Gov. JB Pritzker has “revised” his remarks
about not raising taxes to balance the budget.
“It’s very important that we live within our means in
this state, and that we not resort to tax increases as a way to, you know, to
balance the budget,” Pritzker said on Jan. 30.
Last week, when I asked him about his apparent rejection
of tax hikes, the governor said: “What I said last week was that we should be
living within our means and doing everything we can to do that. I’ve also said
in previous press conferences, and still believe that taxes should not be the
first but rather the last thing that we look at.”
The latest report from the Governor’s Office of
Management and Budget projected Illinois is facing a $3.2 billion deficit in
Fiscal Year 2026. Pritzker’s people have apparently been telling everybody who
walks in the door that the state has no money to create or significantly expand
the programs folks are demanding.
I’m told they’ve also hinted to at least some that there
will be no new revenues proposed in the governor’s budget plan.
However, the door may still be open a crack for new
revenues late in the budget negotiations, perhaps meaning “the last thing that
we look at.”
Last year’s state revenue bill had a very rough time
passing the House when several, mainly white, moderate Democrats refused to
vote for it. That has been taken by some to mean that tax hikes could be out of
the question this spring.
But a longtime Statehouse type made a good point. It’s
not that those Democrats were against tax hikes, he said, it’s that they
believed they didn’t get anything to speak of out of in last year’s budget. “If
they believed they were getting something, a Democrat will go (pantomimes
voting for a bill), ‘Can I vote again?’”
To sell any tax hike back home, they must show how their
districts benefit. However, events could overtake them.
The Illinois Department of Healthcare and Family
Services’ list of Medicaid recipients by House and Senate districts has been
urgently circulated among legislators for the past several days, mainly because
of congressional threats made to reduce or eliminate federal funding for the
Medicaid expansion program.
Medicaid expansion covered all adults under the age of 65
who earn less than 133% of the federal poverty level. It has drastically
decreased mortality rates for middle-aged people and has generally been seen as
a success. 40 states plus the District of Columbia have opted into the program,
which reimburses states for 90% of their costs. That large federal share is why
several national Republicans are pushing to either end the program or
significantly reduce the reimbursement rate.
Healthcare and Family Services says 772,233 Illinoisans
were enrolled in the expansion program at the end of Fiscal Year 2024.
Illinois spent about $815 million on the Medicaid
expansion program during the last fiscal year, HFS says. The feds paid out
$7.34 billion because, as noted above, they pick up 90% of the total tab, which
is far more than the 50% match Illinois receives for “regular” Medicaid.
The point here is that Illinois has a trigger law which
requires the state to withdraw from the expansion program three months after
federal reimbursement falls below 90%.
So, if the feds had dropped its reimbursement rate to 50%
last fiscal year, Illinois would’ve had to shell out $4.1 billion – about a
$3.3 billion increase just to keep pace. That’s money the state doesn’t have.
Hence, the trigger law.
The House districts with the most Medicaid expansion
recipients in FY24, according to HFS, were Rep. Bob Rita’s 28th (15,557); Rep.
Sonya Harper’s 6th (15,118); Rep. Nick Smith’s 34th (14,631); Rep. Sue
Scherer’s 96th (14,103); and Rep. Lilian Jiménez’s 4th (14,055).
Rep. Rita Mayfield’s district had 8,714 expansion
recipients last fiscal year. The Gurnee Democrat told my associate Isabel
Miller, “I do believe that we shouldn’t drop not one person. I think that we
need to find the money one way or another,” suggesting that “reasonable cuts”
be made to state agencies. “I think that if we held everybody at FY24 levels,
we would have enough money to at least fill in some of these gaps,” she said.
Sen. Dale Fowler, R-Harrisburg, said, “If changes in
federal funding occur, I am committed to working with my colleagues to explore
all options for preserving essential healthcare services and protecting our
most vulnerable residents.” Fowler represents 18,174 Medicaid expansion
recipients.
I doubt they’ll have the cash to do much of anything
without new revenues.
This article appears in The impossible task of providing child care.
