Illinois is broke. There hasn’t been a state budget for two years. Will a “special session” provide solutions?
The state of Illinois has not had a full budget enacted since before Gov. Bruce Rauner took office. The last fiscal year with a full underlying budget closed in July 2015. He and Democratic majority lawmakers in the Illinois House and Senate have not been able to agree on revenue and spending plans. Lawmakers ended their spring session in May without sending the governor a budget. Now Rauner has called lawmakers back into a “special session” that starts Wednesday.
What is a special session?
A special session, or a continuous special session, is a period when the House and Senate convene following the end of the regular session. Traditionally, special sessions are called during or following emergencies.
Rauner now has convened a special session for 10 days (June 21 to June 30) leading up to the start of a new fiscal year July 1. Illinois has gone close to two and half years without a complete budget. Because lawmakers ended their regular session without sending Rauner a budget, any budget or other legislation passed in special session will require a three-fifths majority vote instead of a simple majority.
Why is Illinois broke?
Illinois continues to spend at levels that existed in 2014 even though the state’s income tax rates dropped in 2015 when a temporary tax expired. The state spends at 2014 levels because of court orders that require payments to state workers, retired public employees, children who are wards of the state and other so-called “continuing appropriations” lawmakers authorized previously. A federal judge also ruled recently that payments to health care providers who have provided services to poor residents also must be made.
What is Illinois’ bill backlog?
Because Illinois isn’t generating enough tax revenue to cover required spending, the state is racking up debt. Comptroller Susana Mendoza says Illinois’ backlog of overdue bills is more than $15 billion.
What is Illinois’ pension debt?
Many governments in Illinois and nationwide are not sufficiently funding public pensions, but no state is worse than Illinois. Illinois skipped pension payments over several years and borrowed money from pension funds in previous administrations. As a result, analyses by economic experts and Moody’s Investor Service say Illinois’ pension debt is about $251 billion.
That’s a big number. Why should I care?
The Chicago-based government financial watchdog, Truth in Accounting, calculates a “taxpayer burden” for states and many cities. Earlier this year, after studying the state’s 2016 comprehensive annual financial report, the organization said each and every state taxpayer would need to contribute $50,400 if Illinois were to pay off all of its overdue bills and pension obligations at once.
What will the special session cost taxpayers?
Legislators currently are allowed to collect $111 per day for being in session in Springfield. They also receive 39 cents per mile to travel to and from Springfield. Experts estimate the daily cost of a special session will run between $40,000 and $50,000. And remember, the special session could run 10 days. If it does, the cost to taxpayers will be $400,000 to $500,000.
What’s Illinois’ credit rating and why should I care?
Illinois’ credit rating has been downgraded repeatedly since 2009. Currently, the three biggest credit rating agencies have Illinois rated as the following,
Moody’s has rated Illinois a Baa3 (one rating above junk status)
S&P has rated Illinois a BBB- (one rating above junk status) and
Fitch has rated Illinois a BBB (two ratings above junk status).
Low credit ratings make it more difficult for the state to borrow money and it makes the cost of borrowing more expensive. Analysts believe that downgrades into junk status will make lending Illinois money too risky in some instances. It most definitely will make it costlier to taxpayers.