1/4/2011
by Kristina Rasmussen
Featured Research: Spending Limit Flaws
Controlling future growth of government spending is key to solving the state’s budget crisis. Tax and expenditure limits are a good way to ensure that government outlays do not grow faster than the public’s ability to pay. All spending limits are not created equal, however. A full House vote on fake reform could happen as early as today. Read on!
The Illinois Policy Institute reviewed a spending limit introduced by Rep. Keith Farnham, and it has some commendable provisions. Notably, it relies on a spending limit tied to per capita personal income growth. Had this limit been in place from fiscal years 1997 to 2009, Illinois would have saved a cumulative $29.4 billion over actual general spending.
Even so, we discovered serious flaws in the legislation, including an “emergency” loophole and an exemption of pensions from the spending cap. The Institute sought to offer constructive suggestions for language improvement at a House committee hearing on Monday.
It’s notable that Speaker Mike Madigan—and not Rep. Farnham—testified in favor of the bill at the hearing. When it came time for others to speak on the bill, the presiding chairwoman refused to allow outside opponents to offer oral remarks. She sustained her decision to limit testimony even after Rep. Mike Bost pointed out that hearings were meant to solicit input from the public. The committee then voted 10-4 to pass the bill.
As written, the spending limit should give fiscal reformers serious pause. Rather than promoting budgetary responsibility, its loopholes could be used to institutionalize an unaffordable level of government spending. The Pension Funding & Fairness Act offers a better path forward for true budgetary restraint that will lead to a more prosperous Illinois.
Contact information for your legislator can be found here.
Read a summary of committee developments, our written testimony with suggestions for improvements, as well as a detailed budgetary analysis.
Recent Media Coverage
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Proposal Would Tie State Spending to Personal Income, State Journal-Register, January 4.
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Thousands Start Work With More Lucrative Pensions, Rockford Register Star, January 1.
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How Does Chicago Stack Up with Snow Removal?, WGN Radio with Greg Jarrett, December 30.
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Institute Senior Fellow Dan Proft Discusses State Debt, Chicago Tonight, December 29.
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Top 10 No. 3: State’s Financial Woes Hit Home, Alton Telegraph, December 29.
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One Village’s Commitment to Taxpayers, Ottawa Times, December 28.
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New Year Could Bring 33% State Income Tax Hike, Courier News, December 27.
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Keeping an Eye on City Snow Removal, NBC Chicago TV, December 26.
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Happy New Year! Now Pay Up!, Southtown Star, December 26.
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