Mendoza warns state lawmakers not to spend federal stimulus funds on new projects

Illinois Capitol News

SPRINGFIELD, Ill. (NEXSTAR) — In a preview of Governor J.B. Pritzker’s third budget address on Wednesday, Comptroller Susana Mendoza (D-Illinois) warned state lawmakers against a temptation to redirect any federal Coronavirus relief funds towards pet projects.

“I do not want the legislators, or anyone else for that matter, to get excited about any new federal stimulus dollars coming in,” Mendoza said Tuesday afternoon. “Because honestly, it’s not going to be like Christmas morning. There is not going to be a new Lexus in the state’s driveway with the big red bow.”

Mendoza said any federal relief funding, which President Joe Biden’s administration has floated in his American Rescue Plan, would effectively help the state prevent “our family pickup truck from being repossessed,” she said. “That’s how people should see this. Those dollars are spoken for.”

“We have to learn to live within our means,” she said. “We cannot count on future revenues from federal stimulus towards this budget.”

Pritzker previewed his budget plan last week, rolling out $700 million in unspecified cuts to state agencies and another $900 million in tax credits, or “corporate tax loopholes,” which he plans to phase out.

Republicans hammered Pritzker’s plan to target tax incentives for businesses as “tax increases” that amount to “a disincentive for businesses to remain in Illinois.”

“When they talk about corporate loopholes, those are job creation mechanisms that were passed by the legislature over the years,” House Republican Leader Jim Durkin (R-Western Springs) said on Monday. “We’re looking at right now an unemployment rate of 7.5%. in the state, 10% in the city, 9.3% in the suburbs.”

State Senator Steve McClure (R-Springfield) said Pritzker and the state legislature are in “an impossible position,” but called for Pritzker to slash state agency spending by 7-8% across the board, while protecting education funding.

“There has to be serious cuts in a way in which we can actually cause people to want to come back to this state, particularly after our businesses have been devastated because of COVID,” he said. “I need to see a plan from the governor that is a big ‘Illinois is open for business’ sign for all of these businesses that are struggling right now.”

While some lawmakers are advocating cuts, others are calling for spending increases. Representative Will Davis (D-Hazel Crest) indicated the legislature may not go along with Pritzker’s plan to freeze the education funding formula for a second straight year.

“It’s unfortunate that the governor’s budget doesn’t prioritize education properly in the way it should to make sure that we are putting new money into the education formula,” Davis said last week.

“We need to put new dollars into the formula, not just flat funding,” he said. “If we’re able to figure out how to put new dollars into the school funding formula, then I dare the governor to veto that money out and bring us back to flat funding.”

Mendoza sought to lower expectations across the board after an economic downturn limited the state’s financial options.

“It’s not going to be a fun budget because there’s nothing really super positive going on right now when it comes to the finances in the middle of a global pandemic. We still don’t have anything federal stimulus dollars, so that’s not something that can be included in the budget.”

Pritzker’s budget preview did indicate federal funding could shoulder part of the state’s education funding obligations.

House and Senate Republicans also criticized Pritzker for not releasing more specific details outlining his proposed cuts to state agencies. The governor’s administration reportedly blocked an open records request seeking details about his pending cuts.

“I think that we should be as transparent as humanly possible,” Mendoza said. “The best way to restore trust in government is through transparency.”

“If you’re going to criticize cuts, which of course is fair game, the Republicans should also offer up their own cuts,” she said. “That is part of the legislative process.”

“Governor Pritzker asked me to provide him with my cuts,” Durkin said Monday. “Now, first and foremost, it’s the governor’s constitutional duty to propose and balance our state’s budget, not the House Minority leaders. But apparently this is a novel concept that hasn’t quite sunk in with the governor.”

“It is astounding, absolutely astounding, that the governor continues to push off the state’s fiscal problems onto the House Republicans and Republican voters of Illinois,” Durkin said. “Stop the blame, Governor, because millions of Illinoisans are depending upon you to help them get back on their feet after one of the worst years of their lifetime.”

The Comptroller’s records list the state’s backlog of unpaid bills at higher than $4.7 billion dollars. However, she says that figure is actually closer to $9 billion after accounting for recent emergency borrowing from the federal government.

“We just recently borrowed $2 billion from the Federal Reserve to be able to stretch those [dollars] into $3.4 billion by paying Medicaid bills down,” she said, adding that she stipulated that deal on an agreement with the Governor.

“My commitment to signing off on that $2 billion deal with the governor was that we have a solid understanding that any new revenues coming in from federal stimulus dollars will go towards paying down the debts that we’ve incurred.”

Pritzker will deliver his third budget address on Wednesday, combining it with his annual State of the State Address. Instead of delivering the speech before a joint session of the legislature, he plans to deliver his remarks virtually.

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