A friend asked if the governor and state legislators are ever going to agree on a state budget.
“They have to realize this financial mess isn’t going to get any better,” he said. “Even if they do something now, it may be too late, right?”
I told my friend that I didn’t think the Republican governor and state Legislature, dominated by Democrats, could reach an agreement.
There was a time, a couple of years back, when knowledgeable people seemed to think the government could solve the financial issues facing Illinois.
They suggested the pension debt, which is about $110 billion, could be addressed by funding the state pensions at an 80 percent rate instead of 90 percent and spreading that debt over many more years than had previously been discussed.
But the fact is that the state’s annual budget deficit, the amount of money we’re spending each year over the amount the treasury is taking in, has grown to more than $10 billion now. And we have taken out larger loans to keep the state running, meaning the interest payments have grown.
On top of all of that, the state school system is primarily funded through property taxes and they have increased so much (because the state has failed to fund the schools adequately for decades) that people are demanding a freeze or even a property tax cut.
Gov. Bruce Rauner has said he wants a property tax freeze. So have many Republican and Democratic state legislators.
But if property taxes are frozen or cut, the state would, in theory, have to come up with more money from somewhere else to fund public education. Since the state is broke, that would likely mean an income tax hike.
That would make it more difficult to solve the state’s budget and pension problems with an income tax increase since there would be less money for that purpose if an income tax hike is passed. Of course, the state could just shortchange public education, which it has done in the past.
This seems like a good time to note that there are several lawsuits pending against the state by Chicago and downstate school systems claiming Illinois has failed to honor its constitutional obligation when it comes to school funding and has discriminated against minority children.
If the courts rule in favor of those school districts, the state would be forced to come up with billions of dollars more for public education.
“People keep leaving the state,” my friend said. “Businesses are closing. Doesn’t that mean anything to these politicians?”
The fact is the state has already cut billions of dollars from core services in Illinois and slashed the budgets of state universities. Some people might see that as a good thing, but what it does is make it less likely that people will want to move here or that young families will stay.
To get anything close to a balanced budget and address the long term deficit, the state is going to need higher income and sales taxes, more cuts to the budget and an amendment to the Illinois constitution that allows the government to make changes in collective bargaining contracts without the approval of government unions.
That is not likely to happen.
Rauner wants term limits, changes on workers’ compensation, and reforms in the way legislative districts are drawn, but none of those things would actually impact the state budget or pension deficit for years, if ever. There’s an election for governor next year, which makes it even less likely that politicians will cooperate.
“Are these politicians just going to watch the state collapse? I can’t believe they would do that,” my friend said. “How would that benefit anyone?”
There are still people who live in this terrible state who believe elected officials care about the future of Illinois and its residents. That is amazing.
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