SPRINGFIELD - Amid all the focus on the national budget crisis and the pending fiscal cliff, focus dwindled on yet another financial disaster for the state of Illinois. With Illinois being billions behind in the state's public agency payments and nearly $100 billion in unpaid pension obligations, Illinois is already off the cliff, free falling towards a deepening financial pit. When the state hits bottom, it will be a hard landing because it will land on overburdened Illinois businesses and taxpayers.
Indeed, last week the Governor's budget director and budget experts told the General Assembly that Illinois' fiscal position continues to worsen. Last Monday, Budget Director Jerry Stermer joined with Department of Revenue Research Director Natalie Davila to explain how state revenue will fall short of the estimated budget, weighted with pressures that are statutorily mandated. The Republican House Caucus reported "the increase in mandated payments by the State into public-sector pension funds– will create even greater budget pressure in FY14 of up to $3.6 billion in additional annual spending even without the creation of net new programs."
The Commission on Government Forecasting and Accountability (CGFA) projects based on current economic trends, taxpayers will pay approximately $767 million in new revenue to the State’s general revenue funds in FY14. This $0.8 billion in new revenue will be required to cover that $3.6 billion in projected FY14 spending pressure, the Republican House Caucus reported.
It is not yet clear how this gap can be closed by current State governmental leadership.