Members of the General Assembly don't seem too urgent to agree on a budget plan, even though there are just about three weeks left before the May 31 deadline and the state's finances are in dire straits. Gov. Pat Quinn's unpopular proposal -- which would increase the ...
Members of the General Assembly don't seem too urgent to agree on a budget plan, even though there are just about three weeks left before the May 31 deadline and the state's finances are in dire straits. Gov. Pat Quinn's unpopular proposal -- which would increase the income tax rate by 4.5 percent, triple the personal exemption, and cut $1.3 billion elsewhere -- remains the only one out there, although some alternatives are beginning to take shape.
Finding sustainable revenue sources is the most important goal. As a new Voices for Illinois Children budget analysis (PDF) correctly argues, runaway discretionary spending is not the primary cause of the state's economic crisis. The good news is that "nothing’s truly off the table right now," according to Illinois Issues Bethany Jaeger. But finding a solution before the May 31 deadline, she adds, will "likely to require all four legislative leaders to start meeting with Quinn in the same room soon."
House and Senate leaders have started resurrecting some old revenue-generating ideas -- expanding gaming, privatizing the Lottery, and legalizing video poker machines -- many of which have gone nowhere in the past. As we noted in the Early Bird, Senate President John Cullerton (D-Chicago) has suggested that a temporary income tax hike may be the solution, but he's getting a luke-warm reaction from the governor, who said opponents of his income tax reform are "living in a dream world" if they think there's an alternative for a long-term fix. (Republican leaders continue to tune out reality, clinging to the hopeless idea that the state will find enough inefficiencies to cut our way out of this $12 billion hole.)
Meanwhile, just about every statewide human service interest group -- from educators and social service providers to health care advocates -- met in Springfield under the banner Rally For the Common Good yesterday to pressure lawmakers not throw the baby out with the bath water as they look for alternatives to Quinn's proposal. Quinn's taken his lumps for proposed cuts to home health care programs and youth service, but the groups are all backing the income tax hike as a way to prevent the doomsday scenarios they've come to face every year. The Daily Herald reports:
The event named "Rally for the Common Good" was lobbying for Gov. Pat Quinn to restore the $78 million in cuts he proposed to human services programs.
"We all want a strong and prosperous future, and we understand that just as we need well-maintained roads, bridges and schools the state relies on a strong infrastructure of community-based programs - to ensure our children succeed," said Jack Kaplan, director of public policy and advocacy for the United Way of Illinois.
No one is making the case that revenue shortfalls have put the state in its hole better than Voices for Illinois Children, which stacked up state spending over the past decade this week. More from the report (PDF) we mentioned above:
The General Funds — which include the General Revenue Fund, the Common School Fund, and the Education Assistance Fund — support the regular operating and program expenses of most state agencies. GF spending, which represents about half of total state spending from all appropriated funds, has increased at an average annual rate of 3.6 percent since FY 2000. The growth rate has been 4.3 percent for awards and grants to school districts, health care providers, and other service providers but only 1.3 percent for state operations. Almost half of GF expenditures in FY 2008 were used for two major purposes: elementary and secondary education (23%) and medical assistance (23%). Since FY 2000, the prevailing trend has been steady spending growth for these program areas but very little real growth for higher education, human services, and most of the rest of the GF budget.
To his credit, Quinn is staying firm in his insistence that an income tax increase is necessary to balance the budget. In pulling a proposal that would have required teachers and other state workers to contribute an extra two percent of their paychecks toward pension costs, Quinn showed that he's willing to negotiate to gain political support for the tax hike. As we've noted before, Quinn would likely garner more support if he'd commit to spending the extra revenue on long-term investments -- like the education reforms Sen. James Meeks is calling for through SB 750 -- and settle on targeted tax relief, like increasing the state's Earned Income Tax Credit.