New report puts Illinois $12.8 billion in the red

Monday, January 25, 2010

As the wide-open race for governor enters the final stretch, a new report from a respected tax watchdog group is starkly underlining just how big a financial hole the winners of the Democratic and Republican primaries would have to fill: "at least" $12.8 billion.

Maybe the candidates would like to run for an easier job — like finding the cure for cancer, or rebuilding Haiti.

The report comes from the Civic Federation's new Institute for Illinois Fiscal Sustainability. Though the numbers are roughly in the same range as those projected by other fiscal experts, the institute does a nice job of laying out the sea of red ink that almost literally is drowning Illinois.

According to the report, the state began the fiscal year on July 1 with $3.7 billion in bills carried over from fiscal '09. Then things got worse. A lot worse.

The General Assembly raised the budget proposed by Gov. Pat Quinn by $1.4 billion. Revenues dropped below projections. And Gov. Quinn signed off on items such as renewing a popular $205-million college scholarship program without identifying a new revenue source.

As a result, according to the federation, this year's hole (including unpaid bills due from last year) has grown $2 billion, to $5.7 billion.

But next year is projected to be even worse.

This year's budget was balanced with lots of one-time revenues that presumably will not be available next year. Like $2 billion in federal stimulus money. And $3.5 billion that lawmakers directed the governor to borrow to make this year's payments to state employee pension plans.

Factor that in, and the projected 2011 deficit is $7.1 billion, according to the federation — plus the $5.7 billion still owed from 2010.

The combined $12.8 billion is nearly half of the state's general fund's operating budget — and better than 20% of Illinois' total budget, which includes operations, capital, federal programs and other matters.

Put a different way, the two-year hole in the state budget amounts to about $1,000 for each Illinoisan — man, woman and child.

Keep that in mind, folks, as the candidates argue about what Harold Washington really believed and who is most against any new taxes.