Weighing budget cuts vs. cigarette tax hike
RICH MILLER email@example.com May 24, 2012 8:06PM
AP FILE PHOTO
Updated: July 3, 2012 9:51AM
‘Hey, Rich, is there any good news?”
I must hear that question a half- dozen times a day at the Illinois Statehouse. So, I’ve developed a standard retort.
“Man, there’s never any good news in this building.”
Despite struggling the past year or so to overcome decades of misrule and mismanagement, Illinois has not yet been able to right itself. Unemployment is falling, but it’s still way too high.
The state government’s credit rating has been bruised and battered for years and is now in danger of falling off a cliff.
Despite a huge income tax increase, the state is still carrying billions of dollars in unpaid, overdue bills. The tax increase was eaten up almost entirely by gigantic annual pension payments, which the state made worse by skipping or skimping on for years.
Pensions and Medicaid spending is are gobbling up almost 40 percent of the state’s budget. And if nothing is done right now, in just a few short years the mountain of overdue Medicaid bills alone will be higher than what the state spends on its annual budget.
In other words, even with the income tax increase, there’s no money left to dig out from under that pile of overdue bills. Not to mention that “natural spending growth” (without adding a single new program) is eating up every dollar and more of natural revenue growth. Even without those unpaid bills, the state simply can’t afford to keep paying for everything it already does.
A corporation or individual in this sort of trouble would probably just declare bankruptcy. But states can’t declare bankruptcy.
Instead, the state has to look for politically popular revenues and make politically unpopular budget cuts.
The new revenues have to be popular because yet another unpopular tax increase this close to the election would surely be the final kiss of political death.
Cigarette tax increases are consistently far and away the most popular revenue stream out there. So, that’s part of the plan to help patch the gaping Medicaid budget hole, which is a whopping $2.7 billion.
People always say they want budget cuts, but they never like the actual cuts. Cutting Medicaid programs and kicking a hundred thousand people off the system won’t be popular at all.
But the ugly, harsh political reality is that a large number of Medicaid recipients live in Cook County, where the Democratic primary is the real election. And that election was this past March.
So, politically, those cuts are easier to make.
But just because they’re politically easier, that doesn’t mean legislators who represents lots of poor people will be voting for those cuts. They won’t. I don’t blame them. All politics is local. I get it.
What cannot be allowed to happen, however, is one group of legislators dictating to everyone else how things should go.
Legislative Black Caucus members announced Wednesday that they wouldn’t be voting for the Medicaid cuts, but they also said they wouldn’t oppose the cigarette tax increase. Doing so would’ve created big problems because without that tax increase the cuts would have to be even worse.
Democrats, mostly, will be voting for the cigarette tax increase. Republicans, mostly, are voting for the cuts, despite the tax increase.
And that’s how it should be, as long as it gets done. Individuals can and should make their point about an individual issue without obstructing the entire process.
So, maybe I’m wrong. Maybe there is good Statehouse news.
Except that even the good news is bad. Snatching health care away from poor people is not exactly something to be proud of.