CHICAGO (CBS) — With revenue from income taxes, sales taxes, lottery ticket sales, and gambling operations all facing steep declines due to the coronavirus pandemic, Illinois Gov. JB Pritzker said the state is facing a $2.7 billion budget shortfall this year, and revenue projections for next year are down $4.6 billion.
“You don’t have to be an epidemiologist to see that the virus is going to hit our budget hard, a reality that is being visited upon every state in the United States,” Pritzker said at his daily COVID-19 briefing on Wednesday.
The governor said his budget team is projecting a $2.7 billion budget gap for fiscal year 2020, and $4.6 billion for next fiscal year, which begins in July. After accounting for paying back the short-term borrowing required for the current fiscal year, next year’s budget gap is estimated at a total of $6.2 billion. Pritzker said, if his plan for a graduated income tax doesn’t pass in November, that gap will balloon to $7.4 billion.
“This is a public health crisis, but it is accompanied by massive economic disruption that’s unprecedented in modern history,” Pritzker said.
As of Wednesday, Illinois now has 24,593 cases of coronavirus, including 948 deaths. That’s an increase of 1,346 cases, and 80 additional deaths in the past day.
In February, the governor presented his plan for a balanced budget for the 2021 fiscal year, which starts in July. He said his plan would have been the next step on placing Illinois on a path toward fiscal health, but “based on our new preliminary projections on the economic impact of COVID-19, that path has fundamentally diminished to the narrowest of paths.”
The governor said, in his first year in office, the state has reduced its backlog of unpaid bills by nearly $1 billion and its penalties on late payments from $950 million just before he took office to $100 million this year.
“This crisis, however, will take us off course for a little while, and we must put ourselves back on track as soon as we can,” he said.
Pritzker said budget experts are estimating a 7% drop in state-sourced revenue for the current fiscal year, including a $1 billion decline in income tax revenue, after pushing back the tax filing date until July 15, after the start of fiscal year 2021.
The governor said he is asking agency directors to enact spending reductions and efficiencies beyond what already had been planned. He also said he’s working with the state treasurer and state comptroller to leverage more than $700 million in other state funds to support operation of state government, and issue up to $1.2 billion in short-term borrowing.
Pritzker also has ordered all state agencies to put non-essential purchases and expenditures on hold, and to freeze all non-essential travel and hiring. The governor’s office said that should save at least $25 million this year.
Asked if the state should reconsider his proposal for a graduated income tax in light of the coronavirus pandemic, Pritzker said he’s not looking at just one year’s budget, and believes a graduated income tax is a fairer system long-term.
“It’s on the ballot for November. I think people will be making their own decisions about it. I would argue, in a way, that we may need it now more than ever,” he said. “This isn’t just about one year, it’s about fixing the structural deficit that exists for the state.”
Meantime, the governor confirmed that his administration has arranged for two charter flights of personal protective equipment from China, including ventilators, masks, gloves, gowns, protective eyewear and hand sanitizer. According to published reports, Pritzker had been keeping details of the shipments secret, out of fear the Trump administration might seize the supplies for the federal stockpile.
“I’m responsible for making sure that we have the PPE and the ventilators that we need for the state. The federal government, as we’ve talked about many times, has not been a great partner in that,” Pritzker said.
Pritzker said, while the federal government has helped Illinois acquire PPE for the fight against COVID-19, those supplies were enough to last only a few days.
“We’ve had to search the entire globe to find what we need. Shipping is very difficult, and so we’re doing what we need to do to get the kind of PPE that we need. It is true that the federal government seems to be interrupting supplies that are being sent elsewhere in the nation, and so I wanted to make sure that we received what we ordered,” Pritzker said.
A database of COVID-19 purchases maintained by the Illinois State Comptroller’s office lists two invoices with FedEx Trade Networks Transport, of $888,275 each, for charter flights to Shanghai for the state’s coronavirus response. The governor said he’s not sure exactly when those shipments will arrive.