Rauner, legislative panel have $2.4-billion deficit disagreement

Gov. Bruce Rauner’s administration said on Wednesday that the state’s deficit is $2.4 billion less than what a bipartisan legislative commission projected in a July report.

The Commission on Government Forecasting and Accountability — the Illinois General Assembly’s independent budget analysts – estimated total state spending for the 2017 fiscal year that began on July 1 at $39.5 billion, compared with revenues of $31.8 billion — leaving nearly a $7.8 billion deficit.

But on Wednesday, Rauner’s administration said the budget deficit is $5.4 billion.

Illinois Budget Director Tim Nuding said the commission didn’t factor in several key levels of revenue, including federal reimbursements to the state for Medicaid spending. The commission used Medicaid spending numbers from February, $8.2 billion, which Nuding called outdated. He said an estimated $4.3 billion of that spending would be reimbursed in federal dollars.

The commission, he said, only counted $3.1 billion in reimbursements. He said this fiscal year, the state only received $3 billion in federal receipts for Medicaid but that was because of late bills paid in January. That full revenue is expected to be made up in 2017, he said.

Nuding said the budget impasse played a role in the differing figures but still called the commission’s work reputable.

Nuding said he believed the numbers were off back when they were released in July, but chose to disclose his differing deficit number before the state plans to sell as much as $1.7 billion of general obligation bonds next month.

The administration said the commission also didn’t factor in resources that will be available, such as revenue coming into the “rainy day” fund. Nuding said the report also didn’t account for savings incurred from the stopgap budget, which the Legislature passed in June. That included $150 million from the federal government from the Affordable Healthcare Act, in addition to savings incurred from the state’s ability to refund or refinance existing bonds.

The commission’s director did not return calls for comment.

But state Rep. David McSweeney, R-Barrington Hills, who requested the commission write its report, said he’s requested a full analysis from the governor’s office about the deficit difference and was assured the commission is sticking to its figures.

“I think it’s very important that we get the right numbers,” McSweeney said. McSweeney said he didn’t vote to approve the stopgap budget because he was concerned it would increase the deficit.

“Until this point the numbers have not been challenged. I’m looking for more than just a statement. That means nothing to me,” he said, adding he’s requested a “line by line” detailed analysis of the budget from the governor’s office.

The governor’s office on Wednesday said there’s still an imperative need for a balanced budget when legislators come back to Springfield this fall.

“While we are facing a much smaller hole than if the super majority in control of the legislature passed its $7.5 billion unbalanced budget, it further underscores the need to pass reforms and a truly balanced budget this fall,” spokeswoman Catherine Kelly said in a statement.

Rauner’s own proposed 2017 budget was $3.5 billion out of balance. In May, he vetoed a budget passed by the Democratic-controlled Illinois House that was $7 billion out of balance. And in late June, Rauner signed the stopgap plan.

Meanwhile, the state’s unpaid bills continue to grow, with the latest estimate at $8.3 billion.