WJBC Voices: JB the CK

By David Stanczak

About all we knew about J.B. (“No Neck”) Pritzker before he got elected was that he walked his kids to school and that he was even more insanely rich than his predecessor, neither of which gave us a clue as to how he was going to save the state from the dire straits it was in.  Well, No Neck has presented us with his first budget and, based on what he does and doesn’t propose in it, we now have an idea of his vision for the state.

Based on the budget, Pritzker ought to change his initials from J.B. (whatever they stand for) to C.K. (Can Kicker).  The last several governors of this state, be they Republican or Democrat, all had one thing in common: They have all kicked the can that is the state’s increasingly unstable financial situation down the street to be dealt with later (preferably by their successor).  The “can” is really three cans: pension formula, pension contributions, and unpaid bills. Based on No Neck’s first budget, it is safe to say that if he can kick footballs as well as cans, the Bears have found a suitable replacement for Cody Parkey.

The most important can is the pension formula. The overly generous defined benefit formula is the $133 billion hole in the State’s financial boat. It is the reason that pension benefit contributions now consume nearly one-fourth of the state’s total budget. Instead of bailing faster by paying the debt down (they aren’t even doing that), someone should plug the hole.  But that would require an amendment to the Illinois Constitution (not mentioned in No Neck’s budget message). That omission, compared to his insistence that the Constitution be amended to allow a progressive income tax, clearly indicates that the gaping hole in the state’s fiscal boat will remain.

The second can is pension contributions. Not attempting to plug the pension debt hole could be forgiven if there were at least a commitment in the budget to bail faster, buy a pump or at least get bigger buckets.  The budget contains none of the above. In fact, the budget decreases next year’s pension contribution by $878 million.  “Not to worry,” says No Neck.  “We’ve got it figured out. We’ll extend our funding deadline by seven years (been there, done that), issue up to $2 billion in bonds (Illinois has the worst credit rating of any state, thus making the borrowing more expensive-those bonds have to be paid off with interest); sell some state assets (as yet unidentified); and pay an extra $200 million a year into the pension systems over and above the required payments (assuming the graduated income tax is approved in 2020 and generates enough money to fulfill the promise). In the meantime, the $133 billion pension debt will be $139 billion by the end of the 2020 fiscal year.

The third can: unpaid bills.  Despite a 32% increase in the income tax and the issuance of bonds, the state has the same backlog of unpaid bills, about $7 billion that it had before those measures. Some of that amount consists of late fees required by the Prompt Payment Act.  That backlog remains undiminished in the budget.

Okay, you say, but the budget is at least balanced, right?  Wrong.  According to Fitch Ratings, about $2 billion of the $38 billion income shown in the budget is either unlikely to be realized or is one-time in nature.  In addition, to make the budget at least look sort of, kinda, halfway balanced, No Neck is counting on revenue from a tax on plastic shopping bags, e-cigarettes, increased taxes on cigarettes, a new sports wagering program, higher taxes on video gambling terminals, and legalizing and licensing recreational marijuana. But that new income isn’t scheduled to pay down any debt; the budget contains several hundred million dollars in new spending.

The professional assessment of the budget?  S & P said Pritzker “precariously balances the current budget, but punts measures to address fiscal progress to future years.” Fitch characterizes Illinois’ approach to finances as “irresolute fiscal decision-making.”  Groundhog Day is Illinois.

David Stanczak, a WJBC commentator since 1995, came to Bloomington in 1971. He served as the City of Bloomington’s first full-time legal counsel for over 18 years, before entering private practice. He is currently employed by the Snyder Companies and continues to reside in Bloomington with his family.

The opinions expressed within WJBC’s Voices are solely those of the Voices’ author, and are not necessarily those of WJBC or Cumulus Media, Inc.

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