Illinois budget deficit projected to hit $6.2B by June 30, grow to $7.7B by June 2018
The state’s bill backlog is expected to hit $22.7 billion and pension costs are predicted to grow 14 percent by fiscal year 2018.
A fiscal review conducted by the Commission on Government Forecasting and Accountability, or COGFA, determined Illinois’ budget deficit will grow to $6.2 billion for the fiscal year ending June 30.
If Illinois were to go for a third full fiscal year without a budget, COGFA projected the budget deficit would grow to $7.7 billion, and the state’s backlog of unpaid bills would rise to $22.7 billion from the more than $14.7 billion total that existed as of June 8.
The review was requested by state Rep. David McSweeney, R-Barrington Hills.
Even while the Illinois General Assembly has not passed a budget since fiscal year 2015, and the state has been without a constitutionally mandated balanced budget since 2001, Illinois is spending at record levels. A combination of autopilot spending, appropriations, court orders and consent decrees have caused the state to spend $38.1 billion in fiscal year 2017. COGFA’s latest projections have that autopilot spending growing by $1.6 billion over the coming fiscal year.
COGFA’s report indicated the state’s required pension payments as the biggest driver for the growth in spending. The payments into the state’s pension systems are anticipated to grow by 14 percent to $7.9 billion in fiscal year 2018, according to the AP.
Moody’s Investors Service calculates Illinois’ pension debt is more than $250 billion, which is far more than the $130 billion unfunded pension liability that the state claims. Moody’s pointed to the state’s growing pension debt in its decision to downgrade Illinois’ credit rating to Baa3, or one level above junk-bond status.
S&P Global Ratings, who also recently cut Illinois’ credit rating to one level above junk, issued a warning June 7 that they would lower the state’s credit rating to junk status if a budget agreement wasn’t reached by July 1.