(The Center Square) – Gov. J.B. Pritzker said Tuesday the state is preparing to make budget cuts if Congress doesn’t pass another COVID-19 relief package. State lawmakers passed a budget in May that relies on uncertain federal bailout funds and is also dependent on voters passing a progressive income tax amendment in November.
The governor said he has instructed cabinet directors to prepare for cuts of at least 5 percent for the current fiscal year and to submit a 2022 spending outline with a 10 percent reduction in appropriations.
“I can promise you that for everyone and anyone who got into public service, who actually wants to serve the public, this is a nightmare scenario,” Pritzker said.
Pritzker called on President Donald Trump and Congress to work together on a relief package that bails out states. Pritzker said many state and city services will feel the pain if Congress doesn't take action.
“Without that support, our nation’s schools, hospitals, universities, law enforcement, healthcare workers, and firefighters will pay the price, and it will be a heavy price,” he said.
In May, state lawmakers passed a budget for the new fiscal year that spent about $5 billion more than revenue estimates, but the plan was to fill in the gap by borrowing from the Federal Reserve and by voters passing a proposed constitutional amendment to allow the state to enact a graduated income tax that would impose higher tax rates on higher earners.
Although some lawmakers raised concerns about those funding sources, the budget passed. Pritzker signed the budget, which kept spending at the same level as the previous year despite revenue losses and cost increases from the COVID-19 pandemic.
Republicans said they raised concerns about the budget in May.
"House Republicans repeatedly warned the Democrats in May about this looming catastrophe – budgeting for $42 billion in spending with only $37 billion in revenue," House Minority Leader Jim Durkin, R-Western Springs, said in a statement.
"The $5 billion hole, created by the Democrat-controlled government, was to be filled on a wish and a prayer through a Congressional bailout that never happened," Durkin said. "This may be the worst budget in recent memory. My caucus will gladly return to Springfield to fix this disaster with a reality check on our finances and hopefully avoid further damage to our state."
The budget frustrated Ted Dabrowski, president of financial watchdog Wirepoints.com.
"This is by far the most irresponsible budget ever passed by an Illinois legislature," Dabrowski said in June. "It spends a record amount of money in the middle of one of the worst recessions ever. The budget offers no cuts or reforms to provide relief to struggling taxpayers. Instead, it relies on an income tax hike that will burden businesses and residents while they try to recover from the government-imposed shutdown. In all, lawmakers have run up a deficit of over $6 billion and they’re counting on the federal government to bail out the state. Lawmakers continued failures are causing the words 'bankruptcy' and 'Illinois' to increasingly go hand in hand."
On Tuesday, Pritzker said Congress is only scheduled to be in session through the end of this month before lawmakers leave Washington D.C. ahead of the November election.
“Obviously if we get to the end of September, then we are going to start seriously looking at all these cuts, and making sure that we’re implementing the beginnings of what it will take,” Pritzker said.
As negotiations between the Democratic-led U.S. House and Republican-led U.S. Senate have dragged on, some observers have said it looks less likely the next package will include aid for states.
Although the House passed a version of a relief package that included about $500 billion to help states make up for lost revenue, the latest Senate proposal does not include state aid.