Progress Illinois

When the General Assembly agreed to balance this year's budget by racking up billions in new debt and pushing off billions more in overdue bills, there was no denying that the budget next year would include a massive hole. But how big would it be?

Voices For Illinois Children (VFIC) released a sobering estimate today, concluding that the Land of Lincoln will face a $10.4 billion deficit in 2011. It shouldn't come as a surprise to any of our elected officials. As we've pointed out repeatedly, one-time revenue sources like the federal stimulus package and the fund sweeps will dry up next year. At the same time, the state will need to start paying off a myriad of short-term borrowing schemes that lawmakers have resorted to this decade.

Some highlights from VFIC's memo (PDF):

Revenue losses over FY2010:
-Federal ARRA (recovery) funds $1.4 billion
-Pension obligation notes $3.5 billion
-Fund sweeps $350 million

New mandated spending:
-Pension contributions $1.2 billion
-Debt service on pension notes $750million
-Carryover deficit $3.2 billion

Based on this year's $26 billion budget, lawmakers will have to shave more than a third off the top before spending a dime on operations and services. "We are broke," state Sen. Toi Hutchinson (D-Chicago Heights) wrote bluntly in her recent Progress Illinois column today. There's no denying that.

When that day of reckoning comes, Illinoisans certainly won't be alone. Indeed, sales and income tax revenues are plummeting across the nation. But of the 33 states that will start off FY 2011 in debt, none project a burden that comes close to Illinois' baggage, according to a survey by the Center for Budget and Policy Priorities. If lawmakers don't answer the wake-up call and find new sources of revenue this winter, they will eventually have to explain to taxpayers why they're raising taxes and making deep cuts in education, veterans care, and other popular programs. Have fun with that.