The numbers game in Rauner's 2019 budget doesn't add up

Unlike other areas of public policy, budget proposals are supposed to be fact-based. After all, a budget is comprised of numbers, and the numbers have to add up. This is especially true at the state level, since unlike the federal government, 49 of the 50 states - including Illinois - are required to have balanced budgets.

As it turns out, however, numbers can appear to add up, even when they don't. Take, for instance, Governor Rauner's insistence that his proposed General Fund budget for upcoming fiscal year 2019 is balanced. If taken at face value, it is indeed balanced. In fact, when you net his proposed expenditures for the year of $37.61 billion against his projected revenue of $37.96 billion, you actually get an on-budget surplus of $350 million. However, a little digging into the numbers reveals it would be a significant mistake - as in a $1.9 billion mistake - to take his FY2019 proposal at face value.

Start with his revenue projection, which includes $240 million from selling the James R. Thompson Center in Chicago. That'd be great, but as of now, there's no legal authority for the Governor to sell the Thompson Center, and no bidders for the property. Moreover, depending on the enabling legislation, the city of Chicago might have to issue zoning regulations and related permits to allow a new, privatized use of the facility. Oh, and did I mention revenue from sale of the Thompson Center was written into the FY2017 and FY2018 budget proposals - and obviously never materialized? Given all that, it's pretty safe to say Illinois won't be seeing that $240 million in FY2019.

Losing that $240 million brings the Governor's on-budget surplus down to $90 million for the year. And that disappears entirely once his expenditures are reviewed.

For instance, his FY2019 budget proposal fails to account for some $300 million in backpay the courts ordered Illinois to make to state workers. There's no ambiguity here: that's a real, out-of-pocket expense which, together with removal of the Thompson Center revenue, puts the Governor's FY2019 budget proposal $210 million in the red. Goodbye balanced budget. Next, his proposal claims over $400 million in projected savings from yet to be specified changes to the group health insurance program for state workers and retirees. Let's acknowledge that until these "changes" are specified, pass the legislature, and are accepted by public employee unions, there really aren't any "savings" to claim.

Then there's the $526 million in projected savings from shifting some pension and retiree health care costs from state government to local schools, community colleges, universities and the like. Of course, if that happened, they'd be savings for the state only - taxpayers will still have to pay those costs in the form of property taxes. And forcing an increase in property taxes to pay expenses the state has traditionally covered is a pretty bad idea in Illinois, given the state's overreliance on property taxes as a revenue source when compared to other states.

Which is why it's highly unlikely the General Assembly will go along with the Governor's proposal and pass the legislation required to authorize these cost shifts - a fact that apparently isn't lost on the Rauner Administration. Indeed, in one of its recent bond issuances, Illinois state government acknowledged that it "provides no assurances as to how, when or in what form a cost shift proposal may be adopted." Exactly. So let's not count on this questionable proposal generating $526 million in savings.

All told, $1.9 billion in highly unlikely cost savings and/or new revenue sources are used to make the Governor's FY2019 budget proposal appear balanced. While that's the rhetoric, the reality is his proposal not only isn't balanced, if passed, it would likely increase the state's accumulated deficit from a projected $9.75 billion at the end of FY2018, to just over $11 billion at the end of FY2019. And that's not rhetoric Illinois can afford.

• Ralph Martire, rmartire@ctbaonline.org, is executive director of the Center for Tax and Budget Accountability, a bipartisan fiscal policy think tank.