Grim fiscal forecast awaits Illinois' new
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[November 17, 2018]
CHICAGO (Reuters) - Illinois' new
governor faces a budget deficit that could triple in size, as well as a
backlog of unpaid bills that could surpass the state's record high,
according to a new five-year fiscal forecast from outgoing Governor
The Republican governor lost his bid for a second term in office to
Democrat J.B. Pritzker in the Nov. 6 general election in what was the
most expensive governor's race in U.S. history.
In January, Pritzker, a billionaire heir to the Hyatt Hotel fortune,
will inherit a state with credit ratings just a notch or two above junk
due to chronic unbalanced budgets and a $129 billion unfunded pension
The Rauner administration's economic and fiscal policy report dated
Thursday estimated the gap in the current general funds budget could top
$1 billion if Illinois is required by a labor relations board to pay as
much as $500 million to members of its largest public-sector labor
The five-year forecast shows the budget deficit jumping to $2.7 billion
in fiscal 2020, which begins on July 1, and to $3.4 billion in fiscal
2021. Illinois' pile of unpaid bills, which reached a record-high $16.67
billion in 2017, would climb from $7.8 billion at the end of fiscal 2019
to $10.6 billion in fiscal 2020 and to $17.3 billion in fiscal 2022,
according to the forecast.
There was no immediate reaction to the forecast from Pritzker's team on
Friday. Following the election, Pritzker said his top priority was a
balanced budget as he unveiled a 17-member bipartisan committee on
fiscal issues composed of current and former state lawmakers, along with
government finance experts and union and business representatives.
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Managing Partner of The Pritzker Group J.B. Pritzker speaks at the
Clinton Global Initiative America meeting in Chicago, Illinois,
June 13, 2013. REUTERS/Jim Young
As for the $38 billion fiscal 2019 budget, actual savings from a
voluntary buyout of pension benefits may fall short of an
anticipated $400 million, according to the report. With the fiscal
year nearing its December halfway point, Illinois' three largest
retirement systems have yet to launch the program.
On the revenue side, $300 million in one-time revenue from a stalled
sale of the main state office building in Chicago has been removed
from the budget, while Illinois is banking on increased sales taxes
due to a recent expansion of collections to out-of-state internet
retailers, the report said.
(Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis)
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