Rich Miller

Rich Miller

Get ready to tighten those belts

Spread the love

.

By Rich Miller

.

The Governor’s Office of Management and Budget released a revised state revenue and spending forecast last month for the current fiscal year and it’s pretty good. Its projections for next fiscal year, however, were not nearly as strong.

Projected Fiscal Year 2024 revenues have been revised upward by $1.4 billion, according to GOMB. However, “most of this fiscal year 2024 revenue forecast revision is assumed to be one-time in nature,” the budget office warned.

Spending has also been revised upward by $969 million, leaving a $422 million net surplus.

According to the governor’s office, that revised spending estimate includes the $160 million the governor is spending on migrants. “With the $160 million we’re spending, we still have a $422 million surplus,” said Pritzker spokesperson Jordan Abudayyeh.

Unlike most of the revenue, many of the cost increases don’t appear to be one-time. Of course, it’s unknown how long the migrant crisis will last, but it could very well wind up being a semi-permanent budgetary pressure.

RichMiller

Rich Miller

That net $422 million surplus, if the estimates hold, will come in handy because GOMB is projecting Fiscal Year 2025’s revenues will be $480 million below its revised FY24 estimate. That, combined with increased spending, will result in a projected deficit next fiscal year of $891 million. The deficit is expected to rise to $1.4 billion in FY26 and $1.66 billion in FY27.

Pension expenditures, including for the Chicago Teachers’ Pension Fund, are projected to be $10.14 billion this fiscal year, or 19.7 percent of projected General Funds expenditures including the supplemental appropriations costs, which is a little below where they’ve been for the past few years. Pension payments will rise to $10.5 billion in FY25, or 20 percent of all projected state General Funds spending. And they’ll go up $10.8 billion in FY26, for the same 20 percent of all projected General Funds spending.

In other words, while the pension payments will be high, they’ll be stable and sustainable as a percentage of the budget – as long as the projections hold up.

Education costs are projected to rise by $952 million between this fiscal year and FY26, according to GOMB. The costs as a percentage of the budget will go from 25 percent this year to not quite 26 percent of the budget in FY26. Human services costs will rise $652 million by FY26, and healthcare costs will rise $614 million during the same period.

Let’s get back to that projected $891 million deficit next fiscal year, which starts in July.

Can the projection be trusted? After all, the global pandemic threw all economists off their game. Abruptly shutting down the world’s economy and then trying to turn it back on again, with gigantic bottlenecks and labor shortages emerging everywhere amid massive and sustained government stimulus, resulting inflation, rising interest rates and an economic boom just had no precedent.

In November 2020, near the height of the “second wave” of COVID-19, the governor’s budget office projected this Fiscal Year 2024’s budget would have about a $4.7 billion deficit with a state unpaid bill backlog of $24.5 billion. Instead, we’ve had years of budget surpluses, which along with prudent budgeting have wiped out the bill backlog, allowed the state to put $2 billion into a rainy day fund and pay off much of its non-capital debt while prepaying some pension obligations. Illinois’ bond ratings, which once neared junk status, have steadily risen to the “A” level with all three ratings agencies.

But even before the pandemic, in the fall of 2019, FY24’s deficit was projected to be $3.1 billion with $16 billion in backlogs. A year earlier, in 2018, the current fiscal year’s deficit was projected to be $3.2 billion with a $20.5 billion backlog.

So, again, can the latest projection be trusted? Not completely, but it should still be heeded. After a period of being mostly careful not to drastically increase the state’s base spending, and instead using much of the unexpected revenue bonanzas for one-time items, the legislature and the governor added a ton of money to base spending last spring. If revenues do fall off next fiscal year, base spending will likely have to be cut.

The governor’s budget address is three months away, so the budget-making process is about to begin. We’ve seen countless forecast adjustments during the past few years, so maybe this one will change, too. But, in the meantime, everyone should prepare themselves for some belt-tightening in the months ahead.

Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.

