Munger: Illinois’ unpaid bills projected to hit $10 billion by year’s end

The Illinois comptroller warns Illinois' backlog of unpaid bills will reach $10 billion by December.

Illinois Comptroller Leslie Munger warned the state’s backlog of unpaid bills could hit $10 billion by December. Munger noted this is $3 billion higher than the state’s bill backlog in December 2015.

The startling discrepancy between spending and revenue is nothing new for the Land of Lincoln, which hasn’t had a balanced budget since 2001. But the growing backlog of bills highlights the serious need to rein in the state’s out-of-control spending, which is how the state got into its current fiscal mess.

The stopgap ensured funding for critical human services, road construction, prison operations, veterans’ care and higher education in the interim, but did not make any structural reforms to address the state’s long-term health. Munger said in her July 14 press conference, “While the stopgap is a positive step forward, it is a very short-term step. It does not address our larger financial issues and our limited available cash, nor does it provide a predictable funding stream.”

Without serious structural reforms, Illinois’ problems are almost certain to worsen, as the state owes nearly $170 billion in unfunded promises made with respect to state-worker retirements. Pension costs alone now consume 25 percent of the entire state general fund budget.

Given the mountain of unfunded liabilities, Illinois House of Representatives Speaker Mike Madigan has proposed increasing the state’s personal income-tax rate to 5 percent, the rate in place during the 2011-2014 tax hike. But that massive tax hike signed into law by former Gov. Pat Quinn, and the $31 billion in extra tax revenue it brought in, did nothing but encourage Springfield’s reckless spending habits. Politicians doubled pension payments during those four years, while funding for K-12 and higher education actually fell by nearly 10 percent.

Illinois’ problem over the years, and now, has been excessive spending, not a lack of tax revenue. The state’s tax revenues have grown far faster than inflation for decades. In fact, from 2003 to 2016, Illinois collected an average of $5.4 billion a year more in tax revenues per capita than it would have brought in had tax collections merely grown at the rate of inflation.

With the fifth-highest state and local tax burden in the nation, it is unfair for state politicians to ask Illinois taxpayers to chip in still more while politicians refuse to rein in spending. And overtaxed Illinoisans in an underperforming state economy continue to show their displeasure by crossing state lines, taking their taxable income with them and shrinking the tax base.

To change course, the state needs to reform its underfunded pension systems, fix its uncompetitive workers’ compensation system, and instate a property-tax freeze for Illinoisans, who suffer from the highest property taxes in the region.

The $10 billion in unpaid bills the state expects by year’s end is a predictable outcome of years of irresponsible spending by politicians who’ve gotten used to asking taxpayers to make up the difference. Unless Springfield changes its ways the bills will continue to pile up.