Why a fair, balanced budget takes political courage

Austin Berg

Director of Content Strategy

Austin Berg
February 9, 2017

Why a fair, balanced budget takes political courage

Lawmakers on both sides of the aisle grow more and more powerful as the size of state and local government increases.

Illinoisans are fleeing the state in record numbers. Homeowners pay the highest property taxes in the nation. And high-need residents are suffering under budget priorities that don’t put them at the front of the line.

Why?

A simple truth explains the root of this pain: Politicians do not bear the cost of government. In fact, lawmakers on both sides of the aisle grow more and more powerful as the size of state and local government increases.

To varying degrees, the power bases of both parties depend on the status quo. Both sides would come under fire for taking on necessary spending reforms.

First, let’s look at the Illinois Democrats. Under the direction of Illinois House of Representatives Speaker Mike Madigan, the Democratic political operation has functioned in a similar fashion for decades. The party’s power base is composed of state workers, public-sector unions, trial lawyers and some social service providers. The foot soldiers of Chicago’s political machine make up the remainder.

Most Illinoisans are familiar with that hierarchy and its consequences.

The Republican power base, however, is less understood. Stereotypical suburban households and titans of industry come to mind. But that doesn’t paint the whole picture.

Illinois is home to the most units of government in the nation at nearly 7,000. And while some may talk a big game on spending reform, many Republican lawmakers rely on the support of those duplicative local governments in their districts.

Here’s why that poses a problem: Local reform must be a major component of any state budget plan. The pain felt by homeowners comes at the local level, and it’s forcing families to move beyond Illinois’ borders.

Changing a culture of local government overspending will be difficult. It requires aggressive consolidation. It requires freezing property taxes and limiting the ability of local governments to raise revenues. It requires reforming the state subsidies that block accountability and fuel excessive spending. And it requires empowering local leaders to balance their budgets without the burden of costly Springfield mandates.

Real property tax reform requires all of those things.

But politicians on both sides of the aisle are reluctant to throw their weight behind the whole package, because those reforms strike at the heart of bloated local government.

Take the Local Government Distributive Fund, or LGDF. This state fund is made up of $1.3 billion in income tax money that the state hands out to local governments with no strings attached.

Local leaders say this money is used to help keep property taxes low. But that argument doesn’t hold water in a state with the highest property taxes in the nation.

They also say it’s a pillar of basic services such as public safety. That’s a convenient excuse. In reality, this money enables reckless spending habits propped up by the state. Practices such as pension spiking, sick leave accumulation and pension “pickups” are rampant in the Land of Lincoln.

Money from the LGDF also enables local governments to pay the state-mandated prevailing wage for work on public projects. The costs this requirement entails are astonishing.

The average annual compensation package for workers receiving the prevailing wage in Cook and Sangamon counties is over $110,000. Meanwhile, private-sector workers in those counties take home median earnings of $34,990 and $34,521, respectively.

Local governments are even spending taxpayer money to lobby against taxpayer interests.

When a statewide property tax freeze proposal was gaining steam in the General Assembly in 2015, government agencies across the state paid out more than $9 million to lobbyists who killed reform efforts, according to data obtained via Freedom of Information Act requests.

And yet, most Republicans still won’t touch programs like the LGDF. Doing so requires taking on the mayors, township supervisors, highway commissioners, park district officials and legions of others who have staked their hopes on multibillion-dollar tax hikes as a way out of the budget mess.

More Illinois politicians must move beyond political convenience, and muster the courage to ease that suffering. The path of least resistance won’t cut it anymore.

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