposed General Fund budget for FY 2025 (the “FY 2025 GF Budget Proposal”). The FY 2025 GF Budget Proposal makes two things clear about the state’s finances. First, the General Fund is the healthiest fiscal condition it has been in for decades. That’s the good news. Second, the state’s structural fiscal problems, which were somewhat masked by one-time federal financial assistance provided during the pandemic, as well as the strong economic growth that followed, are re-emerging. And that’s the bad news.
Overall, the state’s fiscal condition has definitively changed for the better since Governor Pritzker was first sworn into office in 2019. In 2019, Pritzker inherited an $8 billion backlog of unpaid bills from Governor Rauner’s Administration. A budget hole of that size meant roughly 30 percent of all General Fund expenditures during Rauner’s final year as governor constituted deficit spending. Unfortunately, that deficit under Rauner was also nothing new. For more than two decades prior to Pritzker’s inauguration, Illinois had failed to produce anything close to a balanced budget in its General Fund.
Governor Pritzker changed all that by being a responsible fiscal steward of the state’s finances. Yes, over the past few years Illinois received significant pandemic-related financial support from the federal government, totaling some $4.95 billion, that helped shore up the General Fund during the pandemic. The state also realized around $4.3 billion in unexpected revenue growth in FY 2023. This was primarily due to a combination of factors including the robust economic recovery that followed the pandemic, and corporations taking advantage of a 40‑year high in inflation to price gouge, and thereby generate record profits. The FY 2025 Proposed GF Budget analysis takes an in depth look at Illinois’ revenue and spending in the General Fund for the upcoming fiscal year.
