Bad revenue forecasts drive reckless state spending

Lawmakers too often decide what to spend without an accurate picture of what will come in.

Better revenue projections can help Illinois fix its budget process and spend within its means.

A simple principle should guide state budgeting: Know how much money you have before deciding how to spend it. Illinois too often works backward, spending first and figuring it out later.

Some indication of revenues comes from the Governor’s Office of Management and Budget and the Illinois General Assembly’s Commission on Government Forecasting and Accountability, but those estimates are often treated as flexible. The General Assembly is required to pass a resolution each year estimating the revenue for the upcoming budget year, but lawmakers typically skip it.

Lawmakers also have regularly used optimistic revenue projections to justify higher spending. Taxpayers are left to cover shortfalls.

Gov. J.B. Pritzker’s record-high $56 billion proposed budget for fiscal 2027 relies on an additional $1 billion in revenue that may or may not materialize and $589 million in not-yet-approved tax hikes.

COGFA predicts Illinois will have roughly $55.5 billion in general fund revenues in fiscal 2027, meaning lawmakers should already be looking to cut about half a billion dollars from Pritzker’s $56 billion proposal.

Illinois needs a more responsible budgeting process that sticks to early, credible revenue estimates. Lawmakers also can establish a spending cap to strengthen the process by ensuring any extra revenue goes toward the state’s fiscal shortcomings, including its massive pension debt or its woefully lacking rainy-day fund.

Illinoisans face the highest combined state and local tax rate in the nation, including the property taxes among the nation’s  highest and  sales taxes near the top. Considering projected population loss projections and a sluggish economy, at least in part a result from high taxes and poor competitiveness, Illinois cannot afford more tax hikes. Without reform, the state will continue its pattern of overspending first and asking taxpayers to make up the difference later.