Laying the groundwork for a true economic turnaround in Illinois

Illinois lawmakers passed a 67% income tax hike in 2011. They said that the tax hike would be temporary, making a promise to taxpayers that it would sunset on Jan. 1st, 2015. But there have been absolutely no reform efforts to date that would reduce spending enough for lawmakers to keep their promise. And with...

Illinois lawmakers passed a 67% income tax hike in 2011. They said that the tax hike would be temporary, making a promise to taxpayers that it would sunset on Jan. 1st, 2015. But there have been absolutely no reform efforts to date that would reduce spending enough for lawmakers to keep their promise. And with the sunset date quickly approaching, lawmakers are considering making the tax hike permanent – or worse, adding on another multibillion-dollar tax increase.

House Deputy Majority Leader Lou Lang, D-Skokie, introduced legislation that would make the tax hike permanent. State Rep. Elaine Nekritz, D-Northbrook, acknowledged her support for letting the tax hike stick around. And State Rep. Naomi Jakobsson, D-Urbana, proposed another income tax hike in Illinois – a progressive income tax.

Higher taxes won’t fix Illinois’ dire economic situation. That’s because Illinois doesn’t have a revenue problem – it has a spending problem.

Lawmakers must modernize the way they budget and spend. That means Illinois’ political leadership needs to discern what government can and should be doing, and return to the basics of good public policy.

The Illinois Policy Institute’s Budget Solutions 2014 provides Gov. Pat Quinn and the General Assembly with the reforms needed to make Illinois prosperous again. Illinois’ problems are complex, but we believe the reforms outlined in Budget Solutions 2014 are common sense.

First, lawmakers must balance the budget. Illinois hasn’t had a balanced budget since 2001. It’s time to stop pushing deficits forward and start paying for spending the same year it is incurred.

Second, lawmakers must implement a real spending limit. Without a strong spending limit, lawmakers will find ways to raise money and spend it. A responsible spending limit forces government to spend within its means and limits lawmakers’ ability to make promises they can’t keep.

And third, lawmakers must get state spending down to an affordable level. The reforms offered inBudget Solutions 2014 reduce spending and improve outcomes. These reforms include dramatically changing how Illinois delivers Medicaid, fixing the state’s broken system of funding education, eliminating ineffective revenue sharing programs and establishing a competitive grant funding process in the state budget.

These types of spending reforms accompany a larger goal in Budget Solutions 2014 – to repeal the income tax hike before it is due to sunset.

Our solution is bold and requires sacrifice, but it’s the only solution that offers a way to turn around Illinois.

Budget Solutions 2014 achieves the following:

1.    Balances Illinois’ budget for the first time since 2001
2.    Rebalances state spending to $27.4 billion
3.    Returns $7 billion to taxpayers by repealing the 2011 tax hike early
4.    Pays down the state’s $9.3 billion in unpaid bills by 2016
5.    Enacts structural spending reform to sufficiently fund core services

Lawmakers in Illinois can accomplish these necessary changes, and they must. The reforms offered in Budget Solutions 2014 lay the groundwork for a true economic turnaround.

Budget Solutions 2014 calls on lawmakers to:

1. Implement the Illinois Policy Institute’s pension reform plan to save an estimated $2.011 billion
2. Strengthen Illinois’ balanced budget requirement
3. Enact a responsible spending limit
4. Establish a competitive grant funding system to save an estimated $180 million
5. Reform state retiree health insurance to save an estimated $685 million
6. Empower patients with health care choice to save an estimated $1.45 billion
7. Eliminate ineffective revenue sharing programs to save an estimated $1.7 billion
8. Rededicate General State Aid money for education to save an estimated $750 million
9. Improve quality and efficiency in human services to save an estimated $512 million
10. Right-size state payroll to save an estimated $318 million