22
October , 2017
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Talk of new revenue, borrowing must cease until cuts are made                                      

By Judy Baar Topinka, Illinois Comptroller

 

(Guest Commentary) 

 

Chicago, IL – I had just entered office as State Comptroller in January when already-struggling Illinois families and business owners were blindsided by the largest tax increase in state history.

No one liked paying more to Springfield, particularly in this economy. At the same time, many taxpayers understood the serious budget challenges facing the state and took some solace in believing that the tax increase – however painful – would allow Illinois to regain its fiscal footing.

Sadly, that has not been the case.

In fact, as the Illinois General Assembly enters the final weeks of the Spring legislative session, the state is on pace to end the fiscal year on June 30 with $8.3 Billion in unaddressed financial obligations – including roughly $4.5 billion in unpaid bills from businesses, hospitals, schools, social service and not-for-profit agencies.

The state has indeed brought in additional revenue through the tax increase, but those dollars are already spent. To clarify, Illinois raised an additional $1.6 billion in tax dollars over the last four months, and estimates show it will bring in $6-$7 billion more in the coming fiscal year. But those dollars are needed for future pension and Medicaid costs – leaving few new dollars to pay down the bill backlog and address other unaddressed financial obligations.

The predicament underscores an inescapable reality: spending reform is the only way to restore the state’s fiscal integrity.

That is nothing new. How many times have elected leaders and candidates stressed that “we must address spending?” How many discussions of state government in recent years have been dominated by hand-wringing over the size of the state deficit, and its inability to pay bills? And yet as we look to close the books on another fiscal year the state finds itself with an $8.3 billion hole, matching its unaddressed obligation total from last year.

It is important to note, however, that there are leaders – Republicans and Democrats – who are committed to doing whatever it takes to begin making ends meet, and positive steps have been made. For one, the General Assembly has taken fiscally-responsible action in approving the state’s pension and bond payments, and limiting further growth of our long-term liabilities. Leaders have also increasingly come forward with budget-cut lists and proposals, moving legislative debate toward where savings can be found, instead of how to generate more revenue.

Still, as the state nears the May 31 deadline to complete a financial plan, discussions continue to include talk of new spending and additional borrowing. That must stop, at least for now. To put it simply: Illinois cannot afford spending increases – regardless of the cause. And while borrowing can be an effective financial tool in certain instances, it is stunningly irresponsible without coinciding spending cuts.

From consolidating the state fiscal offices of Comptroller and Treasurer to save dollars and improve efficiency, to adjusting Medicaid eligibility requirements to ensure its long-term sustainability, there are options available.

But with the end of the legislative session approaching, time is of the essence. For the good of Illinois and its taxpayers, action is required on spending – and the clock is ticking.

Judy Baar Topinka was sworn-in as Illinois Comptroller in January, making her the state’s Chief Fiscal Officer.

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