Governors and legislatures are wise to be cautious about taking actions that could damage the economy. Inaction in Illinois, however, is having the same effect. As Governor Quinn prepares for his annual budget address on March 6, he will have to face the increased costs from his inaction--and that of his party--on implementing reforms in the FY2013 budget and passing pension reforms.
Information from the House Revenue and Finance Committee points to over $1 billion of increased costs in this budget year due to the failure of the Governor to implement reforms directed by the legislature. Add another $1 billion in projected spending due to the failure to pass pension reform.
The comprehensive Medicaid reforms in the SMART Act provided a blueprint for the Governor to reduce spending by $1.6 billion this year. His failure to implement the plan will cause the state to spend over $400 million more than budgeted for Medicaid and $323 million more for the Community Care program. In addition his failure to reach a collective bargaining agreement with the state’s largest union will result in increased spending for health insurance.
Finally, failure to reform the pension system will force state payments to increase by $1 billion next year. Altogether, these actions will add $2 billion in budget pressure next year and force significant reductions in education, safety and other priorities.
Perhaps Governor Quinn should read the book The Coolidge Lesson on Taxes and Spending about how our 30th President cut spending, reduced debt after the First World War, stimulated economic activity and lowered taxes in the process.