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* Lee Newspapers…
However, the rollout of the new pre-K initiative confirms that Pritzker, after years of holding the line on the creation of new spending programs, has green-lit outlays that extend beyond the next fiscal year.
This reflects growing optimism about the fiscal condition of the state. Illinois has experienced a series of credit rating upgrades and run budget surpluses in the past couple of years, buoyed by robust post-pandemic revenue growth in income and sales taxes, and federal stimulus funds.
This strong revenue performance led the Commission on Government Forecasting and Accountability and the Governor’s Office of Management and Budget to revise their revenue estimates $4.9 billion and $3.7 billion higher, respectively, for fiscal year 2023.
These unanticipated revenues have given Pritzker a level of budget flexibility that no governor has had in more than two decades.
* Tribune…
The difference between then and now, Pritzker said, is that the state’s financial picture has significantly improved since he took office four years ago. That’s a theme he highlighted heavily in his reelection campaign and one he’s certain to revisit in his speech Wednesday.
“Budgets were unbalanced back then. And that’s not the case anymore,” Pritzker said.
“Our budgets have been balanced and we’ve been running surpluses. We’re in a much better fiscal position today,” he said. “And so when I say that we’re aiming to continue to invest in early childhood, it’s based on the knowledge that we finally have our fiscal house in order and we ought to be investing in — and this is just one area — but we ought to be investing in this.”
The state has paid off major pandemic related debts, including a $4.5 billion hole in its unemployment insurance trust fund. It has also received credit upgrades from the three major ratings agencies and socked away $1 billion in its historically anemic rainy day fund.
* AP…
“There are so many different programs that are meritorious but when you have limited funds … for this next year, they’re looking pretty good, but we always need to err on the conservative side of not spending everything,” Democratic Comptroller Susana Mendoza said. “Hope for the best, but plan for the worst.”
Mendoza said education is an area where additional spending is called for, but she would like to see better funding of needs-based college grants.
* Crain’s…
Pritzker shrugged off suggestions from Comptroller Susana Mendoza, who oversees state expenditures, that Illinois should avoid starting new programs now, given economic weakness and hints that a recession is near, and instead focus on proven winners, such as the popular MAP college scholarship program.
“Forecast revenue coming into Fiscal ‘27 is continuing to be good,” said the governor, and the budgets he has implemented “have been conservative.”
Besides, he added, Mendoza’s duties do not include making revenue forecasts.
* From yesterday’s Q&A…
Q: Comptroller Susana Mendoza said she doesn’t think the state is in a position to take on new spending new programs that require perpetual funding into the future. Do you disagree with that assessment? And why so?
Pritzker: I’d point out two things. She doesn’t do the revenue estimates for the state. Never has. And she is proposing her own idea for increased spending.
But I would point out that COGFA and GOMB both have been relatively in agreement over the last couple or few years. That’s unusual, and that in the end, those estimates have been conservative. So the goal here, has been my goal every year, balance the budget. And if we can, use surpluses to pay off debt. And that’s what we’ve done every single year. So, I’m in agreement with her about wanting to increase MAP grant funding. But you know, she hasn’t seen the revenue estimates or counted that into the forecast of whether she thinks we have dollars available to put into our operating budget. […]
Q: So, GOMB had, last I checked in November, projected a $384 million deficit FOR 2025. Does this add to that?
Pritzker: No. And to be clear, as you know, the estimates are made every year for five years hence. And I’ve been working very hard to make sure that we’re not going to have deficits going forward. And it appears that we’re doing better than expected.
I guess I would point out one other thing, which is I think you already know this, Jerry, But I’ll I’ll repeat it for everybody. As you know, we did some reform in the tax code over the last few years That’s really enhanced our revenue separate and apart from the increased economic activity and the growing economy that we’ve seen. And that is we passed a ‘Wayfair decision’ change to our sales tax which leveled the playing field for online purchases and small business purchases across Illinois. And then we as you know, last year a big fight over this, closing corporate loopholes in Illinois. When you add those two, plus the increased revenue that we’ve seen from cannabis sales, we’ve seen significantly more revenue and I would call them new sources. And the result of that is what’s providing us the ability to continue to invest in the important things that we need. […]
Q: Was this [early childhood proposal] a plan that got delayed due to the pandemic?
A: My first year in office, I arrived, the cupboards were bare. Let’s be clear that, historically, the state had been running deficits, although they would smooth them over each year and make it look balanced. And I pointed that out in a report that I put out when I first came into office that there was almost a $3 billion structural deficit.
Pritzker: So immediately upon coming into office, there was not an opportunity to make big leaps forward anywhere across state government. But this is an area I care passionately about and so nevertheless put $50 million more into the budget and have tried to do that each year over the last four years and again, with all the challenges of COVID collectively with the challenges of overcoming a structural deficit, we nevertheless had put more than $100 million more into early childhood. So now we’re going to be at $179 million after this new $75 [million] in prepK. And that’s just in pre-K, those dollars going into the early childhood block grant program. If you want to call it a delay, you can because I would have done it in year one if the dollars had been available to do it. But I’ve been prudent about how we’ve been spending our money in the state. And there are a lot of areas that need investment. I mean things have really been hollowed out. So I know that’s maybe a longer winded answer than you were looking for. But, yeah, the delays have been because we’ve been getting our budgets straight and managing to balance it every year. And now we have the dollars available to make this kind of leap forward because of prudent fiscal management.
Please pardon all transcription errors.
posted by Rich Miller
Wednesday, Feb 15, 23 @ 9:41 am
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Previous Post: A deeper dive into the governor’s Smart Start Illinois plan
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Between this, the Governors push for Raises for his staff and inflation the AFSCME contract negotiations should be interesting. All of these statements and the Gubernatorial staff raise statements should be on the AFSCME negotiating table as retorts.
Comment by Mason born Wednesday, Feb 15, 23 @ 10:56 am
= Democratic Comptroller Susana Mendoza said. “Hope for the best, but plan for the worst.”=
Good advice. Pritzker should heed it.
Comment by unafraid Wednesday, Feb 15, 23 @ 11:23 am
Mendoza is wading in, as she can, and Pritzker is being thoughtful.
Now it’s a question as to how far Mendoza wants this to go.
Comment by Oswego Willy Wednesday, Feb 15, 23 @ 11:40 am
It was a free shot for Mendoza to make her position for Governor in waiting as JB positions himself to climb the ladder. She can position herself as continuing to be financially responsible to the public if the economy slows down she can point back here and outside of insiders, the general population will forget she said anything at all if revenues continue as forecasted as she continues paying the bills on time.
Comment by BW Wednesday, Feb 15, 23 @ 4:14 pm
===if the economy slows down she can point back here===
You must’ve missed this one https://capitolfax.com/2023/02/15/mendoza-climbs-on-board/
Comment by Rich Miller Wednesday, Feb 15, 23 @ 4:16 pm