Editorial: Let the state cost-cutting begin
January 13, 2011 8:50PM
Updated: August 4, 2011 4:20PM
How would you cut state spending? Send your cost-cutting ideas to us at squeezingspringfield@suntimes.com.
Outrage over the tax increase passed in Springfield this week is boiling over.
We get it — no one wants to pay higher taxes.
But this editorial page has supported the increase for one simple reason: Illinois needed it.
As we said the day the tax package passed, this tax increase will pull Illinois back from the brink of financial collapse. If you have doubts, simply consider Illinois’ $15 billion deficit, its worst-in-the-nation credit rating and the $8 billion it owes to nonprofits, hospitals and schools.
But a key condition for our support of a tax increase was that it be coupled with spending cuts.
And we haven’t seen enough of that.
Gov. Quinn and state Democratic leaders owe it to Illinois taxpayers to be just as driven in the quest for budget cuts — including taking on the unions, lobbyists and other special interests — as they were in pushing the tax increase.
They’ve started this work, but much remains undone.
Lawmakers last year passed an aggressive two-tier pension system with less generous pensions for new hires and reformed the state Medicaid system. Quinn says he has cut appropriations over the last two years by nearly $3 billion.
Lawmakers also passed a new “budgeting for results” system that builds the budget around what the state can afford, not what it hopes it can afford, and forces the governor to set firm priorities and performance goals. Sounds logical, but this is new for Illinois state government.
The expected new tax revenue, despite the size of the tax increase, will not be enough to produce a balanced budget without slimming down government, largely because of escalating pension costs and other debt obligations.
To avoid a repeat of our current fiscal crisis in four years, when the bulk of the tax increases expire, we must act now to reduce spending. Many of the cost-cutting answers are already before us. Lawmakers just need to act:
† Built into the tax package, which Quinn signed Thursday, is a new annual cap on spending. This is good news, though the cap allows for spending beyond revenue projections. A key suggestion, forwarded to us by Laurence Msall of the Civic Federation, is to spend less than the cap allows and only up to available revenues.
† Lawmakers must poke and prod the pension and health-care benefits for existing and retired state employees to look for savings. Though the state Constitution appears to protect benefits already accrued, there are steps the state can take that potentially don’t run afoul of the constitution, such as increasing how much employees contribute toward their pensions, raising the retirement age and reducing the annual cost-of-living increase. State retirees who pay nothing for their health care now also should begin to contribute.
At the suggestion of Rep. Anthony DeLuca (D-Crete), the state plans to set up a bipartisan commission to recommend at least $500 million in program cuts each year.
In the meantime, we’d like to hear from you, our readers.
If you work for state government, contract with the government or use government services and have money-saving ideas, send them our way. We’ll wade through the responses and let you know what we learn.
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