A new report from the Governor’s Office of Management and Budget shows that without significant new revenue, spending cuts or a combination of both, the state will face a budget deficit of $3.9 billion in the current fiscal year and continuing deficits of $4 billion or more in each of the next five fiscal years.
It also projects that the state’s backlog of unpaid bills could grow to as much as $33 billion by fiscal year 2026, up from the current backlog total of about $7.8 billion, if lawmakers do not make structural changes.
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SPRINGFIELD – A new report from the Governor’s Office of Management and Budget shows that without significant new revenue, spending cuts or a combination of both, the state will face a budget deficit of $3.9 billion in the current fiscal year and continuing deficits of $4 billion or more in each of the next five fiscal years.
It also projects that the state’s backlog of unpaid bills could grow to as much as $33 billion by fiscal year 2026, up from the current backlog total of about $7.8 billion, if lawmakers do not make structural changes.
“Sizeable deficits in the general funds budget are projected for fiscal years 2022 through 2026, ranging from $4.8 billion in fiscal year 2022 and falling to $4.2 billion by fiscal year 2026,” the report stated.
The report does not actually predict that those deficits will occur. Instead, it is intended to show what would happen under the state’s current revenue structure and spending obligations.
The report, which was released late Friday, attributes much of the current fiscal year’s deficit to the economic impact of the COVID-19 pandemic, which has resulted in dramatic revenue losses for state and local governments throughout the country.
But it also notes that voters’ rejection of Gov. JB Pritzker’s proposed constitutional amendment to allow for a graduated income tax on the Nov. 3 ballot – which would have allowed higher tax rates to be levied on people with higher incomes – means the state will have fewer tools at its disposal to address its ongoing “structural” budget deficits.