The Office of Management and Budget late Friday released a five-year forecast on Illinois state finances, predicting budgetary shortfalls in the upcoming five years.
The report predicts “sizeable deficits” in the state’s General Funds budget in the coming years, with debt growing. The deficits would range from $4.8 billion in FY22 to $4.2 billion by FY26.
“From day one I have been committed to providing a transparent accounting of our fiscal situation and have once again begun working with leaders in the General Assembly to address our challenges,” Gov. J.B. Pritzker said in a statement following the projection’s release.
“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. 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.”
The governor earlier this year asked all state departments to include a 10 percent cut in spending for their planned FY22 budgets. The report states that Pritzker’s administration will seek to close tax loopholes in order to bolster state revenues in lieu of the graduated income tax amendment that was rejected by voters earlier in Nov.
The report notes that the COVID-19 pandemic has had a severe impact on the state and national economies, but only a small portion can be attributed to stay-at-home orders and other government restrictions.
“COVID-19 and the stay at home orders had a widespread impact on the economy, but the government-imposed closures appear to only be a part of what caused this massive contraction of employment and economic output. Austan Goolsbee and Chad Syverson, economists at the University of Chicago, examined ‘cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries.’ They determined that ‘while overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 percentage points of this.’,” the report states.
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Allison Richard
