A View From the Cheap Seats

May 9, 2010

The Bills Are Coming Due

Filed under: Illinois,Politics — trzupek @ 7:05 pm

EXAMINER PUBLICATIONS – MAY 5, 2010

By Rich Trzupek

Last year, the Civic Federation, a non-partisan organization that watches government spending, supported the idea of a state tax hike in order to close the state of Illinois’ massive budget gap. Actually, “gap” isn’t a good enough word. “Chasm” describes the difference between revenue and spending more accurately. But, I digress.

Anyway, having argued for a tax hike last year, the Civic Federation pulled back from that position this year for one very good, and very simple, reason: they don’t trust the Democrat-controlled General Assembly to rein in spending. The more that you feed the beast that is big government, the hungrier the beast gets for more tax dollars. Kudos to the Civic Federation for pointing that out.

The organization came to this conclusion in their report analyzing Governor Pat Quinn’s proposed 2011 budget. The first three paragraphs of the Executive Summary are worth repeating:

“The Civic Federation opposes Governor Pat Quinn’s $52 billion FY2011 recommended operating budget for the State of Illinois because it is unbalanced and does too little to address the State’s fiscal crisis. The Governor’s recommended budget borrows billions to pay for operations while continuing to ignore the massive backlog of unpaid bills, which will make the State’s financial condition worse.

Although the Civic Federation is encouraged that Governor Quinn has signed significant pension reform legislation and recommends some reductions in spending, we cannot support his FY2011 State of Illinois operating budget because it does not effectively stabilize state finances or substantially reduce the State’s $12.9 billion deficit going into FY2011.

The Governor’s FY2011 budget recommendation would create a $10.6 billion deficit, consisting of an operating deficit of $4.7 billion and a carry forward deficit of $5.9 billion from the prior year. The recommended budget proposes borrowing $4.7 billion to close the operating deficit. Even after borrowing to pay for the operating deficit, the State will end FY2011 with the same carry forward deficit of $5.9 billion.”

And it goes on from there. Quinn and the Dems are trying to apply a band-aid, when major surgery is called for. One cannot help but wonder if Mike Madigan and his allies in the capitol secretly hope that Bill Brady beats Quinn in November. That would have the effect of dumping this ugly mess into the lap of Republican governor with the unspoken directive: you figure it out.

Whatever the next governor does, the solution is sure to be deeply unpopular. We’ve already seen how state employees react to the suggestion of budget cuts and it’ll only get worse if a governor proposes the deep, meaningful slashes necessary to restore sanity.

The alternative – tax hikes – would make state employees and those who depend on entitlement programs very happy indeed, but would really annoy the rest of us who work for a living. It’s a damned if you do, damned if you don’t kind of decision, so why not let the other guy deal with it? It’s not like Mike Madigan and his Chicago cronies have to worry about their jobs or anything.

In a way, you’re already feeling the effects of tax hikes, or you likely soon will. The state has already reduced the share of the state income tax that it returns to municipalities and Quinn wants to cut that back even further. Under the governor’s proposal the amount of state income tax returned to municipalities would drop by nearly a third, from ten per cent of what residents pay the state, to seven per cent.

Municipalities are struggling in this economy as much as anybody and, by and large, these small units of government are already running as lean as they can. When the state reduces the amount of money – your money – that it returns to communities, towns across the state will have little choice but to raise taxes or cut services that are actually essential, like police, fire and water. Most of the time, I would be willing to bet, municipalities are going to look at that Hobson’s choice and – albeit reluctantly – conclude that it’s better to ask residents for more money than it is to imperil those functions of local government that they need.

It’s a shame that Illinois is in the position it’s in, but it’s not like we couldn’t have seen this coming. If a humble scribe like yours truly could have seen this coming eight years ago, our representatives in Springfield should damned sure have known. But, when it comes to those senators and representatives with a “D” behind their names, it’s clear that either: a) they didn’t know, or b) they didn’t care.

In the first case, the best one can say is that they’ve been negligent, if not downright stupid. In the latter case, they’ve failed to do their job of representing the people in order to get themselves elected. Either way, it’s pretty clear that they should no longer be entrusted with the future of the people of Illinois and, come November, here’s hoping that the people take action and throw the bums out.

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