At Barack Obama’s press conference last Tuesday, ABC 7’s
Andy Shaw told him that across the country “mayors and county board
presidents and governors are facing hemorrhaging budgets and … are
wondering, to paraphrase the late, great Mike Royko, ‘Where’s ours?’”
In his ...
At Barack Obama’s press conference last Tuesday, ABC 7’s Andy Shaw told him that across the country “mayors and county board presidents and governors are facing hemorrhaging budgets and … are wondering, to paraphrase the late, great Mike Royko, ‘Where’s ours?’” In his response, the president-elect made clear -- and rightfully so -- that the Prairie State won’t be in line for any extra goodies. Nonetheless, Illinois should certainly be near the front of the line when it comes to assistance and investment.
A new report from the National Governors’ Association (NGA) has outlined $18 billion worth of ready-to-go capital projects that would give state economies a jolt and put folks back to work. As the Stateline graph below shows, Illinois ranks fifth nationwide, with $831 million worth of road, schools, and other infrastructure initiatives that could be started up within 90 days of receiving necessary funding:
We noted last month that a congressional proposal to map out a state-by-state economic recovery program hit a dead end. Congressional leaders have since begun crafting a new proposal for funding transportation, infrastructure and other projects, which the incoming-Obama administration appears ready to support.
During a radio address last Friday, the president-elect said he’ll launch a two-year “Economic Recovery Plan” to create 2.5 million jobs party through a massive infrastructure initiative. The NGA explains how chanelling such an investment through the states makes sense:
One of the most efficient set of mechanisms the federal government can use to speed a national recovery is investments in existing federal-state programs. These mechanisms are effective because the programs are on-going and because state-by-state funding allocations, administrative procedures and staffs already are in place to quickly distribute any additional funds.
Looking beyond Illinois, state finances nationwide appear to be in a tail spin. In a CQ column last week, Madison Powers of the Kennedy Institute of Ethics argued that the states should be bailed out now, before the situation grows worse:
[W]e have to prepare for the fact that the heaviest burdens on the states are still years out from now. Past experience also shows that even the richest states have been unable to make up for the losses on their own [...]
The important lesson for the federal government is that they need to prepare now for that bailout, and it is likely to cost less and avert a worsening recession if they deal with it now. The reason is straightforward. States can’t ride it lean times with deficit spending or engage in their own Keynesian pump-priming. Balanced budget provisions in their constitutions won’t let them. They have to choose between expenditure reductions or tax increases, and the latter is no real option.
On a related note, Gov. Blagojevich plans to attend an NGA meeting in Philadelphia this Tuesday, which will feature speeches from Obama and Joe Biden. The AP reports that the governor “wants to use the meeting with Obama to discuss how the federal government can help address state budget shortfalls.”