The Policy Shop: Springfield’s bad budgeting
This episode of The Policy Shop is by Bryce Hill, director of fiscal and economic research.
It’s all just numbers, right? $53.1 billion? Why, with 12.5 million Illinoisans, that will only cost a family of four about $17,000. A mere pittance for all the good done by the state politicians who generously spend other people’s money.
At least, that must be the logic at work. Gov. J.B. Pritzker requested a record $52.7 billion state budget; state lawmakers responded by inflating it into a $53.1 billion spending plan. Pritzker asked for $898 million in new taxes; lawmakers outdid him, adding $1.1 billion in new taxes when they passed the state budget May 29.
Illinoisans are in for the record tax bill that goes with record spending. The budget is nearly $15 billion higher than when Pritzker took office, and at this rate by the time he finishes his second term it will be closing in on $20 billion higher.
Pritzker was obviously proud of the new spending record: “It’s a great budget.” He downplayed and ridiculed the bipartisan opposition that required three votes to get it passed.
“You know, ‘Oh, wait until you see what they’re going to tax you on next.’ Well they’ve been saying this for every year that I’ve been in office and it hasn’t been true,” Pritzker said.
Short memory. It has been true.
He started in 2019 with 24 new taxes and fee hikes costing Illinoisans an extra $5.24 billion. Every year his spending has grown, and that requires new tax revenue, including that $1.1 billion to support this fiscal year 2025 budget beginning July 1. When you spend $15 billion more, you must tax $15 billion more.
All that spending – over 3,300 pages worth – but two items that most needed state politicians’ attention got minimal attention.
Illinois’ long-standing tradition of failing to pay enough into its five statewide pension systems continues in 2025. Pension expenses are the single-largest item in the state budget, taking up nearly $10.5 billion, or 20%, of the state’s general funds budget, and nearly $11.6 billion across all state funds. But that is still $4.5 billion below what the plans’ own actuaries have determined is required to actually begin paying off the state’s pension debt.
Pritzker did try to control some of the pension damage, proposing to add three years to the state’s current funding plan and raising the funding target from 90% to 100%. He is correct in proposing the state should be targeting 100% funding to truly solidify the state’s pension systems. The trouble is his proposal ignores the basic fact Illinois’ pension contributions, while statutorily sufficient, remain insufficient on an actuarial basis – meaning they won’t meet real-world needs.
Required contributions will climb each year the state fails to pay enough.
State lawmakers ignored Pritzker’s proposal. The state pension systems will be underfunded again, and are $142.2 billion in the red with that pension debt continuing to grow.
Education was the other area that didn’t get the attention it deserves from state lawmakers.
State lawmakers are required by law to increase education spending by $350 million each year, regardless of results or enrollment. Total funding for school districts was $8.6 billion – an increase of $1.8 billion since Pritzker was elected, even as enrollment has declined each year.
The state budget was a final chance for lawmakers to save the Invest in Kids tax credit scholarship, which helped over 9,600 low-income students choose a school that better fit their needs. Last year lawmakers canceled the school choice program, making Illinois the only state to defy the national trend to expand educational options for students and their families.
In doing so, lawmakers bowed to teachers union claims the $57 million program – which was funded via tax deductible donations and did not take any money out of the education budget – crowded out funding for public schools. In reality, the teachers unions fought the program because it represented unwelcomed competition: It gave needy kids a shot at a superior education where the public schools had failed them and it provided poorer families access to the same choice the well-compensated teachers union elites made for their own children.
When you decide to spend a record amount of someone else’s money, shouldn’t fiscal adulthood be involved? Seems there should be plenty of leeway when you spend $53.1 billion to do a better job paying down past-due obligations and helping the impoverished children you are otherwise failing.
Correction: An earlier version of this article included an incorrect amount for the family burden of the new state budget.