Almost three months past the new fiscal year and the budget stalemate continues. Though the state has continued to function without a budget in place, operating without a balanced budget will have long-term consequences.
With no end to the impasse in sight, the courts have been asked to intervene. The result is court-ordered state spending of almost $14 billion to various state programs. Added to the $18.4 billion being paid out for continuing, statutory, or enacted appropriations, Illinois has been placed on a spending path that will exceed revenues by more than $5 billion if we add in the services that are not receiving state funds.
Years of overspending and refusing to enact commonsense reforms have come at a hefty cost for Illinois, with both taxpayers and the state’s business climate feeling the strain. Recent figures from the Illinois Department of Employment Security and the federal government show Illinois’ economy continuing to struggle, unlike most of our neighboring states.
Courts driving state funding
As the state continues to operate despite the ongoing budget stalemate, a number of services and programs have turned to the court system to enforce state payment. As a result, the courts have become increasingly involved in dictating state expenditures, with many programs and services being funded through court orders and consent decrees.
As it currently stands, it’s estimated that the state will spend $13.7 billion to fund payments appropriated or upheld through these court orders and consent decrees. This includes funding for statewide Medicaid payments, DCFS and Department of Juvenile Justice programs, Early Intervention funding, and state employee salaries.
When adding the court-ordered spending to the predicted $18.4 billion the state is paying due to continuing, statutory, or enacted appropriations, it’s estimated that the state is on track to have spent just over the anticipated revenue intake of $32 billion for the coming fiscal year—though more than $5 billion in state services and programs remain unfunded, which cannot continue. Examples of programs yet to be funded include the entire higher education system, the state’s Group Health Insurance Program, non-federally funded public health programs, the Monetary Award Program, and Autism grants.
I have cautioned that continuing down a spending path that exceeds revenue intake will only cause more issues in the long run, burdening taxpayers and leaving programs underfunded.
Rather than allowing the courts to appropriate funds without reforms, I will continue to push for a balanced budget that aligns spending with state revenue, while providing for the state’s most vulnerable. I believe that if Mr. Madigan would agree to the necessary reforms to turn Illinois around, we would have a balanced budget in short order with a combination of some spending cuts and some tax increases. Most of us would be willing to accept modest tax increases if we believed that our tax dollars were being well spent and that fraud and abuse were under control. Unfortunately, in Illinois there is little evidence to support such a dream.
Uncertainty continues for Illinois economy
While Speaker Madigan and President Cullerton resist pro-jobs reforms in Springfield, Illinois’ economy continues to struggle statewide.
The latest figures from the Illinois Department of Employment Security (IDES) gives the economy a mixed review at best. Illinois’ jobless rate dropped for the third straight month, to 5.6 percent, but the state lost a net of 900 jobs compared to the previous month. Employment in Illinois has grown slightly so far this year, but at a rate of only 0.3 percent -- half the average growth rate of the rest of the Midwest and worse than each of our neighboring states. If Illinois had simply kept pace, according to IDES, employers would have added an additional 34,000 jobs since the start of this year. The overall number of jobs in Illinois is still about 75,000 below our pre-recession peak.
Without implementing some of the pro-jobs reforms that my fellow Republican lawmakers and I support in Springfield, Illinois can expect more of the same results and more families and businesses looking for an escape.
Blue-collar jobs struggling in Illinois
A deeper dive into the latest jobs figures reveals a troubling picture for a backbone of Illinois’ economy: blue-collar jobs. Illinois lost 2,200 manufacturing jobs in August alone; 10,000 since the start of the year; and more than 300,000 since the turn of the century.
But that drop is highlighted by a much rosier picture in neighboring states. According to data from the federal Bureau of Labor Statistics, Illinois is the only Great Lakes state to lose factory jobs over the past three years. As Illinois dropped 13,800 manufacturing jobs, neighboring state Wisconsin gained 15,500, Indiana gained 35,000, and Michigan gained nearly 60,000.
Additionally, Illinois has added only 13,400 payroll jobs in 2015, while Indiana has added 44,900 jobs since January. Job growth figures from surrounding states show an additionally 26,600 jobs were added in Wisconsin, 26,700 jobs in Missouri, and 16,800 jobs were created in Iowa.
The difference in job growth for the region is especially concerning when considering the population differences between the neighboring states. While Iowa only has a reported job growth number of 16,800 for the year, Illinois has more than four times the population size of Iowa and twice as many residents when compared to Wisconsin or Missouri.
I will continue to work alongside the Governor as we push for business reforms that would help manufacturing jobs, including workers’ compensation reform and lawsuit reform, as well as property tax reforms that would help businesses considering relocation because of Illinois’ high costs.