Illinois government has a lot of problems, revenue isn’t one of them

Illinois families deserve better than to be told the only real solution is in their pocketbooks.

J.B. Pritzker will deliver his inaugural budget address Feb. 20. He’s staring down a deficit of about $3 billion.

It makes sense politically to pin this situation on the faults of his predecessor. And while former Gov. Bruce Rauner should take some of the blame, Illinois was already home to the worst credit rating of any state in the nation before he took office.

What doesn’t make sense? Claiming Illinois’ fiscal problems are the result of not taxing people enough.

From 2007 to 2017, state spending in Illinois grew nearly 50 percent faster than personal incomes, on a per capita basis. Illinoisans saw a $31 billion temporary income tax hike, the largest permanent tax increase in the state’s history, the second-worst income growth in the nation and outrageously high property taxes to boot.

Despite this, Springfield did not pass a single balanced budget.

Does that sound like a state too shy to tax? No. It’s one that recklessly spends beyond its means.

Pritzker has a big task ahead of him. Balancing budgets won’t be easy. But looking at the math instead of hoping Illinoisans will stick around to pay an even higher tax burden lights a path forward.

The Illinois Policy Institute last week published Budget Solutions 2020. It’s a five-year blueprint to balance Illinois’ budget, pay off debt and cut taxes. The only source of new revenue included in the proposal is from marijuana legalization, as both Pritzker and House Speaker Mike Madigan have signaled that it will be a priority.

So how can one balance the budget without new revenue? Slashing services? Shuttering shelters? Mass layoffs?

None of that is necessary if lawmakers tackle the core cost-drivers of Illinois government.

In other words, if Pritzker cannot address pensions (677 percent increase in state spending between fiscal years 2000 and 2019) and employee health insurance (244 percent increase), he won’t get home on balanced budgets. For reference, state spending on K-12 education grew by 73 percent and all other state spending grew by 18 percent over the same time period.

Here are the three biggest savings Pritzker can find to balance the budget without middle class tax hikes:

First, pension reform. Lawmakers must seek an amendment to the state constitution that protects earned benefits but allows changes in future benefit accruals. Then they can reintroduce reforms similar to those passed through the Democratic supermajority-controlled General Assembly and signed by a Democratic governor in 2013. The state should also align responsibility for setting pension benefits with the accountability of paying for them at schools and universities. This saves $12.2 billion over five years.

Second, put classrooms over bureaucracy. Reducing administrative bloat in Illinois school districts while increasing state education funding with inflation – rather than the rapid, unsustainable increases put forth in the state’s new “evidence-based” funding formula – would save $2.9 billion over five years.

Third, play fair at the bargaining table with the American Federation of State, County and Municipal Employees. State workers in Illinois are the second-highest paid in the nation after adjusting for cost of living and receive platinum-level health insurance. AFSCME workers paid 16 percent of their annual premium costs in 2016, while their private sector counterparts paid 31 percent of premium costs for family plans, not including out-of-pocket costs, according to a study by the Henry J. Kaiser Family Foundation.

Bringing those benefits closer in line with the private sector would save $2.5 billion over five years. Limiting automatic pay raises would save hundreds of millions more.

These changes would not come easy. But what’s much harder is planning your family’s financial future – let alone a business – in a state that continues to overspend. This is the only path by which Pritzker can keep his campaign promise not to hike taxes on the middle class while getting the state’s fiscal house in order.

Illinois families deserve better than to be told the only real solution is in their pocketbooks.