If Illinois Republicans and conservatives knew how to get this information about Illinois’ budget shortfall to more people, they’d start winning elections. Here are Ted Dabrowski and John Klingner:
Gov. J.B. Pritzker’s administration has released a report that puts Illinois’ expected budget deficit for fiscal year 2020 at $3.2 billion. The report is critical of former Gov. Bruce Rauner for actions that Pritzker claims have made the budget hole even larger than previously projected. Rauner had reported the shortfall as $2.76 billion just three months ago.
But leaving politics aside – a new governor always blames his predecessor – Pritzker shouldn’t be given any credit for his more “honest” accounting of the state’s deficits. Nor should any previous governor. They’ve all understated the true shortfalls that are run up each year. Illinois’ official budgets never include the true cost of the state’s retirement benefits.
If Pritzker really wanted to break the cycle of fiscal dishonesty in Illinois, he’d tell the truth about how the big the hole is in 2020. The shortfall he’d report in his upcoming budget address would be at least $9.4 billion.*
That’s the actual shortfall if the state were to pay what it’s actuaries say it should – $3.2 billion for Pritzker’s original deficit projection, and $6.2 billion more to properly pay down the state’s retirement debts. That includes $3.2 billion for the state’s pension debts and nearly another $3 billion for retiree health insurance debts.
Every year, the state’s actuaries determine what amounts Illinois should contribute into state worker retirement benefits. And every year, lawmakers underpay those amounts. Statutory contributions set by Illinois lawmakers are always far lower than what’s actuarially required.
That makes the budgets look far better than they really are.
Wirepoints compared the actuarially required contributions (ARC) vs. the actual contributions to the state’s pension and retiree health insurance funds over the past several years. The state has consistently shorted the funds by billions as a matter of practice.
Read more about Illinois’s budget shortfall: Wirepoints