New bills would help keep state spending in check
House Bill 3014 and Senate Bill 1546 would tie Illinois’ spending growth to GDP growth, potentially saving billions of dollars as the state needs to live within its means.
A new legislative effort in Illinois seeks to keep state general fund spending in line by tying it to economic growth.
Two bills with the same provisions were filed. State Rep. Dan Ugaste introduced House Bill 3014, and state Sen. Suzy Glowiak Hilton introduced Senate Bill 1546, cosponsored by state Sen. Chris Balkema.
The bill would ensure that “the rate of growth of appropriations from the state general funds over the preceding fiscal year appropriations from the state general funds shall not exceed the rate of growth of the Illinois economy.” The rate of growth would be measured in ten-year compound averages of state GDP growth.
Ugaste said the time is right after Gov. J.B. Pritzker’s budget address.
“As the governor’s Budget Address today showed, the Democrats in control are fiscally reckless and give no consideration to real economic indicators when making decisions about spending.” Ugaste said.
“Therefore, if we pass legislation to make spending dependent upon actual economic growth, we will have a much more fiscally responsible state.”
Historical data from the National Association of State Budget Officers and the Bureau of Economic Analysis shows that growth in Illinois state spending has outpaced economic growth at one of the highest rates in the country, with expenditures rising to 4.03% from 3.26% of GDP since 1997. Only four other states had larger increases.
States like Texas have been able to reduce their spending-to-GDP ratios by enacting a spending cap like the one proposed in Illinois. NASBO and BEA data further suggests that if Illinois had adopted such measures in 1997, the state could have saved approximately $80 billion.
With the second-worst rainy-day fund in the nation, and deficits projected in the tens of billions of dollars for the next five years, Illinois’ fiscal outlook is bleak. The state was recently saved from the most dire consequences of its irresponsibility by billions in federal aid and unexpectedly high tax revenues, but those resources are now depleted.
After passing a record $53.1 billion budget for 2025 that added $1.1 billion in new taxes, a spending cap is exactly what the state needs right now.