 The startling discrepancy between spending and revenue is nothing new for the
Land of Lincoln, which hasn’t had a balanced budget since 2001. But the growing
backlog of bills highlights the serious need to rein in the state’s
out-of-control spending, which is how the state got into its current fiscal
mess.
The stopgap ensured funding for critical human services, road construction,
prison operations, veterans’ care and higher education in the interim, but did
not make any structural reforms to address the state’s long-term health. Munger
said in her July 14 press conference, “While the stopgap is a positive step
forward, it is a very short-term step. It does not address our larger financial
issues and our limited available cash, nor does it provide a predictable funding
stream.”
Without serious structural reforms, Illinois’ problems are almost certain to
worsen, as the state owes nearly $170 billion in unfunded promises made with
respect to state-worker retirements. Pension costs alone now consume 25 percent
of the entire state general fund budget.
Given the mountain of unfunded liabilities, Illinois House of Representatives
Speaker Mike Madigan has proposed increasing the state’s personal income-tax
rate to 5 percent, the rate in place during the 2011-2014 tax hike. But that
massive tax hike signed into law by former Gov. Pat Quinn, and the $31 billion
in extra tax revenue it brought in, did nothing but encourage Springfield’s
reckless spending habits. Politicians doubled pension payments during those four
years, while funding for K-12 and higher education actually fell by nearly 10
percent.
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 Illinois’ problem over the years, and now, has been excessive
spending, not a lack of tax revenue. The state’s tax revenues have
grown far faster than inflation for decades. In fact, from 2003 to
2016, Illinois collected an average of $5.4 billion a year more in
tax revenues per capita than it would have brought in had tax
collections merely grown at the rate of inflation.
With the fifth-highest state and local tax burden in the nation,
it is unfair for state politicians to ask Illinois taxpayers to chip
in still more while politicians refuse to rein in spending. And
overtaxed Illinoisans in an underperforming state economy continue
to show their displeasure by crossing state lines, taking their
taxable income with them and shrinking the tax base.
To change course, the state needs to reform its underfunded pension
systems, fix its uncompetitive workers’ compensation system, and
instate a property-tax freeze for Illinoisans, who suffer from the
highest property taxes in the region.
The $10 billion in unpaid bills the state expects by year’s end is a
predictable outcome of years of irresponsible spending by
politicians who’ve gotten used to asking taxpayers to make up the
difference. Unless Springfield changes its ways the bills will
continue to pile up.
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