New Illinois governor eyes larger fiscal year 2020 budget hole




  • In US
  • 2019-02-08 22:16:42Z
  • By By Karen Pierog
Illinois Gov.
Illinois Gov.  

By Karen Pierog

CHICAGO (Reuters) - Illinois faces a $3.2 billion deficit in its upcoming fiscal 2020 budget that is nearly 16 percent higher than previously projected, Governor J.B. Pritzker's administration said on Friday.

A five-year fiscal forecast released by former Republican Governor Bruce Rauner's administration in November showed a $2.76 billion hole in the general funds budget for the fiscal year that begins July 1.

The Democratic Pritzker administration, which took office in January, said in a report the forecast did not take into account additional money Illinois needs to spend on higher education, public safety and other areas to deliver basic services, increasing the gap to $3.2 billion.

Deputy Governor Dan Hynes said Pritzker will propose a balanced fiscal 2020 budget on Feb. 20.

"It will require innovative and new revenues that are realistic," he said, adding that the governor has identified legalizing recreational marijuana and sports betting as potential revenue producers in the short term and a graduated income tax in the longer term.

The report took aim at Rauner for waging an "ideological war" that plunged the nation's lowest-rated state deeper into debt.

"Illinois already had fiscal challenges to overcome, but the previous administration drove the state into a ditch," the report stated, warning that rebuilding a financial foundation could take more than four years.

A two-year budget impasse between Rauner and Democrats who control the legislature, along with a huge unfunded pension liability and chronic structural budget deficits, led to downgrades that pushed Illinois' credit ratings to a notch or two above the junk level.

The state's unpaid bill backlog, a barometer of the budget imbalance, will likely exceed the Rauner administration's $7.82 billion forecast for the end of fiscal 2019 by $500 million, according to the report.

Moody's Investors Service on Tuesday said Illinois' Baa3 rating could be impaired if the state relies on one-time revenue measures or increases its bill backlog to balance the upcoming budget.

The credit rating agency also listed the state's escalating pension contributions as a top issue for the new governor. Those payments are projected to climb by 8 percent to $9.22 billion in fiscal 2020 for Illinois, which ended fiscal 2018 with a $133.5 billion unfunded pension liability.

A separate transition report released by the governor on Friday said Illinois could boost pension contributions through a dedicated revenue stream, create a "sustainable" amortization schedule for payments, and negotiate a "one-price" investment management fee for its five retirement funds.


(Reporting By Karen Pierog; Editing by Tom Brown and Diane Craft)

COMMENTS

More Related News

Aurora shooting victims ranged from intern to plant manager
Aurora shooting victims ranged from intern to plant manager

CHICAGO (AP) - The victims of a disgruntled employee who opened fire at a suburban Chicago industrial warehouse were co-workers ranging from an intern to the plant manager. A look at the victims:

Illinois factory gunman killed victims after being fired
Illinois factory gunman killed victims after being fired
  • US
  • 2019-02-16 18:03:30Z

Gary Martin, 45, armed himself with a .40 caliber handgun, which he owned illegally, before reporting for a meeting where he was told he was fired, Aurora Police Chief Kristen Ziman told a news conference. Most of the workers killed in the shooting on Friday at the Henry Pratt Company plant, 40 miles (65 km) west of Chicago, were in the room where Martin was terminated, Ziman said. Five police officers were wounded by gunfire before Martin was killed in a shootout with police.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: US

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.