Progress Illinois

It's still too early to tell what the budget deficit will look like when state legislators reconvene this winter to hash out the FY 2011 budget. But there is plenty of evidence to suggest it will be very deep.

The "stop gap" budget approved by the General Assembly this week attempts to plug the deficit by cutting programs, borrowing $3.5 billion, and remaining delinquent on $3.2 billion in back-payments to vendors and providers. But many expect this haphazard plan to come up short, necessitating the need for new revenue (i.e., a tax increase) in the January veto session.

As we've explained before, recessions tend to hit the states later than the nation as a whole. And across the country, tax revenues are plummeting just as demand for government-backed, safety-net services grows. A new report from the Rockefeller Institute of Government examines some gory details from the first three months of 2009:

The 45 states that have reported taxes for April and May have seen revenue declines of about 20%, compared with the same period a year ago, according to the report to be released Friday from the Nelson A. Rockefeller Institute of Government at the State University of New York.

"Such extraordinary weakness in revenues, along with continued if more moderate growth in expenditures, make widespread budget shortfalls highly likely this year," the report said.

Stateline writes that these are the worst figures in the 46 years that quarterly data has been available. And every source of revenue is hobbled: States' collections of corporate income taxes have dropped 18.8 percent in the first quarter compared with a year ago; personal income taxes fell 17.5 percent; and sales taxes declined by 8.3 percent.

It seemse obvious that this is no time to be putting off the tough decisions until the politic climate is right.  Unfortunately, that's just what our state legislature did.