Budget Woes Were Foreseen

Illinois is facing a budget crisis. The state’s revenue collections are low, and dropping. Yet we’ve continued to spend more than we’ve taken in from taxes – in 2006, in 2007, in 2008, in 2009, in 2010, and yes, in 2011. Some of the revenue shortfall can be blamed on falling collections due to a...

Illinois is facing a budget crisis. The state’s revenue collections are low, and dropping. Yet we’ve continued to spend more than we’ve taken in from taxes – in 2006, in 2007, in 2008, in 2009, in 2010, and yes, in 2011.

Some of the revenue shortfall can be blamed on falling collections due to a down economy. But these economic troubles were foreseen – did the governor and the legislative leadership pay heed? Let’s review some of the warnings they received, and when the “trouble ahead” signs started popping up:

•  February 13th 2008, Comptroller Dan Hayes warned in his Fiscal State of the State that “Illinois’ era of relative prosperity appears to be ending. While other states have taken advantage of the ‘good times’ to address the problem, Illinois has not. Recent economic performance suggests that the time to act and address these problems may have already passed.” In the same document he also cautioned that “the fiscal outlook for Illinois is not optimistic. The state has failed to build up reserves or address the underlying structural problems of the state’s budget.”

• March 2008, the Commission on Government Forecasting and Accountability concluded in areport that “given the current uncertain status of the economy, the revenue picture for FY 2009 is far from clear” and that “with this heightened state of uncertainty, it would not be surprising to see revenues struggle over the remainder of FY 2008.”

• May 12th, 2008, Civic Federation in a report on the budget advised that “the State of Illinois must focus on… cost reduction strategies if it is to craft a balanced budget and avoid future financial meltdown.” As part of their explanation of why they opposed the governor’s budget for FY2009, the first reason was that “the new program initiatives are unaffordable and imprudent during an economic turndown and will only further the state’s inability to meet its existing obligations.”

• September 18th, 2008, Illinois Treasurer Alexi Giannoulias warned that “revenue the state makes from interest on its investments would be cut in half over the next two years.”

• After the “financial crisis” of fall 2008, the Commission on Government Forecasting and Accountability further warned that “based on recent history as well as most current views of the length and severity of this slowdown, there is little reason to expect an abrupt end to revenue difficulties.”

Instead of seeking to lower expenditures to match falling revenues, Illinois has continued to spendbeyond its means. It’s denial, pure and simple. Don’t say we didn’t warn you.