Illinois’ Fiscal Health Tied to Reforms

The compromise on the budget, after an impasse of more than a year, also acknowledged the need to address structural reforms to improve Illinois’ business and jobs climate and implement government reforms. For more than a year, the Governor argued, with Senate Republican support, that reforms are needed to get Illinois’ financial crisis under control and to restore economic prosperity.

There is plenty of evidence that reform is necessary, stressed Senator McConnaughay. Illinois’ public debt continues to climb out-of-control, the state’s unemployment rate remains above the national average – as job losses out-number job gains – and Illinois is one of the top states for out-migration of residents.

Looking back on the recently-concluded spring legislative session, Republicans teamed-up with Gov. Rauner to protect taxpayers from the years of overspending and overpromising of prior governors and General Assemblies, controlled by Democrat supermajorities. The prior Administrations “kicked the can down the road” with unbalanced budgets, borrowing and tax increases. As a result, today, Illinois government is left with a record backlog of unpaid bills and more than $100 billion in unfunded public pension debt.

During the no-cooperation-no-budget 2016 Fiscal Year (July 1, 2015 – June 30, 2016), Republican legislators and the Governor ensured taxpayers were a top priority. They placed a renewed emphasis on Illinois taxpayers and as a result:

·         Defeated the Democrat supermajority FY 2017 spending plan ($7 billion out of balance) that would have raised personal income tax rates to more than 5.5%;

·         Stopped the Democrat supermajority’s attempt to bailout Chicago with an additional $400 million in state taxpayer funds;

·         Linked passage of the stop-gap budget to comprehensive pension reform, forcing the Democrat supermajority to negotiate over this and other structural reforms proposed by the Governor.

Despite its many challenges, during the 2016 legislative session Republican lawmakers and the Rauner Administration’s efforts:

·         Provided record funding for elementary and secondary schools statewide with a plan that fully funds the foundation level, ends the unfair practice of proration for the first time in seven years ensuring no school receives less funding that it did last year, and provides a new poverty grant to help those students most in need;

·         Saved more than $800 million in state spending by making the management of state agencies and programs more efficient;

·         Reformed the EDGE tax credit program to eliminate “special” deals and only provide credits for actual job creation;

·         Banned the revolving door of state officials becoming lobbyists to make money off the programs they designed;

·         Implemented fraud reduction efforts that prevented $188 million in improper unemployment insurance claims;

·         Took action at the Department of Health and Family Services to net state taxpayers more than $250 million by improving the administration of services;

·         Launched a comprehensive review of Illinois police procedures, and other states’ best practices, for handling use of deadly force between officers and community residents;

·         Began the process to sell the James R. Thompson Center;

·         Reduced the number of youth in shelter care and residential treatment centers in the care of the Department of Children and Family Services;

·         Launched a Health and Human Services transformation to improve services to the most vulnerable citizens while also making the services more efficient and affordable.

Senator McConnaughay stressed that the Illinois’ fiscal state won’t change course until a complete and balanced budget is passed that is tied to major structural reforms that grow the economy and reduce government spending. Suggested reforms to make government more efficient and accountable, which were blocked by the Democrat majority this session, include:

·         Term limits for state legislators;

·         Curbing lobbyist gifts to legislators and ending the legislator-lobbyist revolving door;

·         Local control of government costs that send property taxes skyrocketing;

·         Ending fraud and abuse in our workers’ compensation system and curbing lawsuit abuse to make Illinois friendlier to job creation and economic growth;

·         Government purchasing reforms to lower the costs and save taxpayers money. 

A recent report by the Illinois Policy Institute (IPI) revealed the state lost more than 350,000 prime working-age adults (age 25 to 54) over the past ten years, with most of the loss – 290,000 – due to migration to other states. The IPI report states, “Out-migration is a serious problem for Illinois, and policymakers should focus on curtailing it by fostering a better climate for job creation and economic growth. The more Illinoisans leave, the fewer there are left to shoulder the burden of Illinois’ tremendous debts.”

At the heart of the long budget impasse, was an argument made by Democrat leaders that the budget and reforms should not be linked. However, Republican lawmakers and the Governor stressed that these structural reforms fundamentally impact the state’s bottom line.

Legislative Republicans stood behind reform efforts, emphasizing that economic growth is reliant on job creation and noting that increased prosperity would lead to more revenue that government can use to provide critical state services. They also pointed out that getting Illinois’ fiscal house in order will also help get public debt under control so government does not become an unmanageable burden for future generations.

Chapin Rose

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