Increases funded by federal COVID aid have been made permanent, causing a fiscal problem.

Illinois needs to pull back on spending.

Since 2020, the state has gotten $15.6 billion in federal aid related to the COVID-19 pandemic. While that funding was temporary, Illinois has permanently increased what it spends.

That has caused a fiscal problem for the state, with projected budget deficits totaling nearly $21 billion during the next five years. Expenditures are forecasted to grow nearly 20% in that time, but revenues only 11% in that time.

These estimates could be off by billions because of changes such as reductions to federal benefits programs. Still, lawmakers should return spending to pre-pandemic norms. In response to the pandemic, Illinois expanded its budget by nearly $11 billion from fiscal years 2020 to 2023, a 27% increase.

Temporary federal aid supported much of that growth. Even though the emergency has passed, what was federal money now is covered by Illinois taxpayers.

For example:

1. “Environment and culture” spending, which encompasses the Illinois Art Council and Department of Natural Resources, grew 62% in just three years, rising from $61 million to $99 million. Had spending grown in line with the state’s nominal GDP growth, it would have risen only about 10% by 2023.

2. “Human service” spending, for departments such as the Department of Veterans Affairs and Human Rights, jumped from $6.6 billion in 2020 to $10.8 billion 2023, a 64% increase. Employee headcounts are up nearly 5,500 since 2020. If increases had tracked with nominal GDP growth, spending would be about $3.5 billion lower.

One way to rein in these increases is to enact a spending cap tied to that nominal GDP growth. Gov. J.B. Pritzker’s fiscal 2027 budget proposal of $56 billion, adds $880 million higher than the 2026 budget levels. With a spending cap in place, the state would need to cut $2 billion from the current proposal.

To help better manage its spending, Illinois should make more use of its Budgeting for Results Commission. Established in 2010, it can evaluate state programs, identify inefficiencies and ensure taxpayer money is tied to measurable outcomes.

The commission has been underutilized. Strengthening it would help lawmakers target waste and prioritize core services.

Other reforms would help establish fiscal stability. Read more in our report Illinois Forward 2027.

CHICAGO (WLS) — The I-Team reported in February that there were 164 operating data centers in Illinois, with dozens more in the works.

The city of Joliet recently voted to approve plans for a large data center.

That vote came after hours of public meetings, packed with people eager to weigh in. Joliet city leaders said it would bring tax revenue and financial benefits for the community.

Some residents expressed concerns about the potential environmental impacts.

But, what exactly is a data centers and why are some communities eager to attract them?; Why are so many people opposed to them?

“A data center is going to be a building that provides the space, the power and the infrastructure for everything that we do online today,” said Brad Tietz, the director of state policy for the Data Center Coalition. “So, when you look at where demand is going, for data, so everything we’re doing on the internet, the average household has 21 connected devices to it. We’re going to use twice the amount of data in the next five years than we’ve used in the last ten years.”

When it comes to the types of jobs created by data centers, he says it depends on the size of the facility.

“There’s going to be technicians, service engineers, etcetera. The real value, especially for Illinois residents, is going to be on the construction side,” Tietz said.

In some communities considering data centers, residents are concerned about their water usage.

“The data center industry has been a large water user, historically, but by no means the largest compared to other industries. And if you look at how efficient the industry is getting, and I’ll remind you too, not every data center uses water. Some are actually using, especially in a colder climate like Illinois, the outdoor air temperature to help cool their facilities,” Tietz said.

Jen Walling is the Chief Executive Officer of the Illinois Environmental Council.

She wrote in Crain’s that “Big Tech” is coming to Illinois and that the state isn’t ready.

“We don’t have the guardrails in place that are going to be necessary to protect our environment, to keep our rates low, to protect our communities and most importantly, protect our water,” Walling said.

She says the Alliance for the Great Lakes has put out a report where they’ve looked at water usage, and some data centers aren’t using much water.

“Some data centers are using up to five million gallons of water a day. These are huge water users, and they can be taking from different sources including Lake Michigan,” she explained.

“We’re also very concerned about air pollution and the energy usage, these are huge energy users,” Walling said.

She also explained the concerns for people living nearby.

“They need to be on with energy all the time. So, all of these facilities have backup diesel generators. And the residents in the [Aurora] community said that they could smell the methane gas that was being burned, the diesel gas that was being burned. And that’s particulate matter, it’s odor, so these communities face real consequences when something happens,” she said.