Gov. JB Pritzker announced last Tuesday that he has ordered $711.2 million dollars be cut from this year’s budget as a “first step” in closing a $3.9 billion revenue shortfall in fiscal year 2020.
This move comes amid a pandemic that has drastically reduced state revenue and after voters rejected the graduated income tax amendment in the November election.
When introducing this fiscal year’s budget earlier in 2020, Pritzker pledged to make about $1.4 billion in spending cuts if voters did not OK the amendment, as the budget relied on projected revenue from the new tax system.
“I promised to be a governor who balances the budget and begins paying down the bills that my predecessor left behind,” Pritzker, a Democrat, said when announcing the cuts. “I promised to invest in education, job training and job creation. Before COVID hit us, we did that. And despite all the current challenges, I am confident that we will continue our ascent to economic strength and fiscal stability.”
These cuts are the result of a months-long review of agency spending under the executive branch.
Pritzker did not need General Assembly approval to make these cuts, though he will need its OK to make others.
The single largest of the current spending reductions is in the Department of Human Services, which had its budget cut by $126.3 million.
That money was earmarked for operational expenses and grants. There is also now a hiring freeze with that department.
Another notable change Pritzker said is that he would negotiate with the state’s union to decrease personnel costs by $75 million.
He also said he would create an advisory team to determine how to make the Illinois Department of Corrections more efficient, with one possibility being closing prisons. Pritzker already cut $25.4 million from that department, citing savings due to a lower offender population.
Other noteworthy cuts include $68 million from the Department of Transportation, $65 million from Central Management Services, $45.6 million from public safety agencies, $40 million from the school maintenance capital grants fund, $60.4 million from the Department of Commerce and Economic Opportunity and $29 million from the Department of Natural Resources.
The majority of those cuts involve decreases in grant funding or operational expenses like travel and equipment.
IDNR cuts were to the Open Space Lands Acquisition and Development grants fund, which the Waterloo Park District used to get money for its upcoming splash pad.
Pritzker also cut $56.8 million from various government service agencies like the Lottery, Department of Labor and Lt. Governor’s office, citing operational spending reductions, and $65 million from Central Management Services’ insurance program, citing cost savings due to a new union contract.
Overall, Pritzker said about $2 billion of this year’s revenue shortfall was due the pandemic.
He had previously announced that he planned to borrow that money through the Federal Reserve’s Municipal Liquidity Fund, which was created this year to help state and local governments close budget gaps created by the pandemic.
Pritzker attributed the rest of the budget gap to what he calls a “structural” deficit in the state’s budget that he aimed to fill with graduated income tax monies.
“It’s been two years since Republicans announced their wholesale opposition to the fair tax, and it’s been 40 days since the election, and they have yet to produce any viable answer for balancing the budget,” Pritzker said, according to Capitol News Illinois. “They worked and spent endlessly to defeat the best option Democrats put on the table. And after all their bluster, it turns out that Republicans have no plan at all to put the state on a firm fiscal foundation.”
GOP leaders pushed back against that assessment, arguing the shortfall is a result of Democrats not cutting spending sooner.
State Sen. Paul Schimpf (R-Waterloo) was among those who disagreed with Pritzker’s assessment.
“Instead of accepting the broad, decisive and bipartisan defeat of his graduated tax scheme, Gov. Pritzker decided to throw another tantrum blaming everyone but himself for the budget crisis facing the state,” he said. “The real problem is his grossly irresponsible fiscal year 2020 budget in which he increased spending across the board while relying on graduated tax revenue and federal help that were never coming. Times of crisis are when real leaders step forward. Instead, we’re stuck with a governor who can’t get past his own failures and move forward for the betterment of the people of this state.”