UPDATED: Pritzker Will Borrow Another $2 Billion, Mum on Tax Increase Plans
Governor JB Pritzker says he’ll borrow another $2 billion, and will “start with cuts” to help close the $4 billion dollar projected budget deficit facing state government.
Governor JB Pritzker has announced he’s planning to borrow an additional $2 billion from the federal government in an attempt to help close a portion of the state’s multi-billion budget deficit.
The state has already borrowed $1.2 billion from a federal government loan program. Pritzker says the additional $2 billion will be all the state borrows from the federal government, even though the legislature gave him authority to borrow up to $5 billion.
“I am very reluctant to saddle our state with that large an amount of short-term debt,” Pritzker said. “I believe it would be irresponsible to borrow that entire amount given the persistent fiscal pain it would cause over the next three years as we would struggle to repay that entire amount.”
Pritzker says the intention would be to pay back the $2 billion in loans as soon as possible, potentially with stimulus dollars that may be awarded by the federal government.
The legislature’s Commission on Government Forecasting and Accountability recently reported tax revenue was up and estimated the budget deficit for the current fiscal year at $4 billion. The borrowing would cover around half of the expected hole.
We asked Pritzker about our report that some legislative Democrats were expecting him to push through a tax increase during the General Assembly’s “lame duck” session in early January. Pritzker demurred on the tax question but said he will look to make cuts first.
“I think I’ve been pretty transparent with where we are right now which is, we’re going to have to start with looking at cuts to state government. To get where we need to go, some of those cuts are going to have to be relatively painful,” he said. “I have met with the leaders. I have consulted with members of the General Assembly to get their best ideas about what it is that we can cut. Look, I’ve brought a lot of efficiencies to state government since becoming Governor.”
Pritzker did say he’s looking for ideas for cuts from both sides of the aisle.
He has not, though, laid out any ideas for where he would cut $2 billion from the current state budget.
UPDATE (11:03 A.M.):
Rep. Joe Sosnowski (R-Rockford), the top Republican on the House Revenue & Finance Committee, criticized Pritzker for spending prior to the pandemic.
“In his first two years in office, the increased expenditures in both of the Governor's annual budgets was fiscally irresponsible and dug the state deeper into its present hole. Combined with his constant push for tax increases, the Governor’s spending policies have been counterproductive to meeting the main challenges in Illinois; namely the state’s massive unfunded pension liability, Medicaid and health insurance obligations, and our commitment to K-12 education,” Sosnowski said. “What the Governor fails to understand is that you cannot tax and spend your way to prosperity. We have to grow our way back to budget stability with policies that encourage job creation, entrepreneurship and business investment.”
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