Cuts and Necessary Cuts

by Kate Piercy In the chart below, Mercatus Center Research Fellow Matt Mitchell compares the actual decline in states’ spending from 2009 to 2010 (in blue) and the sustained cuts in state and local spending necessary to close the gap between spending and revenues over the next 50 years, known as the 50-year fiscal gap (in...

by Kate Piercy

In the chart below, Mercatus Center Research Fellow Matt Mitchell compares the actual decline in states’ spending from 2009 to 2010 (in blue) and the sustained cuts in state and local spending necessary to close the gap between spending and revenues over the next 50 years, known as the 50-year fiscal gap (in red), illustrating the drastic contrast between states’ needed budget cuts and the cuts they have so far been willing to make.

The National Governors Association and the National Association of State Budget Officers report “the states’ general fund expenditures are currently estimated to be $612.9 billion in 2010, a 6.8% decrease from the 2009 level of $657.9 billion.”

In order to balance the budget through spending cuts, however, “a cut of 12.3% must be taken immediately and be maintained each and every year going forward to balance state budgets in the long-term,” according to the Government Accountability Office (GAO).

This equals nearly twice the level of the 2009-2010 spending cuts, and “without significant adjustment in states’ level of spending, GAO finds that state and local governments’ fiscal positions will steadily decline through 2060.”

What can Illinois do about its spending? Check out some solutions here.