Local News

Kathy Headley

The cleanest sidewalk in Chicago Lawn

Spread the love

Spread the love. Kathy Headley Your correspondent in Chicago Lawn and Marquette Manor 6610 S. Francisco • (773) 776-7778 . In a recent column I told you about stopping at the Community Dinner held on Tuesday evenings in the fieldhouse at Marquette Park. That particular night I sat next to an arborist for the Cook…

Peggy Zabicki

Hot dog! This is a special week

Spread the love

Spread the love. By Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place •  (773) 504-9327 . I would like to start my column with the most important news. National Hot Dog Day is Wednesday, July 17 and is traditionally celebrated all week. I decided to suggest two West Lawn restaurants for celebrating…

GSWNH_HolidayInnRear_070524

Migrants coming to Ford City

Spread the love

Spread the love. Nearly a thousand coming this month to Holiday Inn . By Tim Hadac The Pritzker Administration is converting a vacant hotel in the Midway area to a shelter expected to house as many as 950 migrants. The action is occurring quickly, with migrants expected to move in this month. In a press…

CTAlogo

CTA hiring means more rail service

Spread the love

Spread the love. Orange Line sees 11% jump . From staff reports The Chicago Transit Authority has announced that because of what they described as continued, aggressive recruiting, hiring and training efforts, it has added 8.5% more scheduled rail service in recent weeks for a total of 9% more scheduled service added since April 2024.…

the leadershop logo

LeaderShop Alumni Association to host peaceful rally during Thursday board meeting

Spread the love

Spread the loveThe LeaderShop Alumni Association, a group of volunteers, previous staff members, former board members, funders, donors, and stakeholders who are community minded and energized by the mission of The LeaderShop, will host a peaceful rally in support of change to current leadership for the nonprofit agency. The rally will be held during The…

The Mariano’s store in Frankfort would be among the stores transferred to a new owner if the Kroger-Albertson’s merger is approved. (Photo by Bob Bong)

Comings & Goings: Palos Jewel, Oak Lawn Mariano’s to be sold in merger deal

Spread the love

Spread the loveBy Bob Bong Kroger and Albertson’s this week released the list of stores the companies plan to sell, should a merger between the grocery giants be approved by regulators. Jewel Food Stores in Alsip and Palos Heights are among the stores listed for sale as well as Mariano’s locations in Oak Lawn, Orland Park, and…

The Oak Lawn Public Library, 9427 S. Raymond Ave., kicked off its adult and teen summer reading season with a Local Author Showcase featuring a book fair and 30 authors June 12. (Photos by Enrique Reyes, Courtesy of the Oak Lawn Public Library)

Oak Lawn Library hosts Local Author Showcase

Spread the love

Spread the loveBy Kelly White Oak Lawn Public Library opened its doors to the summer season and to its local authors. The library, 9427 S. Raymond Ave., kicked off its adult and teen summer reading season with a Local Author Showcase featuring a book fair and 30 authors June 12. “Thirty authors, two hours, and…

CRR_NH

Clear-Ridge Reporter and NewsHound July 10, 2024

Spread the love

Spread the love

Palos Heights native Patrick Bertotelli won the Nathan's Hot Dog Eating Contest July 4 in New York. (Photo courtesy of Major League Eating)

Palos Heights native is top dog in famous eating contest

Spread the love

Spread the loveBy Jeff Vorva At one time, it may have seemed impossible for Palos Heights native Patrick Bertoletti to win the Nathan’s Hog Dog Eating contest. After all, Joey Chestnut was roasting opponents year after year by winning 16 titles since 2007 and had a streak of gobbling up championships eight years in a…

Palos Park Mayor Nicole Milovich-Walters is hoping a mobile DMV will return to the village after the July 15 visit was sold out. (Photo by Jeff Vorva)

DMV sellout could mean a return visit in Palos Park

Spread the love

Spread the loveBy Jeff Vorva Palos Park Clerk Marie Arrigoni announced that appointments for the one-day mobile Department of Motor Vehicles visit to Village Hall are sold out. That’s bad news for those residents who were looking forward to taking care of DMV business right there in town. But it was good news to Mayor…

