By Ben VanMetre -
Illinois has a spending problem. Spending per capita has grown nearly three times faster than it would have under a responsible spending limit – one tied to the growth of inflation and population. That means Illinois could be spending $1,200 less per capita today if it would have enacted a responsible spending limit in 1990.
The underlying cause of this rapid growth in state spending is a culture of disrespect for taxpayers and an unwillingness to enact real reform. Time and time again, lawmakers increase taxes and borrow against the future in order to live beyond their means today. They have avoided reform at the expense of our children and grandchildren.
In an attempt to curb Illinois’ out-of-control spending, lawmakers passed a weak spending cap in 2011. The limit prevents General Fund expenditures from growing more than 2 percent each year. Not only is the 2 percent limit arbitrary, but it also far exceeds the available revenues each year.
The 2015 cap is $5 billion higher than the resources Illinois is expected to have available during that same year.
The solution to this problem is simple – enact a responsible spending limit tied to the growth of population and inflation.
The most effective spending limits include the following characteristics:
- Limit growth in spending to the sum of inflation and population growth
- Codified in the state’s constitution
- Based on spending not revenues
- Require a supermajority or public vote for an override
- Contain a provision that automatically refunds surpluses in excess of the limit
Current spending is far too high. Before implementing an effective spending restraint, lawmakers must first realign spending with the state’s fiscal realities and then restrain growth in spending going forward.
A strict spending limit works because it forces politicians to critically evaluate how tax dollars are spent. Having this mechanism means lawmakers would have to think twice about how they spend taxpayer dollars instead of resorting to more tax increases.
Ben VanMetre is Senior Budget and Tax Policy Analyst at Illinois Policy Institute