WE ARE ILLINOIS
Stop. Your. Borrowing.
Chicago Tribune Editorial
In January, Gov. Pat Quinn and his fellow Democrats in the state Legislature told all of us we have to surrender an additional $7 billion in income taxes so that deadbeat Illinois can pay its old bills.
Now Quinn and some Democratic lawmakers want this hugely indebted state to borrow $8.75 billion so that … um … deadbeat Illinois can pay its old bills.
The governor likely will make yet another pitch for this dangerous and unnecessary proposal on Wednesday when he suggests a state budget for the fiscal year that begins July 1.
Fine for you, Governor, to ask if we citizens will let you continue to mortgage — in billions upon billions of dollars — what still remains of Illinois' financial future. The answer has to be no.
Quinn has had two years to reinvent state government and lower its overhead. He hasn't done so. Instead, he has embraced ceaseless borrowing — and his 67 percent hike in the individual income tax rate — as his ever-ready solutions. His tax hike bill did nothing to lower state spending; in fact, it allows spending to rise. His proposal for still more debt also would do nothing to lower spending: Future pension benefits for current employees, freebie health care for state retirees, employee wage increases, guarantees of no layoffs for union members, promises not to close obsolete state institutions — Quinn and the Democrats who run the Legislature have squandered the two years when they could have been re-engineering all of these state expenditures and many more.
That's the core problem every Illinoisan needs to grasp: With Quinn & Co. in charge, these unsustainable patterns of spending just go on and on. More taxing and borrowing only liberates them from having to restructure how Illinois does business with public employee unions and others who benefit from taxpayer dollars.
The governor would retort — expect to hear this from him Wednesday — that he has cut state appropriations by more than $3 billion. He would have you believe he's a frugal guy who has taken a machete to the budget.
That's just not true. Much of what Quinn boasts of having "cut" is spending that has merely been shifted to accounts outside the state's general funds. Other "cuts" are just slow payments for services or goods.
As a result, the total amount of money Illinois spends has been rising, not falling. The governor's boasts about appropriating less from the general funds falls in the category of true but shrewdly incomplete.
Credit where it's due: The Civic Federation of Chicago was the first to blow the whistle, in a report in November, on this disconnect between what's appropriated and what's actually spent. The watchdog group documented how the state's rapidly rising debt service payments are helping drive total state spending to new heights.
Now imagine the impact of adding another $8.75 billion in borrowing to that burden.
What's truly infuriating is that much of the money Quinn wants to borrow would go not to paying old bills, but to propping up other state spending. The synopsis of the borrowing bill, introduced by Senate President John Cullerton, says the proceeds of the bond sales "shall be used to pay vouchers that are at least 60 days past due, medical expenses incurred by the State under its health plans, corporate income tax refunds, and other operating expenses of the State."
That's right. As with prior borrowing to cover annual payments into the state pension system, the Democrats want to borrow long-term money to pay routine operating costs of state government. By that corrosive tactic, Quinn and Cullerton would dump today's everyday expenses onto tomorrow's taxpayers.
And it gets worse: By the Civic Federation's estimates, taxpayers would pay more than $3.4 billion in interest to retire these 15-year bonds. And the proposal backloads both principal and interest payments: Total debt service would leap upward in 2015 and 2016 — when Quinn's supposedly "temporary" income tax hike is scheduled to vanish.
Think about that. If Illinois issues this new debt, the pressure to extend the "temporary" tax increase will be enormous.
The solution here is for the governor and Legislature to do what they've thus far refused to do: Pare down state expenses so that those immediate savings — coupled with their gully washer of new income tax revenues from the tax hike — will retire past-due bills.
As for this proposed $8.75 billion in new debt burden for taxpayers, Gov. Quinn, legislators: Stop. Your. Borrowing.
SOURCE: Chicago Tribune
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