Illinois governors abuse budget projections, leaving taxpayers damaged

Illinois lawmakers can’t budget responsibly if they don’t know how much they have. Governors have a history of fudging the numbers to get what they want.

For years, Illinois governors have been exploiting the budget projection process to increase spending and advance their political goals, resulting in greater financial instability, higher taxes and reduced trust in government.

Instead, governors should use outside budgetary sources to develop their budgets. Their own political considerations shouldn’t hamper budget planning.

State law requires two entities estimate revenue for the coming year: the Governor’s Office of Management and Budget, or GOMB, and the Illinois General Assembly’s Commission on Government Forecasting and Accountability, known as COGFA.

The GOMB estimate is used in the governor’s budget proposal, enabling the governor to shape the legislature’s view of revenue. These estimates rarely match either actual revenue or the COGFA’s numbers.

According to the National Association of State Budget Officers, estimates within 0.5% of actual revenues are considered “on target.” The GOMB has met this standard only twice since 2011.

Illinois Gov. J.B. Pritzker’s record  $55.2 billion budget for fiscal year 2026 continues the historic pattern, relying on $1.5 billion in extra, unaccounted for revenue and nearly $500 million in “revenue adjustments.” These figures come from an agency under his executive purview, the GOMB.

Now, a new report from COGFA, which is free from gubernatorial control, shows the state faces as much as a $1.2 billion shortfall and potential tax hikes. That illustrates the financial consequences of inaccurate projections.

This isn’t the first time the GOMB has been wrong. For years, Illinois governors have been exploiting the budget projection process to advance their political goals and spend what they want.

Political motivations

Budget forecasts should be driven by data rather than political agendas. While the GOMB and COGFA rely on the same external econometric firms for their projections, their final revenue estimates often differ, sometimes significantly. These discrepancies arise from how each office interprets and analyzes the data.

While some variation is expected because of differences in methodology, there is concern that political and policy factors may shape the final numbers, especially when examining the most extreme instances of overestimated and underestimated revenue projections since 2000. This suggests that financial forecasting may be influenced by factors beyond objective economic modeling.

In his 2013 budget proposal, former Illinois Gov. Pat Quinn strongly advocated for either extending or making permanent the 2011 income tax increase.

To illustrate its importance, Quinn presented two separate budget proposals to the General Assembly. One showed the tax hike in place and another showed it expiring and forcing “severe” cuts.

To make the tax hike seem more necessary, Quinn’s budget office presented revenue estimates significantly underestimating expected income: fiscal year 2013 was off by about $2 billion and 2014 by about $1 billion. The fiscal outlook was less dire than Quinn had portrayed, raising questions about whether he intentionally low-balled revenue expectations to justify keeping the tax increase.

In 2016, former Gov. Bruce Rauner sought to balance Illinois’ state budget while avoiding any new tax increases, aligned with his broader fiscal conservatism. He aimed to achieve this goal through budgetary restraint and reforms.

Revenue projections played a crucial role in this effort. With higher revenue, Rauner could afford to keep more spending items and avoid cuts and new taxes. The GOMB overestimated state income by approximately $1.3 billion for fiscal years 2016 and 2017.

This created a shortfall and contributed to growing budget deficits. The miscalculations made the spending plans unsustainable, worsening the state’s already precarious fiscal situation. As a result, Rauner faced significant challenges maintaining financial stability while honoring his commitment to keep taxes low.

Similarly, Pritzker has significantly expanded state spending in recent years, largely thanks to massive windfall revenues, artificially inflated tax revenues because of stimulus from the federal government, neither of which are permanent, as well as new taxes introduced in 2019. With a steady flow of funds, his administration has pushed ambitious spending initiatives without immediate concern for budget shortfalls. While Pritzker’s budgets have benefitted from these windfalls, those funds have dried up and his risky budget estimates will leave taxpayers at risk.

Financial projections released in November showed a looming $3 billion budget shortfall for fiscal year 2026. If accurate, that would present major challenges for Pritzker’s administration during the budgeting process and force spending cuts or tax hikes.

In a suspicious turn of events for Pritzker, just days before his February budget address, the GOMB released a revised financial report. This revision significantly altered the fiscal outlook, raising revenue estimates by $1.5 billion, adding an additional $500 million through so-called “revenue adjustments” and effectively reducing the projected deficit by $2 billion on paper.

This politically expedient move allows Pritzker to claim a political win and avoid difficult budgetary decisions to keep claiming a streak of “balanced” budgets.

Despite the optimistic outlook from the GOMB, the latest COGFA report continues to predict flat state revenues. The commission estimates the state will still face as much as a $1.2 billion shortfall in 2026.

Conclusion

This all leads to a question of impartiality by the GOMB and its role in budgetary planning. Given the office answers to the governor, should it have such an unrestrained role in the budgeting process?

One solution is to not use revenue projections at all, instead tying spending growth to a spending cap. One bill currently proposed in the Illinois General Assembly would tie spending growth to averages of gross domestic product growth.

Illinois is currently the fifth worst in spending when compared to GDP historically, according to data from the National Association of State Budget Officers and the Bureau of Economic Analysis. That could be fixed by the proposal to link spending to GDP.

If history is any guide, there is reason to be skeptical of overly optimistic revenue estimates. Time will tell whether Pritzker’s office has correctly assessed the state’s fiscal outlook or if it’s a continuation of Illinois leaders using inaccurate projections for political purposes.