The president and CEO of the Illinois Chamber of Commerce is renewing his call to give up the status quo in Springfield to dig out of the state’s fiscal mess.
Todd Maisch told WJBC’s Scott Laughlin it boils down to the need for the governor and lawmakers to promote economic growth to increase revenue instead of raising taxes.
“We think that’s the wrong approach,” Maisch told WJBC’s Scott Laughlin regarding increasing revenue through higher taxes. “You’ve got to go ahead and spur small- and medium-sized business investment if we’re ever going to get out from this cycle where economic growth trails government spending. It’s just a dead end. You’ve got to break that cycle. It’s painful right now, but you’ve got no choice but to do it.”
No argument at all that we truly need some real growth in our state’s economy.
* But the Civic Federation shows us how many “painful” cuts need to be made immediately (before any long-term “growth” can kick in) if taxes aren’t raised…
If GOMB’s revenue projections and maintenance - level FY2017 expenditures are assumed, a one-year cut of over 26% is necessary to eliminate the FY2018 structural deficit. This would represent a cut of 18.5% from FY2015 spending levels. If implemented across the board, this would mean cutting K - 12 education from $7.4 billion to $5.5 billion in one year. It would also represent a cut of approximately $1.2 billion from FY2015 levels.
Similarly, higher education would experience a cut of $482 million in one year. This would follow two years of underfunding from the FY2015 level that totals $1.4 billion. Finally, human services would also experience a one-year cut of more than $1.5 billion, also following two years of underfunding without full-year budgets.
Some efforts, including debt restructuring and statutory transfer reform, could mitigate these cuts. However, existing consent decrees and further litigation resulting in court-ordered spending would reduce the flexibility of the state to implement cuts in a cost-effective manner. As a result, cuts would have be concentrated in areas with less legal protection.
Even after the severe cuts needed to balance the FY2018 budget, further reductions would be needed to eliminate the backlog of bills. Additional spending cuts of 4.45% per year would eliminate the backlog by FY2022. The cuts total more than a 38% reduction in spending over five years. Cuts of this magnitude would almost certainly result in a decline in the quality of life in Illinois, and would represent a drastic departure from the current understanding of the relationship between the government of Illinois and its people.
Keep in mind that such cuts would undoubtedly force up property taxes and university tuition, which wouldn’t be great for “growth.” All because they can’t agree to raise the income tax rate by a point-and-a-quarter.