Pritzker allows state to put Thompson Center up for sale
Including cash from an imagined Thompson Center sale in state budgets was so common it became a punchline. But Illinois Gov. J.B. Pritzker signed a law that finally puts the massive state office complex on the market.
Illinois lawmakers have a history of inaccurately including the sale of one controversial Chicago landmark in state budgets. But state leaders could finally cash in on the aging state office building.
Using revenue projections from nonexistent Thompson Center sales in Illinois budgets has become a routine accounting gimmick. Lawmakers included between $200 million and $300 million in revenue from a supposed Thompson Center sale in state budgets former Gov. Bruce Rauner signed into law for fiscal years 2017, 2018 and 2019 – despite never having been able to actually put the building on the market.
While selling off the Thompson Center might make fiscal sense, lawmakers are mistaken if they view the one-time sale as any meaningful step toward restoring the state’s finances.
In fact, despite Pritzker not anticipating a pending Thompson Center sale in his budget, the governor’s intention to outspend his predecessor is likely to grow Illinois’ annual deficit to over $3.2 billion. And while Pritzker says switching the state’s income tax from flat to progressive – on top of a litany of other proposed tax and fee increases – will achieve budgetary balance, no one outside the governor’s office has managed to replicate those findings.
In the longer term, Illinois faces nearly $134 billion in pension debt and a more than $8 billion backlog of unpaid bills. Even by Pritzker’s overly optimistic revenue projections, a progressive tax hike would fund the equivalent of 118 days of state pension costs, or fewer than four months.
Even if the General Assembly passes and Illinois voters approve a progressive tax hike, it would not be until 2021 that it takes effect. Illinois that year is scheduled to pay $10.5 billion in pension contributions and debt service, more than 27 percent of the state’s expected general revenues.
Pensions will continue eating a larger share of state revenue, pushing taxes higher and leaving state workers with an ever-shakier retirement system.
Pritzker must address the primary drivers of the state’s ailing fiscal condition if he ever wishes to achieve his goals of middle-class tax relief and sound finances. Instead of pursuing a progressive tax hike of which many are justifiably wary, Pritzker should spearhead constitutional pension reform to restore confidence in state retirement systems and state finances.
Commonsense, bipartisan pension reforms similar to those advanced in 2013, when Springfield last saw a Democratic governor accompanied by supermajorities in both chambers, can set Illinois on the right path. A one-time sale of the Thompson Center and endless tax hikes cannot.