How confident do you feel that Illinois will be able to pay its bills in 2013 and beyond? Further, do you even know how the state is spending your money?
On Friday Jan. 11, Gov. Pat Quinn’s Office of Management and Budget released its fiscal and economic policy report of three-year budget projections for Illinois’ General Funds. These projections are significant and reveal important information about our state’s calamitous fiscal health.
Whether it is for a federal, state or local government entity – or for a working family – a budget plan is a concrete and noteworthy indicator of spending objectives and priorities. Accordingly, Quinn’s budget projections expose what has become Illinois’ primary priority – namely, perpetuating a broken pension system by proposing fake reforms that threaten the security of state employees’ retirements and force taxpayers to pick up the tab when investment returns do not meet expectations. This situation is a result of decades of mismanaged appropriations, excessive borrowing and years of spending more than we take in.
Key takeaways from this budget report:
- Quinn’s administration plans to make massive tradeoffs in spending priorities, allocating more taxpayer dollars to state employees’ pensions than to core government services as early as fiscal year 2014.
- During the next three projected fiscal years, Illinois will spend increasingly more on K-12 and state university employee pensions, while spending less and less on education, public safety, health care and human services.
The report concludes with the Quinn administration hinting at the “need” for more tax increases:
“Fiscal year 2015 and 2016 will require much larger reductions in spending, requiring extensive program re-design to meet the projected budget targets. The budget will be balanced with across-the-board spending reductions of 5.7 percent and 13.6 percent in fiscal years 2015 and 2016, respectively.”
It would be politically disadvantageous for Quinn and the General Assembly to allow pension costs to eclipse essential government services, as they are soon projected to do. The argument that spending cuts or real pension reform are “too little, too late” will likely be made. Nevertheless, tax increases will not resuscitate Illinois’ floundering economy, because our state does not have a revenue problem – we have a spending problem.
Simply put, Illinois is broke.
Jane McEnaney is Policy Outreach Manager for Illinois Policy Institute