Illinois’ “Goldilocks” budget

This year Illinois’ budget is larger than last year even though the state anticipates a shortfall of  over $9 billion. The Civic Federation notes this is made possible due to overinflated revenue estimates.

The strategy to achieve balance includes a variety of one-shots, including delaying payments to vendors, reports Benjamin Stout of the Illinois Statehouse News.  To cover its huge pension liability the state is making a $4 billion payment into the system. For the past three years that payment was made with bonds. Other strategies: the state will take longer to pay Medicaid, and is banking on higher revenues from newly hiked income taxes. Kurt Erickson at the The Quad-City Times calls it, “The Goldilocks Budget.”

One representative is asking that AFSCME re-open its contracts to find cost-savings. The union is opposed to any contract re-negotiations.

Lawmakers sent Governor Quinn a $33.4 billion budget to sign, but the Governor wants to spend $36 billion. He is constrained as Governor. At this stage in the budget process, he can only line-item veto not add to the legislature’s approved budget. One representative suggests the Governor come back in the fall and ask for more money.

I’ve been having a look at Illnois’ 2012 budget and it is remarkable. Of note are the five strategies the Governor outlined to fix Illinois’ long-running structural deficits. This includes  the “Illinois Now!” initiative, a “jobs-creation program” financed by bonds which claims credit for creating 135,000 jobs. The rest of the strategy includes “strategic borrowing”, federal assitance, higher taxes, and small programmatic reductions.  Structural changes are nowhere apparent, in a state that will run out of assets to pay for pensions in a few short years.