Neighbors

Kathy Headley

The cleanest sidewalk in Chicago Lawn

Spread the love

Spread the love. Kathy Headley Your correspondent in Chicago Lawn and Marquette Manor 6610 S. Francisco • (773) 776-7778 . In a recent column I told you about stopping at the Community Dinner held on Tuesday evenings in the fieldhouse at Marquette Park. That particular night I sat next to an arborist for the Cook…

Peggy Zabicki

Hot dog! This is a special week

Spread the love

Spread the love. By Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place •  (773) 504-9327 . I would like to start my column with the most important news. National Hot Dog Day is Wednesday, July 17 and is traditionally celebrated all week. I decided to suggest two West Lawn restaurants for celebrating…

GSWNH_HolidayInnRear_070524

Migrants coming to Ford City

Spread the love

Spread the love. Nearly a thousand coming this month to Holiday Inn . By Tim Hadac The Pritzker Administration is converting a vacant hotel in the Midway area to a shelter expected to house as many as 950 migrants. The action is occurring quickly, with migrants expected to move in this month. In a press…

CTAlogo

CTA hiring means more rail service

Spread the love

Spread the love. Orange Line sees 11% jump . From staff reports The Chicago Transit Authority has announced that because of what they described as continued, aggressive recruiting, hiring and training efforts, it has added 8.5% more scheduled rail service in recent weeks for a total of 9% more scheduled service added since April 2024.…

the leadershop logo

LeaderShop Alumni Association to host peaceful rally during Thursday board meeting

Spread the love

Spread the loveThe LeaderShop Alumni Association, a group of volunteers, previous staff members, former board members, funders, donors, and stakeholders who are community minded and energized by the mission of The LeaderShop, will host a peaceful rally in support of change to current leadership for the nonprofit agency. The rally will be held during The…

The Mariano’s store in Frankfort would be among the stores transferred to a new owner if the Kroger-Albertson’s merger is approved. (Photo by Bob Bong)

Comings & Goings: Palos Jewel, Oak Lawn Mariano’s to be sold in merger deal

Spread the love

Spread the loveBy Bob Bong Kroger and Albertson’s this week released the list of stores the companies plan to sell, should a merger between the grocery giants be approved by regulators. Jewel Food Stores in Alsip and Palos Heights are among the stores listed for sale as well as Mariano’s locations in Oak Lawn, Orland Park, and…

The Oak Lawn Public Library, 9427 S. Raymond Ave., kicked off its adult and teen summer reading season with a Local Author Showcase featuring a book fair and 30 authors June 12. (Photos by Enrique Reyes, Courtesy of the Oak Lawn Public Library)

Oak Lawn Library hosts Local Author Showcase

Spread the love

Spread the loveBy Kelly White Oak Lawn Public Library opened its doors to the summer season and to its local authors. The library, 9427 S. Raymond Ave., kicked off its adult and teen summer reading season with a Local Author Showcase featuring a book fair and 30 authors June 12. “Thirty authors, two hours, and…

CRR_NH

Clear-Ridge Reporter and NewsHound July 10, 2024

Spread the love

Spread the love

Palos Heights native Patrick Bertotelli won the Nathan's Hot Dog Eating Contest July 4 in New York. (Photo courtesy of Major League Eating)

Palos Heights native is top dog in famous eating contest

Spread the love

Spread the loveBy Jeff Vorva At one time, it may have seemed impossible for Palos Heights native Patrick Bertoletti to win the Nathan’s Hog Dog Eating contest. After all, Joey Chestnut was roasting opponents year after year by winning 16 titles since 2007 and had a streak of gobbling up championships eight years in a…

Palos Park Mayor Nicole Milovich-Walters is hoping a mobile DMV will return to the village after the July 15 visit was sold out. (Photo by Jeff Vorva)

DMV sellout could mean a return visit in Palos Park

Spread the love

Spread the loveBy Jeff Vorva Palos Park Clerk Marie Arrigoni announced that appointments for the one-day mobile Department of Motor Vehicles visit to Village Hall are sold out. That’s bad news for those residents who were looking forward to taking care of DMV business right there in town. But it was good news to Mayor…