Illinois Republican Party

12 steps before a tax hike
3/17/2009

Chicago Tribune Editorial
March 17, 2009

Illinoisans fearful of driving more employers to lower-tax states and lower-cost countries will be on guard Wednesday as Gov. Pat Quinn floats a state budget for the fiscal year that starts July 1. Should legislators approve the tax increase he'll propose?

Here's a score card: If Quinn doesn't deliver on these 12 points before he hikes taxes, you'll know he isn't doing his job:

• A wage and hiring freeze: The Civic Federation of Chicago proposes capped or reduced state spending. Businesses throughout this state are freezing wages and hiring—some are cutting salaries. Quinn will have to ask for sacrifices in wages and increases in employee benefit contributions.

• Lower-cost internal services: It's senseless for taxpayers to fund full-time employees, with extraordinary benefits, to perform food, janitorial, technology and other internal services that easily can be outsourced. This is a simple way for Quinn to meet his pledge to "cut, cut, cut" state costs.

• Streamlining Springfield: Former Gov. Rod Blagojevich cut the state's payroll to a point lower than his predecessors' finance gurus said was possible. Quinn's stated determination to slim state government has to further combine offices with companion functions. How much smaller does he want this government to be?

Illinois has 7,000 local governments and many siphon money from state taxpayers. How about starting to reduce revenue sharing and grants to local governments by consolidating or eliminating many of them, starting with small school districts?

• Coming clean: Quinn's statements on the impact of his proposed tax scheme need to be a lot less mushy than his statement Sunday: "Families that are middle class, I think, will have no higher taxes or lower taxes. There may be some a little bit on the higher-income scale that'll have to pay a little more." We hope he'll say how his plan would affect families—up and down the income spectrum—depending on their net (not gross) income on Line 11 of the Illinois 1040 tax form. Citizens—and employers mulling in which states to locate new jobs—deserve candor on what his plan would cost them.

• State dollars, federal dollars: The governor needs to tell us how much federal stimulus money for operating and capital expenditures he expects to wind up in Springfield. At least some of those dollars would reduce Quinn's asserted need to raise more dollars from taxing Illinoisans. Bottom line: What's the impact of federal stimulus money on his spending plans?

• Maximizing state institutions: On Sunday this page criticized Quinn for leaving a new prison in northwest Illinois underoccupied while caving to local pressure to keep open a 137-year-old prison in Pontiac. Quinn has to consolidate state institutions to extract the best services from scarce resources. A place to start: Close the Howe Developmental Center in Tinley Park, which lost its federal funding amid charges that rampant neglect and mismanagement have contributed to a number of patient deaths.

• Selling surplus property: We keep hearing from state employees about surplus real estate, motor vehicles, highway and office equipment and other property the state doesn't need. Gov. Quinn, will you announce the sale of acres of goods—and acres of acres—that the state can jettison with minimal or no harm to its core missions?

• Paring down pensions: Generations of legislators and governors lavished sweetheart pension deals on state workers. As a result, the state's unfunded pension burden—it's between $70 billion and $80 billion—is a terrible millstone around taxpayers' necks. Quinn appears open to a two-tier system that would lower pension benefits for new hires. The number of years employees need to work for pension eligibility also should rise, as should their retirement plan contributions. Quinn needs to speak of these as incontrovertible demands, not negotiating points.

• The education industry: If schools are to get more money, the governor needs to demand corresponding reforms in how they spend the money they get today—and in how they do, or don't, improve student outcomes. Will Quinn demand pension reform in school labor contracts? Easier paths to firing the relatively few lousy teachers? More money only for districts that agree to spend it on tactics—such as smaller class sizes in the lower grades—that certifiably produce better educations for kids?

Or will Quinn give schools more money to fund . . . bigger salaries for grown-ups?

• Health care for low-income people: Medicaid accounts for a quarter of the state's operating budget. This can be a much less costly managed-care system. Plus, the state owes $3.2 billion to doctors and other providers and is months behind in paying its bills. Any new funding from the feds should go to paying the current bills, not to expanding coverage. Quinn should drop the expensive and likely illegal expansion of coverage under Blagojevich: Roll back the FamilyCare program to levels legislators approved.

•Health care for employees and retirees: Start by effectively managing the state's health insurance program for employees and retirees. Such reforms, the Civic Federation says, could save $264.6 million to $466 million. Example: State retirees with 20 years of service now get free health insurance. Only 14 other states—and a handful of private employers—offered such generous benefits for retirees, the federation reported in 2007. Illinois no longer can afford this generosity.

• The consequences of failure: During the past two decades, Illinoisans have increased their tax payments to Springfield at roughly double the rate of inflation. Yet lawmakers have increased spending at an even faster rate. What are the consequences for their refusal to make state government live within its means—do they pay in Quinn's budget? That is, what legislative salary, staffing or other cuts will he urge that members of the General Assembly absorb? What percentage or dollar penalties will apply to their fiscal 2011 budgets if, in fiscal 2010, they once again overestimate revenues—or overspend?

Source: Chicago Tribune

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