When Gov. JB Pritzker took office, Illinois “was facing unprecedented challenges because we had a Republican governor who decided to hold the state budget hostage.” That’s what Pritzker told New Hampshire Democrats in his recent presidential teaser speech in New Hampshire and he said the same thing in his keynote address Saturday to Florida Democrats.
That claim has been a perpetual message from Pritzker within Illinois and now it’s part of his bid for the presidency.
It’s no surprise that he’d use it since it often goes unchallenged or even supported in Illinois media. Just this past Friday, Dave McKinney of WBEZ in Chicago wrote flatly, “Pritzker’s term has been one of epic struggle. He entered office with the state in near financial ruin because of [former Gov. Bruce] Rauner’s two-year budget standoff with the Democratic-led legislature…”
That’s hogwash, and time for a reminder of some facts about the 2015-17 budget impasse.
First, Illinois was in a fiscal crisis long before Rauner took office. That crisis was already severe enough, according to state Democrats themselves, to require overriding the state’s constitutional pension protection clause under the “police power” doctrine, something historically used in only extraordinary circumstances. Democratic Attorney General Lisa Madigan argued that position in 2014. Only benefit cuts, not tax increases, could work, she told the Illinois Supreme Court in defending SB 1, a law that would have cut some pension benefits which was passed by a Democratic supermajority.
She cited express legislative findings saying the same—findings made when Democrats held supermajorities in both houses of the General Assembly. “The fiscal problems facing the state and its retirement systems cannot be solved without making some changes to the structure of the retirement systems.” (Emphasis added.)
Consider these additional facts about where we stood before Rauner even took office:
- Illinois’ negative Total Primary Government Net Position—basically, its negative net worth—had dropped a staggering $106 billion from 2006 to 2015, reaching negative $121 billion.
- The state’s unfunded pension obligations tripled from $35 billion in 2003 to $105 billion the year before Rauner took over.
- State budgets had never balanced since 2001, even under the state’s phony budget accounting that ignores growing debt.
- Rating agencies had issued 13 credit downgrades on the state since 2009. Illinois’ credit rating was already the nation’s worst.
- The state’s unpaid bill backlog was about $6.6 billion and had already begun ticking back up, despite the temporary tax increase then in place.
- Social service providers were already reeling. Illinois ranked No. 1 in the country in the percentage of nonprofit groups facing payment delays, an Urban Institute survey found. “We are basically bankrolling the state. It’s a ridiculous situation,” said one provider. “It’s just absolutely awful and there seems to be no end in sight.”
Things improved when the impasse ended, but how was it ended?
With the largest income tax increase in Illinois history, for starters. Concurrently with the impasse-ending budget in 2017, the Democratic supermajority passed that increase by overriding Rauner’s veto. It was expected to bring in an additional $4.3 billion at the time, and probably results in more today. The supermajority got the solution they wanted all along — a tax increase with no reforms.
That tax increase was supplemented by bond offerings totaling $6 billion that was applied against the state’s unpaid bill backlog. In other words, the debt was moved from one credit card to another.
And under the Pritzker Administration, Illinois has also imposed over $5 billion of higher regressive taxes on things like gasoline and vehicle registrations.
In sum, the budget impasse does not account for much of what was in place when Pritzker took power or the circumstances he has dealt with since.
The second whopper that Pritzker is using in his presidential bid is that his fiscal prowess has balanced the budget and solved much of the crisis he inherited. McKinney backed him up on that, too, writing, that “since becoming governor, Pritzker has helped stabilize Illinois’ finances, drawing repeated bond-rating upgrades for the state from Wall Street.”
Just how has Pritzker “helped stabilize Illinois’ finances”? Not a single structural reform has even been proposed and pension reform is out of the question for Pritzker. He has done nothing, unless you prefer to count the tax increases described above.
Nor are Illinois’ finances stabilized.
First, the state’s supposed budget surplus in fact is a deficit, even using phony government budget numbers.
Second, look at the actual results – audited financial statements. Even in the 2021 fiscal year when federal assistance was pouring in, Illinois lost another $4.5 billion. It has lost money every year since 2021, according to those statements.
Cash is temporarily abundant because of the obscene $14 trillion of federal money dispensed under the guise of pandemic relief. The State of Illinois directly got $8 billion. Other units of government and the private sector got almost $200 billion, which has swelled tax revenue beyond anybody’s expectations. It’s the same story across the nation.
Pritzker has talked out of both sides of his mouth on that. In this year’s State of the State speech he told Illinoisans that federal money hasn’t made a difference. “Let me set the record straight for you,” he said. “State budget surpluses would exist even without the money we received from the federal government.” But then he went before the US House Committee on Oversight and Reform went along with a claim that federal bailout money now has Illinois projecting budget “surpluses projected for years to come.”
Once the federal bailout money is exhausted, Illinois will return to the reality it faced before the pandemic. That reality is that the state simply isn’t generating the growth, employment and resulting tax base needed to meet the promises we have made and deliver the basic services Illinoisans expect. Nothing has changed.
Pritzker gets a pass on most all of this in Illinois, and there’s far more to tell about his record of deception and the dishonesty in his most recent speech to Florida Democrats, which we will cover separately. We’ll see whether the national press lets him get away with it as he pursues his interest in the White House.