All Press Items

February 20, 2024

Funding challenges from the migrant crisis and immigrant health care to boosting early childhood education butt up against a projected shortfall of almost $900 million in the coming fiscal year as Gov. J.B. Pritzker prepares to give his sixth budget address on Wednesday.

The Democratic governor’s scheduled speech before the Illinois General Assembly follows his pledge last week to allocate $182 million in the next budget year for shelter and other services for asylum-seekers in the Chicago area. The proposed investment came just a few months after the Pritzker administration announced it was taking $160 million from the current budget to address the ongoing crisis.

It will be up to Pritzker’s allies in the Democratic-controlled General Assembly to approve a spending plan that takes the migrant crisis into account. The issue has spurred some intraparty disagreements over whether too much public money is going to the new arrivals and not enough is going to U.S. citizens who live in impoverished communities around the state.

The House Democrats’ top budget negotiator, Rep. Jehan Gordon-Booth, said “we’re going to continue to listen to our caucus” about how to balance funding for the migrant crisis with other needs in the state, including public safety, education, workforce development and violence prevention programs.

“There’s no denying that there’s a major issue at the border being driven by a humanitarian crisis in Central and South America. We know that what we’re seeing in Chicago and some of the surrounding suburbs, sadly, is a result of politicians using human beings to distress a situation,” the Peoria legislator said. “But here we are. And we have to deal with the hand that we have been dealt.”

Echoing a position often voiced by Pritzker, Gordon-Booth said the migrant crisis needs to be addressed in Washington and “it’s unrealistic to think the state is going to be able to tackle and fix something that only the federal government is going to have the ability to fix.”

The $182 million Pritzker is seeking would cover a little more than half of the $321 million that state, Cook County and Chicago officials estimated is needed for migrant “shelter and services” this year, according to the governor’s office. Still, the cost to the state would be relatively small compared with other major issues confronting the governor, said David Merriman, a public policy professor at the University of Illinois at Chicago and an expert on state finances.

“The governor is probably wise politically to target that because it has big visibility, but the dollar is doable,” Merriman said.

But, as with most of his initiatives, Pritzker figures to get little support from Republicans on migrant spending, who say the crisis was created by Democrats.

“We want to see a budget that prioritizes making our state a safer, more affordable place for Illinois citizens to work and live,” Senate Republican leader John Curran of Downers Grove said in a statement. “Illinois’ budget priorities must be focused on lifting up Illinois families and businesses, rather than continuing to fund the disastrous migrant crisis created by Gov. Pritzker and Mayor (Brandon) Johnson.”

House Republican leader Tony McCombie of Savanna earlier this month said there has to be a limit on the number of asylum-seekers coming to Illinois. The majority of the migrants are being sent to Chicago by Republican Texas Gov. Greg Abbott.

“OK, they’re here. We have to take care of what is here today,” she said from her office in the state Capitol. “We do not have the services that can accommodate this influx of folks coming here.”

While Pritzker often keeps details of his budget address under wraps until hours before his speech, he’s so far not only disclosed migrant response funding as a priority but also has hinted at more money for early childhood education, an ongoing priority of his administration.

In recent weeks, Pritzker has traversed the state to tout his “Smart Start Illinois” initiative, which was funded last year with $250 million and aims to improve access to child care and early childhood education. On Feb. 13, Pritzker told an audience at Youth Services Network in Rockford that he could spend all of his time working on early childhood issues “and it would be the light of my life.”

“I know that it’s boring to talk about budgets,” Pritzker said at an early childhood event this month in DuPage County. “But it is truly the state budget that, if we balance it, allows us to invest in the things that really matter.”

The latest report from the legislature’s bipartisan Commission on Government Forecasting and Accountability showed state revenues through seven months of the fiscal year that began last July were up just 0.2%, or $56 million, from the same time frame a year ago. Still, the overall revenue picture “continues to be in a solid position,” according to the report.

