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 Illinois lawmakers have a history of inaccurately including the sale of one
controversial Chicago landmark in state budgets. But state leaders could finally
cash in on the aging state office building.
Gov. J.B. Pritzker signed Senate Bill 886 into law April 5, granting Illinois
authority to sell the James R. Thompson Center located in the heart of Chicago’s
downtown Loop.
Using revenue projections from nonexistent Thompson Center sales in Illinois
budgets has become a routine accounting gimmick. Lawmakers included between $200
million and $300 million in revenue from a supposed Thompson Center sale in
state budgets former Gov. Bruce Rauner signed into law for fiscal years 2017,
2018 and 2019 – despite never having been able to actually put the building on
the market.
While selling off the Thompson Center might make fiscal sense, lawmakers are
mistaken if they view the one-time sale as any meaningful step toward restoring
the state’s finances.
In fact, despite Pritzker not anticipating a pending Thompson Center sale in his
budget, the governor’s intention to outspend his predecessor is likely to grow
Illinois’ annual deficit to over $3.2 billion. And while Pritzker says switching
the state’s income tax from flat to progressive – on top of a litany of other
proposed tax and fee increases – will achieve budgetary balance, no one outside
the governor’s office has managed to replicate those findings.
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In the longer term, Illinois faces nearly $134
billion in pension debt and a more than $8 billion backlog of unpaid
bills. Even by Pritzker’s overly optimistic revenue projections, a
progressive tax hike would fund the equivalent of 118 days of state
pension costs, or fewer than four months.
Even if the General Assembly passes and Illinois
voters approve a progressive tax hike, it would not be until 2021
that it takes effect. Illinois that year is scheduled to pay $10.5
billion in pension contributions and debt service, more than 27
percent of the state’s expected general revenues.
Pensions will continue eating a larger share of state revenue,
pushing taxes higher and leaving state workers with an ever-shakier
retirement system.
Pritzker must address the primary drivers of the state’s ailing
fiscal condition if he ever wishes to achieve his goals of
middle-class tax relief and sound finances. Instead of pursuing a
progressive tax hike of which many are justifiably wary, Pritzker
should spearhead constitutional pension reform to restore confidence
in state retirement systems and state finances.
Commonsense, bipartisan pension reforms similar to those advanced in
2013, when Springfield last saw a Democratic governor accompanied by
supermajorities in both chambers, can set Illinois on the right
path. A one-time sale of the Thompson Center and endless tax hikes
cannot.
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