Controlling the future growth of government spending is key to solving Illinoiss budget crisis. Done properly, tax and expenditure limits are a good way to ensure that government outlays do not grow faster than the publics ability to pay.
Illinois already owes billions in overdue payments to state vendors and now is behind in payments to a state university.
The Problem Illinois’s inability to pay vendors on time is destabilizing many businesses with state contracts while at the same time hurting Illinois’s most vulnerable. According to the Illinois Comptroller’s Office, the state had $4.7 billion in payables at the end of the 2010 fiscal year in June and an additional $1.7 billion in additional...
by Kate Piercy The Illinois Policy Institute has highlighted various instances where Illinois government employees are paid above national averages and much of the time land in the highest earners rankings. Our legislators, allexecutive officers, including the governor, and judges, make some of the highest salaries compared to counterparts nationwide. The Wall Street Journal today discussed President Obama’s recent...
by Ashley Muchow Mercatus Center’s Veronique de Rugy has made it on our list of bloggable material for quite some. She has, yet again, delivered another applicable piece of statistical analysis. In the graph below, de Rugy uses the earliest records available to plot the historical path of tax revenue as a percentage of GDP and the trend of the top...
by Wesley Fox Over the last two years, many states have faced large budget shortfalls due to declines in revenue and continued spending at unaffordable rates. Some have dramatically cutback spending to balance their budgets, while others have raised taxes. The CATO Institute’s Fiscal Policy Report Card provides an excellent assessment of the responses of U.S. governors...
by Ashley Muchow Found this cartoon from Jack Higgins of the Chicago Sun-Times from a couple weeks back. Unfortunately, its “ticking time bomb” metaphor is all too accurate a description of Illinois’s state pension fund. See the Institute’s proposed solution to address the state’s $83 billion unfunded pension liability.
by Ashley Muchow According to the Civic Federation, the City of Chicago is $2.4 billion behind on its pension contributions. In fiscal year 2009, Chicago pumped $423.9 million into its Municipal, Laborers, Police, and Fire pension funds. Using GASB standards, the Civic Foundation found that the city was $566.5 million short of what should have been contributed. So why...
Earlier today, President Obama announced a plan to freeze civilian federal employee pay for two years. The pay freeze “applies to all Executive Branch workers — including civilian employees of the Defense Department, but does not apply to military personnel, government contractors, postal workers, members of Congress, Congressional staffers, or federal court judges and workers.” The pay freezewill also “not...
by Wesley Fox Illinois along with California have massive budget shortfalls in 2011. In order to help states deal with budget crises, University of Pennsylvania Law Professor David Skeel argues states should be able to go into bankruptcy. Local governments have been able to declare bankruptcy in order to settle debts since the 1930s, but states have...
by Ashley Muchow History has shown us that increasing the top margin personal income tax rate has done little to impact tax revenues. Indeed, over the past 60 years, tax revenues as a percentage of GDP have averaged just under 19.5 percent even when the top marginal tax rate has fluctuated from its 92% peak in...
by Wesley Fox According to the Chicago Tribune, the Illinois Department of Corrections is $95 million behind on its bills. Many prison vendors have not been paid in months. Some have stopped extending credit to correction centers, and two havestopped doing business with the Department of Corrections altogether. If Illinois does not start paying its bills on time, more...
by Wesley Fox While several of Illinois’s neighbors are moving towards cutting taxes to help promote economic growth and job creation, Governor Quinn is pushing hard for an increase in the individual income tax rate to help “solve” Illinois’s budget problems. If he is successful, Illinois may be the only state in the region that will...
by Ashley Muchow The holidays are just around the corner–the smell of turkey and apple pie are in the air. As you begin documenting the expansive list of gifts to get grandma, aunt Carol, or your beloved grandson, consider this: Illinois legislators are considering a bill that would make shopping online for these loved ones...