By John Tillman, CEO
Illinois Policy Institute
Illinois has been without a state budget for almost two years. I talk every week with state lawmakers, and many of them feel worn down. Unfortunately, many no longer care what’s in the budget. They just want to pass “something” so they can go home and tell their constituents and local media that “the impasse is over.”
We cannot lose sight of the real crisis. The problem in Illinois is not the lack of a budget. And the solution is not to enact another state spending plan like the ones we’ve had in the past. Here is what really ails Illinois: Decades of poor governance. Out-of-control spending. Promises made without any intention of keeping them. And zero accountability.
Illinois will never prosper as long as the growth in government spending exceeds growth in revenue.
It’s a status quo that can’t continue. That’s not a function of politics. It’s a function of math.
So let’s refocus our thinking about the state budget. First, some parameters:
Compromise can be a good thing. When building upon common ground, good faith and goodwill, it is a mechanism that makes democracy work. But agreeing to keep alive facets of a broken state government that will never, ever work ‘in the spirit of compromise’ is not a virtue. Lawmakers need to be able to distinguish between compromise and abdication.
Illinois will never prosper as long as the growth in government spending exceeds growth in revenue. To that end, a reform budget includes a permanent, all-inclusive and ironclad spending cap.
Homeowners desperately need comprehensive property tax reform. A short-term freeze won’t provide the lasting relief they need.
When it comes to pensions, we cannot keep making promises to government employees that we cannot keep. The pension system we have today will never work. There is no way to preserve or fix this system. Real pension reform means a new defined-contribution system for all new employees, and making that available to current state workers who want to regain control of their retirement. This is constitutional – but more importantly, it is imperative.
Reforms to major drivers of state spending – education, Medicaid, workers’ compensation – must be sweeping, not marginal. For example, Senate Bill 12, one of the bills in the so-called ‘grand bargain,’ offered mostly positive changes to Illinois’ workers’ compensation system. However, these changes were marginal and would not provide the full reforms needed to fix the problems within Illinois law that drive away businesses and jobs. The core cost-drivers – wage replacement rates and medical reimbursement rates – were not substantially addressed. Workers’ compensation is an estimated $4 billion to $6 billion regulatory line item across industry in Illinois.
Within these parameters, there is ample room for policy creativity – and compromise. Adhering to them would at long last begin the process of breaking the failed status quo and blazing a path toward a bright future for Illinois. These guidelines are so simple, so moderate, so common-sense and so pragmatic that their merits ought to transcend party lines and even ideological boundaries. Following these parameters also would put political discussions in Illinois in step with the public’s view of how to fix our state.
We recently commissioned a poll that found that more than half of Illinois voters want lawmakers to balance the budget by only cutting state spending. The Illinois Policy Institute developed a plan that does that.
Our budget plan brings together a collection of proposals from Republicans and Democrats over the years. It curbs state spending, ends the pension crisis in a way that complies with the Illinois Constitution, provides property tax relief and enacts major reforms to education, Medicaid, workers’ compensation and other key policy areas. Whether our ideas are adopted carte blanche or lawmakers find better ways to enact the reforms we have outlined, the key is that a reform budget must meet the criteria set forth in the five principles listed above.
If we follow these guidelines, recovery and rebirth for our state and our communities will come. If we do not, then the crisis will return – worse and more intractable than before.