Senior Budget and Tax Policy Analyst
Illinois has a spending problem. Spending per capita has grown nearly
three times faster than it would have under a responsible spending
limit – one tied to the growth of inflation and population. That means
Illinois could be spending $1,200 less per capita today if it would
have enacted a responsible spending limit in 1990.
The underlying cause of this rapid growth in
state spending is a culture of disrespect for taxpayers and an
unwillingness to enact real reform. Time and time again, lawmakers
increase taxes and borrow against the future in order to live beyond
their means today. They have avoided reform at the expense of our
children and grandchildren.
In an attempt to curb Illinois’ out-of-control spending, lawmakers
passed a weak spending cap in 2011. The limit prevents General Fund
expenditures from growing more than 2 percent each year. Not only is
the 2 percent limit arbitrary, but it also far exceeds the available
revenues each year.
The 2015 cap is $5 billion higher than the resources Illinois is expected to have available during that same year.
The solution to this problem is simple – enact a responsible spending limit tied to the growth of population and inflation.
The most effective spending limits include the following characteristics:
- Limit growth in spending to the sum of inflation and population growth
- Codified in the state’s constitution
- Based on spending not revenues
- Require a supermajority or public vote for an override
- Contain a provision that automatically refunds surpluses in excess of the limit
Current spending is far too high. Before implementing an effective
spending restraint, lawmakers must first realign spending with the
state’s fiscal realities and then restrain growth in spending going
A strict spending limit works because it forces
politicians to critically evaluate how tax dollars are spent. Having
this mechanism means lawmakers would have to think twice about how they
spend taxpayer dollars instead of resorting to more tax increases.