Budget projections recently released by the Governor’s Office of Management and Budget (GOMB) underscored the need for a long-term balanced budget buoyed by structural reforms to boost the economy through job creation and to reduce government spending obligations.
The Governor released his annual, long-term budget projections on November 15, which showed spending is on track to outpace available revenues by more than $5 billion in Fiscal Year 2017. According to the report, “Barring significant budget and policy changes, Illinois’ rate of economic growth is expected to continue to lag the national rate of economic growth over the next five years.”
According to GOMB, estimated general funds spending for Fiscal Year 2017 is projected to reach $39 billion, though it’s projected the state will only bring in about $33.7 billion in revenue. Without spending or revenue changes, the fiscal year 2017 budget is anticipated to be $5.3 billion out of balance. The Governor’s fiscal office also pointed out that the state may increase an additional $3 billion in spending if obligations carried over from the previous fiscal year are paid in fiscal year 2017.
The GOMB report underscored that the Illinois economy is the state’s primary budget issue, particularly when considering Illinois has consistently had a higher unemployment rate. The fiscal overview noted that although 13.6 million jobs were created nationally since 2000, Illinois has only gained 100 jobs.
If the state had simply grown at the national average, according to GOMB Illinois would have over 620,000 more jobs today. Review of job growth of Illinois’ neighboring states showed an average of more than 92,780 during that same time period.
When taking into account a current bill backlog that tops $8 billion, the GOMB projections indicate that without significant change the state would end fiscal year 2017 with a bill backlog of $13.5 billion.
The report noted that even taking into account modest increases in spending, without changes to the status quo the state is projected to run annual budget deficits of $6 to $7 billion over the next five years. If this was to happen, it would increase the bill backlog to an estimated $47 billion by the end of Fiscal year 2022.
The general funds spending number includes appropriations enacted in the stopgap budget, continuing appropriations, statutory transfers, court orders and consent decrees—along with an assumption that additional appropriations will be enacted for the Group Health Insurance program, state operations, some human services programs and higher education.