Illinois’ unpaid bills jump to $14.3B
New numbers from the Illinois comptroller’s office show that Illinois’ unpaid bill backlog has climbed to more than $14 billion. In August 2016, Moody’s Investors Service predicted Illinois’ bill backlog would reach $14 billion by summer 2017.
Illinois’ unpaid bill backlog has increased to $14.3 billion from a previous balance of $13.3 billion. The Illinois comptroller’s office announced the staggering $1 billion jump in unpaid bills in a May 17 press release.
In August 2016, analysts from Moody’s Investors Service, a prominent credit rating agency, predicted Illinois’ stack of unpaid bills would reach $14 billion by summer 2017.
In March, Moody’s warned that Illinois’ ongoing budget gridlock and failure to pay its bills could lead to further credit downgrades, which could result in Illinois becoming the first “junk”-rated state in the nation.
Illinois’ mounting pile of unpaid bills reveals that the state continues to spend money faster than it takes it in.
Many Springfield politicians think a tax hike would solve this problem. But more tax revenue would just paper over the state’s spending problem.
“Grand bargain” 2.0 offers no spending reforms
Recent tax hike proposals coming out of Springfield prove lawmakers learned nothing from the 2011 income tax hikes, which were unaccompanied by real spending reform.
State Sen. Bill Brady, R-Bloomington, has introduced a new proposal to supplement the “grand bargain” budget deal. Brady’s plan calls for retaining the grand bargain tax hikes, which include an income tax increase and an expansion of the sales tax that would be expected to bring in $5.4 billion and $300 million in tax revenue, respectively, as well as casino expansion fees, which would bring in an estimated $1 billion.
Brady’s plan may also rely on revenue gathered from the sale of the Thompson Center, estimated at $200 million.
But more money will not solve Illinois’ structural problems. New revenue will only delay the needed reforms to deal with Illinois’ massive cost drivers.
Illinois politicians don’t use tax hikes to pay down unpaid bills
Springfield politicians infamously sold the 2011 income tax hikes as a way to pay down Illinois’ debts. But despite taking in $32 billion in new tax revenues, lawmakers did not solve the state’s pension crisis or clear the bill backlog; instead, the new revenue acted as a stalling mechanism in order for politicians to put off needed reforms.
Illinoisans are tired of tax hikes. Polling conducted in February and March by Fabrizio, Lee & Associates and commissioned by the Illinois Policy Institute shows that a majority of Illinois voters want the state to balance the budget without tax hikes.
Illinois policymakers should rally around plans that actually reform the state’s finances without having to go back to taxpayers. Tax hikes would not only be unfair to residents, but would also be ineffective at solving Illinois’ budgetary issues.
At some point Illinois’ unpaid bills will have to be refinanced to save money, but that can’t happen until the state gets its spending problem under control – otherwise lawmakers will continue recklessly wasting tax dollars.
The Illinois Policy Institute has provided a reform road map that balances the budget without tax hikes. The plan provides tax relief to struggling homeowners through a comprehensive property tax reform package and makes changes to curb bloated administrative expenses in higher education and the state’s excessive number of local government entities.
Most importantly, it addresses Illinois’ pension crisis by implementing a 401(k)-style retirement plan for government workers going forward, a solution that’s been under lawmakers’ noses for nearly 20 years.
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