Editorial: Illinois can’t avoid big spending cuts
February 16, 2011 6:20PM
Updated: August 4, 2011 4:20PM
At the State Capitol on Wednesday, Gov. Quinn walked to the podium and recalled, just one year ago, when “our state’s financial house was on fire.”
“In the past year,” Quinn intoned during his annual budget address, “Illinois has begun an impressive recovery.”
Indeed. In the last year, Illinois enacted significant reforms to its pension and Medicaid systems, cut spending and passed a major income tax increase.
But the state’s work has only just begun. The fire is still burning, and Quinn’s latest effort to douse it will only prolong a slow and painful burn.
As part of his $52.7 billion budget proposal, Quinn hopes to borrow an eye-popping $8.75 billion to pay off a backlog of bills expected to reach nearly $9 billion by June. This is money owed to schools, hospitals, universities, social service providers and corporations.
Paying off those debts should be a top priority, but massive borrowing isn’t the way to do it.
The answer is to radically reduce government costs, including taking on some of the state’s biggest-ticket items. Scaling back pensions for some current employees and reducing state costs for retiree health benefits must be on table. Controversial, we know, but Quinn failed even to mention them on Wednesday.
Borrowing of the magnitude proposed by Quinn sets Illinois on the wrong course. It takes the pressure off legislators to keep whacking away at an operating budget Illinois can’t afford, saddles the state with more debt — an estimated $3.5 billion in interest over 15 years — and almost guarantees the temporary income tax passed recently will become permanent to help pay the debt and sustain current levels of spending.
Republicans already have rejected the borrowing package, and Quinn on Wednesday challenged them to come up with something better.
It’s on them to deliver. And, thankfully, Senate President John Cullerton says he’s willing to listen. Laurence Msall of the Civic Federation has forwarded some thoughtful ideas as a starting point, including limited, short-term borrowing to help relieve some of the pressure on vendors across Illinois who are owed money. Those unpaid bills not only hurt schools and hospitals but also drive up the cost of each contract because vendors demand a premium when they know it’ll be months before they are paid.
A smaller borrowing package would help state government chip away at its unpaid bills, but would not relieve the pressure on Quinn and the Legislature to do the absolutely vital — yet painful and politically toxic — work of reducing the size and cost of government.
Quinn proposed no new programs and $1 billion in cuts — real and difficult reductions.
But, at the same time, government spending grew $1.7 billion because of the seemingly unstoppable growth in pension, Medicaid and state employee health costs. Until Illinois comes to terms with those costs, no amount of borrowing will get the state on track.
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