Despite imposing one of the highest overall tax burdens in the nation, Illinois lawmakers have left the state poorly prepared to deal with the fallout from the COVID-19 pandemic.
For years, state lawmakers have known that the state’s finances are so out of balance that a minor blip in the economy could have severe repercussions for the state and its residents. But for years, these concerns were ignored. The state limped by with budget tricks and other sleights of hand as the debts piled up.
As Gov. J.B. Pritzker and lawmakers work to reduce the spread of COVID-19, the situation has served to highlight just how important decisions in Springfield are for Illinoisans in every part of the state.
The latest challenge for Illinois will be paying unemployment claims for the growing number of people who are out of work as Pritzker ordered non-essential businesses to close to slow the number of COVID-19 cases. Unemployment numbers are expected to skyrocket after Pritzker extended the emergency stay-at-home order through the end of April.
On Tuesday, Pritzker acknowledged what many budget hawks have known for years – Illinois’ unemployment fund has one of the lowest solvency levels of any state in the nation. The state’s unemployment fund will need a bailout.
“The answer is ‘no,’ but fortunately, the federal government in the latest stimulus package provided a significant amount of funding for unemployment,” Pritzker said Tuesday when asked if the state’s unemployment fund would remain solvent. “We are also allowed in a state to dip below the reserves that exist if we need to borrow from the federal government.”
Pritzker is confident that federal help will see the state through. But borrowing will further squeeze the state’s budget and once again leave us lagging behind the rest of the nation when the focus shifts to recovery.
For voters, this should be just as stark of a reminder as the state’s sorry rainy day fund, which is for all practical purposes empty.
When we do get on the other side of the coronavirus pandemic, it’s going to be a long and rough economic recovery. Bold, but necessary, policy decisions will need to be made.