The governor’s office has said it expects to end the budget year this coming June 30 with a surplus of $422 million. Late last year, state officials touted Illinois’ ninth credit rating upgrade within a two-year period, allowing the state to borrow money at a lower interest rate than before and potentially enjoy millions of dollars in savings.

But for the budget year that begins July 1, the governor’s office in November projected a shortfall of $891 million based on pension contributions and other costs rising faster than projected revenue. That figure could need to be made up through some combination of spending cuts or tax increases.

Ralph Martire, executive director of the left-leaning Center for Tax and Budget Accountability, said he expects “a slightly more austere budget” this year compared to the last couple years.

“The structural deficit is going to rear its ugly head again this year,” Martire said. He speculated the proposed answer will likely be relatively smaller investments in certain services, rather than tax increases. And while revenue from federal and corporate taxes may be less than in recent years, the effects of that will be somewhat mitigated by the softer-than-expected economic landing from the pandemic, Martire said.

Eric Kim, senior director at Fitch Ratings, said the outlook for the state’s credit rating continues to be stable.  Fitch is closely watching the budget proposal not just for what Pritzker proposes for next year, but also as an update on the current outlook for the state’s finances, he said.

Gordon-Booth said the state has made large pension payments in a couple of past budgets that have helped reduce the state’s overall liabilities. She said the governor’s speech, for her, will serve as a baseline going into this year’s budget negotiations.

“We want to be mindful of what it means to make good decisions relative to our spending,” she said. “We don’t have to look too far in the past to understand what happens to everyday Illinoisans when tough decisions aren’t made and when tough conversations aren’t had.”

Last year, the budget process was far from smooth for Pritzker and his Democratic allies in the legislature despite the party having maintained or expanded its supermajorities in the House and Senate in 2022. The legislature’s self-imposed May 19 adjournment deadline had to be extended because Pritzker, Democratic Senate President Don Harmon of Oak Park and House Speaker Emanuel “Chris” Welch failed to broker a budget deal in time.

Welch, who replaced longtime Speaker Michael Madigan in 2021, found himself struggling to preserve unity among the 77 House Democrats he oversees, as racial and ethnic caucuses gained power and a divide emerged between progressives and moderates.

Welch’s office declined to make him available for an interview ahead of Pritzker’s budget speech. Harmon in a statement said his top personal priority this year “is to pass another responsible, balanced budget” but wouldn’t comment on the specifics ahead of the governor’s address.

A key point of contention during last year’s budget negotiations was how to manage a state-funded health care program for noncitizens who are in the U.S. without legal permission or who have green cards but haven’t completed a five-year waiting period and are therefore ineligible for the traditional health insurance program for the poor, which is jointly funded by the federal government.

Pritzker’s spending plan last year estimated the cost of the program at $220 million but subsequent projections pegged the cost at closer to $1.1 billion, according to his administration. In the end, $550 million was allocated for the program. Since then, the governor put limitations on the program as cost-saving measures, including capping enrollment for those 65 and older and adding copays. So far, it remains to be seen what the projected costs would be for the program for fiscal year 2025.

Senate Republicans earlier this month indicated they have issues with the prospect of more funding for the noncitizen health care program — which does not extend to the asylum-seekers coming to Chicago from Texas — despite the caps placed on it by the Pritzker administration. They expressed concerns that the hundreds of millions of dollars put toward the program would divert critical funding for veterans, senior citizens, the developmentally disabled and families struggling to cope with inflation.

“The governor has made it clear,” said Republican state Sen. Donald DeWitte of St. Charles, who participated in budget negotiations with the Senate Democrats last spring. “His priorities are out of step with what the people of Illinois want and what the people of Illinois who already live here need.”

Republicans said they want to see a budget that addresses pension debt and is based on “valid revenue estimates,” while also calling for tax relief. State Rep. Norine Hammond, a Republican from Macomb and the House GOP’s chief budget negotiator, cited the projected shortfall as a reason for lawmakers to curb spending.

“We just want to be certain that we can maintain a lot of the services that we have promised,” Hammond said.

Source: Chicago Tribune