State budget office projects ‘sizable deficits’ over next 5 years
Already projecting a nearly $4 billion budget deficit for 2021, the state’s budget office also projects deficits ranging from $4.8 billion in fiscal year 2022 to $4.2 billion by fiscal year 2026, according to a report released Friday.
With a shift to a graduated income tax now off the table, the state’s Office of Management and Budget on Friday projected Illinois will run “sizeable deficits” for fiscal years 2022 through 2026.
Already projecting a nearly $4 billion budget deficit for 2021, the state’s budget office also projects deficits ranging from $4.8 billion in fiscal year 2022 to $4.2 billion by fiscal year 2026, according to a report on the state’s economic and fiscal policy released Friday.
“... The ongoing coronavirus pandemic has resulted in unexpected and dramatic revenue losses, and Illinois will also continue to face significant financial challenges until it finds a long-term solution to its long standing structural deficit,” a statement accompanying the report said.
The state’s backlog of unpaid bills also is projected to grow over the next five years, rising from about $10.1 billion for the 2021 fiscal year to a little over $33 billion in 2026.
Gov. J.B. Pritzker said he’s working with leaders to “address our challenges.”
“While we didn’t anticipate a pandemic, we must now grapple with the economic hardship it has created while also preserving the vital state services Illinoisans rely on,” Pritzker’s statement reads in part. “I am committed to ensuring the state of Illinois returns to the path of fiscal stability we began to pave last year, while managing through this unexpected economic crisis responsibly.”
On Wednesday, Pritzker warned that some “serious and, frankly, painful cuts” could be coming to rightsize the state’s budget.
“We’ve trimmed across the executive branch throughout the last two years, and there’s more to be done than just trimming,” Pritzker said Wednesday. “Now we’re going to have to make some serious and, frankly, painful cuts. Those aren’t things that I can do alone. The legislature has to be right there with us.”
The governor also sent a letter to House and Senate leadership calling for a meeting focused on “reconciling our FY21 budget and bringing it into balance this fiscal year.”
Though he didn’t provide specifics on where the cuts might come from, Pritzker said in September “middle class, working class and poor families” in Illinois and the U.S. “will likely suffer from cuts to public safety, education, human services and environmental safety — and the potential layoffs will make the economic recession worse.”
Pritzker also said in September that cabinet directors were advised to prepare for a “nightmare scenario,” including budget cuts of at least 5% for the current fiscal year and 10% for the next one should the state not receive any more federal help.