Governor gets out the knife
Pritzker plots $700M in executive cuts, blames GOP for lost tax revenue, seeks federal COVID relief
Gov. Pritzker laid out what he acknowledged are “painful” cuts to the budget to make up for lost revenues in the COVID-19 pandemic. (Illinois.gov)
By Ted Cox
With his back against the wall and Congress stymied on a compromise coronavirus relief package, the governor laid out plans Tuesday for $700 million in cuts to programs in the executive branch of state government.
At the daily COVID-19 briefing at the Thompson Center in Chicago, Gov. Pritzker said $4 billion had been lost in tax revenue due to the pandemic over the last fiscal year and the current one running through next June. He cited “tremendous revenue shortfalls” and “job losses that haven’t been seen since the Great Depression,” as well as lost tourism that has worsened the downtown in the state’s hospitality industry. More than half of the $3.9 billion shortfall in the current budget, he added, was due to COVID-19. “The remainder is of a structural nature,” he said, but still requires action.
There, he laid harsh blame on Republicans for defeating the Fair Tax Amendment that would have allowed a graduated income tax in Illinois, projected to raise $3.4 billion in revenue. Pritzker charged that “Republicans have no plan at all” for how to make up that lost revenue, and that “opponents of the fairest long-term solution have put us in this situation.”
Pritzker reminded that his predecessor, Bruce Rauner, left behind a “multibillion-dollar deficit,” much of it amassed during the two-year impasse in which he could not agree with the General Assembly on a balanced budget. “You might say this state suffered a two-year Republican-induced crisis before we ever got to COVID,” Pritzker said. He pointed out that many state programs were “notoriously hollowed out” under Rauner and his predecessors, with state government employment down a quarter from where it stood in 2000. He chided how state spending on public education remains “among the lowest in the nation.” The number of state troopers, meanwhile, fell from 3,000 to under 2,000.
He blamed Republicans “both inside and outside the General Assembly” for scuttling his attempt to “fix the unfair tax system” through imposition of a progressive income tax. Pritzker charged they “fought tooth and nail against the best solution for our working families, lying about what the Fair Tax would do for our state, pledging their allegiance to the wealthy, and throwing lower- and middle-class families under the bus.”
Pritzker rejected what he charged was a GOP desire to tax retirement income, adding that “after all their bluster, it turns out that Republicans have no plan at all to put the state on a firm fiscal foundation. In the wake of their deafening silence, our challenge remains.”
The governor laid out $711.2 million in cuts he can impose immediately on agencies in the executive branch, much of it to come from freezing grants. He planned to cut more than $300 million in government services, including $130 million to be negotiated with unions, $200 million in health care and human services, $135 million in economic development, the environment, and culture, and $71 million in public safety, driven by reductions from a lower prison population.
Pritzker emphasized the cuts in health care would not affect the state’s coronavirus response, saying, “We’ve tried to be very, very careful with the cuts that we’ve made.” But he pointedly added, “I want to be clear. Because tax fairness was taken off the table, there will be a real human impact here.” Calling it “the first phase of our path forward,” comprising what he can do unilaterally as governor, he called on the General Assembly to come to the table with additional cuts in the new year, adding, “I look forward to hearing the Republican proposals for realistic cuts and balancing the budget” because “they have a special responsibility here, having worked so hard to defeat the Fair Tax.”
Unions did not welcome the cuts. Roberta Lynch, executive director of the American Federation of State, County and Municipal Employees’ Council 31, issued a statement calling it “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. 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.” Lynch said the union would lobby for additional federal COVID relief for states, and she urged the General Assembly to “come into session immediately after the holidays to address the state’s fiscal crisis in a fair and equitable manner.”
“We join AFSCME in opposing state budget cuts that place the burden on the backs of public employees who are on the frontlines of our collective fight against COVID-19,” added Illinois AFL-CIO President Tim Drea and Secretary-Treasuer Pat Devaney in a joint statement. “We stand ready to work with our union partners and our leaders in Springfield on solutions that spare this pain for working families and address the state’s revenue shortfall responsibly and fairly.”
Pritzker said he would continue to “aggressively advocate” for federal COVID relief, again citing how all states and local governments are facing COVID-related revenue losses. “Cities and services all across our state have taken a punishing blow, because of COVID, and the Congress needs to act,” he said. But he said he would accept a $750 billion compromise package being floated by U.S. Sen. Dick Durbin, among others, in hopes that a more ambitious package would be passed under President-elect Joe Biden following his inauguration next month.
Again, Pritzker laid blame on Republicans in Congress, saying, “They have so worked against supporting working families across the country,” adding, “At every turn they’ve wanted this to be a smaller and smaller package. They were OK sending trillions of dollars to businesses, large businesses, but now when it comes to helping families they seem to want to cut everything,” including $1,200 stimulus checks and additional unemployment insurance, in addition to aid for state and local governments.
Pritzker said he is not seeking a hike to the state’s flat-rate income tax, adding, “I’m focused on the cuts we need to make in state government” and “that’s all I’m focused on right now.”
Well, that and the pandemic, as Pritzker did praise the first COVID-19 vaccinations earlier in the day at the OSF St. Francis Jump Trading Simulation & Education Center in Peoria and at Chicago’s Loretto Hospital. Distributions of the vaccines, beginning with 100,000 health-care workers, will continue through the week and the weeks ahead.