Democrats and Republicans Disagree on State Budget Deficit
House Majority Leader Rep. Greg Harris (D-Chicago) says it could be cuts or some of Governor JB Pritzker’s proposed budget cuts or closure of tax “loopholes” used to close a $1.3 billion hole in the upcoming FY22 budget.
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With just days remaining in the spring legislative session, House Democrats say they’re still trying to find a way to fill an expected $1.3 billion hole in the state budget, but Republicans say Democrats are unwilling to get their spending habits in check.
House Majority Leader Rep. Greg Harris (D-Chicago) said at a news conference Thursday Democrat working groups were trying to work between cuts or Governor JB Pritzker’s proposed tax “loophole” closures and cost savings ideas.
Harris says the idea of cutting $1.3 billion in state services would be dramatic.
“Those are still being worked through by committees, but if you have to cut $1.3 billion, nothing is left unscathed,” Harris said. “Education will be cut, colleges and universities will be cut, severe cuts to our human services, it’s a very bad scenario.”
But Sen. Chapin Rose (R-Mahomet), the top Senate Republican budget negotiator, says Democrats are presenting a false choice.
Rose says because the Governor’s Office of Management and Budget has revised revenue estimates up by about $1.5 billion in recent weeks, there’s more than enough money for the legislature to balance the budget, especially with over $8 billion of federal bailout dollars coming in.
“These guys have literally got a $10 billion windfall, and yet Greg Harris is running around saying they’re $1.3 billion in the hole,” Rose said. “How much do they need? Are you serious? How much more money are they going to spend?”
Rose says Democrats are scrambling to fit their policy priorities into a last minute budget that has been delayed because of concerns over redistricting.
Meanwhile, Pritzker and other top Democrats they have agreed to a plan to repay the money the state borrowed from the federal government during the pandemic.
The state borrowed around $3 billion from the Federal Reserve last year. Around $2 billion is still on the books. .
In a news release Thursday, Pritzker said the state’s better-than-expected tax revenue will allow it to pay off the loan early, saving the state about $100 million in interest charges.
“Repaying the federal government is an important step in our efforts to ensure the state remains on sound fiscal footing,” Pritzker said in a statement. “The General Assembly has been a critical partner in utilizing the federal dollars to help the most vulnerable get through the pandemic. I also credit the Comptroller in strategically managing cash flow in these trying times.”
Rose says the state has no debt service to repay on the upcoming fiscal year, so leaders should have waited to see if they could use federal American Rescue Plan dollars to pay back the remainder of the loan.