The fiscal future of Illinois has already been mortgaged into the next several generations by this administration. Relentless anti-employer legislation continues to spew forth and the airwaves are flooded with a demagoguery seemingly designed more to foment class warfare than advocate policy positions.
And please. The state does not “create jobs.” Employers do. Especially when they aren’t taxed into Indiana, or otherwise incented to seek a future in Iowa, Wisconsin, Missouri, Michigan or Kentucky.
Welcome to Springfield.
Today the General Assembly is considering budget proposals for billions in new spending, a gross receipts tax on employers which promises the highest tax increase in Illinois history, and a who-knows-how-much-it-costs—we think $10 billion once implemented— health insurance plan. But please consider the present reality:
- Illinois still refuses to confront a $3 billion structural deficit in Medicaid, a situation our hospitals, doctors, pharmacies, nursing homes and even taxi cab companies are all too happy to discuss each spring as they wonder when the deadbeat will finally pay its bill;
- State pensions have been casually shorted by another $3.5 billion in favor of plugging leaky budgets. Illinois is “first-place” in the nation—our state’s unfunded liability is now about $40 billion;
- As general obligation debt has nearly tripled from $7 to $20.8 billion, with $10 billion “back-loaded” with interest-only payments, our future debt service payments will restrict funds available for basic needs like education and other services.
Governor George Ryan cut general spending by $1 billion in his final year, as Illinois, along with 48 other states, struggled to stay ahead of falling sales and income tax receipts (general revenues), which occurred for the first time since 1955. Yet this administration has increased general spending by $3.5 billion without the money to pay for it. All manner of gimmicks, half-truths, fund sweeps, “chargebacks” to already adopted budgets, pension games, road fund diversions, bill payment delays, asset sales and other financial sleight of hand imperil our future.
This year our new revenue growth is estimated at $600 million. If the governor does the usual and sweeps another $290 million out of special-purpose funds again—despite the protest from those who paid fees into them—where are we? Still in trouble.
That nearly $900 million is already gone—Medicaid growth will cost $500 million and pensions another $450 million. But what about the additional $3.1 billion promised in the governor’s Fiscal Year 2008 budget, to elementary and secondary education ($1.5 billion increase), higher education ($41 million), healthcare and family services ($1 billion), human services ($182 million), group insurance ($70 million), corrections ($79 million), etc.?
What if the General Assembly refuses the governor’s demand to lease the lottery for $10 billion (his estimate) or borrow another $16 billion to stick in the pension funds? What happens if the General Assembly refuses to pass the gross receipts tax scheme, projected to lift $6 billion from employers’ and consumers’ wallets?
I forgot to mention the long-awaited capital budget for school construction, new roads, maintenance and infrastructure. There is nothing more expensive long-term than deferred maintenance. Illinois hasn’t had a capital budget in years. But how do we pay for it?
This could be a very long summer in Springfield. IBI
