New revenues welcome, but state debts remain biggest issue

Cash windfalls create opportunities and raise questions.

Fired up by unanticipated revenue growth, Gov. JB Pritzker recently raised the possibility of tax cuts.

Holy cow. It’s not even an election year.

Next year, of course, is one, and, as a presidential aspirant, Pritzker would love to campaign on a reputation as a tax-cutting governor.

But let’s not get carried away with recent revenue forecasts touting estimates of an additional $1 billion in revenue for the current fiscal 2023 and fiscal 2024, which begins July 1.

While Pritzker is riding high on good budget news, Comptroller Susana Mendoza recently suggested taking a go-slow approach. She said “estimates do not equal actual dollars” and “we can’t spend money we don’t have.”

There are a few other issues, as well. The state has a rainy-day budget fund that needs another $1 billion. Plus, it has a huge pension debt – about $160 billion – that hangs over the state’s head like the Sword of Damocles.

There is no question that, for the short term, Illinois is enjoying a revenue surge that has eased operating budget woes.

“I would like to see – as we feel comfortable with these new revenues coming in and their stability; and I think we’re seeing a few years in a row now of the stability of that revenue – that we should be talking about whether there are tax cuts that we can implement,” Pritzker said.

Pritzker’s statement was warmly received by Republican House Leader Tony McCombie. She called the governor’s talk of tax cuts an “exciting prospect for families across our state.”

She’s right, for two reasons.

Allowing people to keep more of the money they’ve earned is a good thing. So is denying legislators the opportunity to throw more tax dollars out the nearest window.

Still, there are reasons to be skeptical.

Last year, Pritzker oversaw the election-year passage of $1.8 billion in temporary tax cuts. He vehemently denied his action was in any way related to his reelection bid. Some people may even have believed it.

While Illinois’ operating budget is safe for the short term, it’s a different story in terms of long-term debt. That’s why the governor has made it a point to put additional funds in beyond what was statutorily required.

As welcome as Pritzker’s talk of undefined tax cuts is, the bigger issue is the state’s horrendous public-pension debt.

Public opinion, of course, will differ on this issue. But one thing seems certain. In a year, when Pritzker even mentions tax cuts, it seems highly likely that some legislators’ desire to raise state income taxes via a progressive-income-tax constitutional amendment won’t go far.

In that respect, the governor’s words are entirely welcome.

– Champaign News-Gazette