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FRIDAY, February 17, 2023
BUDGET; MARTIRE; FINES; COPS
MORE GOOD NEWS Ralph Martire of the Center for Tax and Budget Accountability reported some interesting budget news yesterday.
Gov. JB Pritzker has claimed since the end of his first fiscal year that his budgets have been balanced. That’s true, Martire says, but only if you use an “on-budget” analysis. That means the amount appropriated for the fiscal year matches the amount of revenues received. It’s pretty simple, but not at all the norm during the previous three governors.
But “on-budget” numbers don’t include the unpaid bill backlog from the previous fiscal year(s), otherwise known as the “accumulated deficit.” When Pritzker first took office, the state’s accumulated deficit stood at almost $7.8 billion (after the backlog had peaked at $16.7 billion in November of 2017).
According to Martire, the on-budget surplus revenue is high enough in current Fiscal Year 2023, “to create true balance at the end of FY 2023, with no accumulated deficit carrying forward into FY 2024.” Not bad at all.
But, instead of trying to reach that prized fiscal goal, Pritzker has proposed to use $1.8 billion of the state’s $4.93 billion FY23 on-budget surplus to pay down debt in the state’s unemployment insurance trust fund. Martire called Pritzker’s proposal, “a rational decision that ultimately saves interest costs.”
Also, according to Martire, “(T)he $1.15 billion accumulated deficit that is projected for the General Fund at the end of FY 2024 will be the lowest—in nominal, non-inflation-adjusted dollars that it has been in 25 years.”
That’s pretty darned remarkable, especially since when factoring in inflation, $1.15 billion 25 years ago would be $2.13 billion today.
Martire has been on a crusade his entire career to expand Illinois’ taxing base, and his latest report was no exception.
“The state’s revenue generation problems are caused by Illinois’ tax policy shortcomings,” Martire wrote. “Illinois’ flawed state tax policy is simply not designed to work in the modern economy. Hence, it has historically failed to generate adequate annual revenue growth to cover the cost of providing the same level of services from one fiscal year into the next.”
Martire favors a sales tax on professional services, among other things.
Read CTBA's response on its BudgetBlog.