SPRINGFIELD – Gov. JB Pritzker announced more than $700 million in spending cuts on Tuesday, calling it a “first step” in closing a $3.9 billion revenue shortfall in the current fiscal year’s budget.
As part of those cuts, Pritzker said his office is negotiating with employee labor unions to identify $75 million in personnel cost reductions, which could include furloughs, and that he is establishing a work group to identify possible closures of Department of Corrections facilities due to lower inmate populations.
“These cuts reflect the first phase of our path forward, doing what is within my powers, unilaterally and without the legislature,” Pritzker said during a news conference in Chicago. “This is going to be tough. And as my ongoing conversations with General Assembly leaders would indicate, there is a great deal of work the legislature must do when it convenes next month.”
The plan includes hiring freezes at several state agencies as well as reductions or freezes in several grant programs at the Department of Commerce and Economic Opportunity, the Department of Agriculture and the Department of Natural Resources. It also includes a freeze on school maintenance capital grants, which are funded from casino gaming revenues.
It also calls for delaying a scheduled rate increase for home health aids who provide in-home and community-based services to the elderly through the state’s Community Care Program.
In addition to the spending cuts announced Tuesday, Pritzker earlier announced a plan to borrow $2 billion through the Federal Reserve’s Municipal Liquidity Facility, a program launched earlier this year to help state and local governments close budget gaps that have resulted from the COVID-19 pandemic.
But that still leaves more than $1 billion in savings that will have to be identified, unless Congress authorizes a relief package that includes aid to state and local governments, something that Republican leaders in Congress strongly oppose.
Pritzker said about $2 billion of this year’s shortfall is due to the COVID-19 pandemic, which has drastically cut into state revenues. The rest, he said, is part of an ongoing “structural” deficit in the state budget, one that he had hoped to fill with passage of his proposed graduated income tax amendment, and he lashed out at Republicans in Illinois who worked to defeat that proposal on the Nov. 3 ballot.
“It’s been two years since Republicans announced their wholesale opposition to the ‘Fair Tax,’ and it’s been 40 days since the election, and they have yet to produce any viable answer for balancing the budget,” Pritzker said. “They worked and spent endlessly to defeat the best option Democrats put on the table. And after all their bluster, it turns out that Republicans have no plan at all, to put the state on a firm fiscal foundation.”
But GOP leaders in the General Assembly responded quickly, arguing that the budget shortfall is the result of Democrats being unwilling to cut spending earlier.
“The Governor can blame others all he wants for the state’s financial mess, but the fact of the matter is this is a bed of his own making,” Senate Minority Leader-elect Dan McConchie, of Hawthorn Woods, said in a statement. “Voters fundamentally rejected his graduated tax proposal because of their lack of trust in state government, which stems from years of Springfield increasing taxes and ignoring the reforms that Republicans have put on the table time and time again.”
House Minority Leader Jim Durkin, of Western Springs, said the deficit was built in to the budget that the Democratic-controlled General Assembly passed in May, which was predicated on passage of the tax amendment and the state receiving about $5 billion in federal aid that so far has not materialized.
“Governor Pritzker, (Senate) President (Don) Harmon and (House Speaker) Mike Madigan were repeatedly warned about the dire shortfalls in the fantasy budget that relied upon the passage of the graduated tax and a ‘fingers crossed’ hope for a federal bailout,” Durkin said in a statement. “Instead of living within our means, they attempted to trick voters into raising taxes, and were sorely rejected by Democrat, Republican and Independent voters across the state.”
The state’s largest public employee labor union pushed back on the cuts. Roberta Lynch, executive director of AFSCME Council 31, issued a statement saying the union “is firmly opposed to any demands that unfairly target state employees.”
“Undoubtedly our state faces a severe fiscal crisis and action is urgently needed. However, it is grossly unjust to suggest that frontline state employees who have already sacrificed so much in our current public health crisis should bear an outsized share of the burden of fixing the state’s fiscal crisis as well,” she said in the statement. “Moreover, it is counterproductive in the extreme to target these employees at a time when the need for state services and the demands on state government are greater than ever.”