Illinois lawmakers aren’t really spendthrifts

Bill Knight column for 9-12, 13 or 14, 2019

It’s easy to find fault with government, whether it’s warmongers in Washington or a township that didn’t plow your road fast enough. But the Illinois Policy Institute (IPI) – a group with anti-government, libertarian leanings – would seemingly criticize Illinois if the state balanced its budget, improved roads, cared for the needy and sought to make income taxes fairer.

Which it seems to be doing.

Government is a convenient target – unless you value schools, bridges, help for the jobless or sick or elderly, etc. Then, it’s far more efficient than relying on individuals without the resources to construct airports, pay teachers, feed the hungry and so on.

The IPI’s Adam Schuster last week blasted Illinois again, focusing on one statistic in the Comprehensive Annual Financial Report (CAFR) released Aug. 29, a document that also shows considerable progress in a financially challenged state: Illinois’ “net worth.” The bookkeeping number dropped by 35 percent in a year, Schuster wrote, an accurate but misleading note skewed by an accounting change that now includes state employee health-care liabilities. He also adds that lawmakers should enact “necessary spending reforms,” and he undoubtedly means cuts. It’s an apparent effort to gear up to defeat the Fair Tax question on the November 2020 ballot, a change from a flat tax to a graduated income tax, where rates increase as taxable income rises.

Cutting taxes and also slashing spending isn’t logical, of course. That’d be like reducing household spending AND dropping your income.

Most state spending in Illinois is made up of health and social services ($28 billion) and education ($20 billion), together totaling about 70 percent of expenditures, according to the 397-page CAFR.

The lengthy report shows that state finances are actually improving. For example, its $7.7 billion deficit is almost half what it was last year.

A second report, the much shorter (83-page) “2018 Illinois National Rankings” released by the legislature’s Commission on Government Forecasting and Accountability, also offers positive perspectives.

In the last decade, Illinois’ net discretionary spending is down 20 percent, health care is down 23 percent, public safety and human services are down 26 percent, and higher education funding is down 52 percent, according to Chicago’s Center for Tax and Budget Accountability.

Compared to other states, Illinois ranks 34th in the country in public-welfare spending, 15th in spending on elementary and secondary education and 13th in spending on highways, adjusted for population size, according to this report. Illinois ranks higher in police (6^th) and on prisons and jails (12th), but as ex-Gov. Bruce Rauner found out as he tried to cut spending, it had already been done.

Lawmakers may spend billions, but they’re hardly spendthrifts.

Fiscal challenges remain, of course, from $133 billion in unfunded pension obligations (full disclosure: I earned a pension after working 21 years at a state university); general-revenue deficit spending over 20 years of Republican and Democratic administrations; a credit rating that’s the nation’s worst (although Moody’s Investors Service this summer raised it from “negative” to “stable”); and a “net position” (comparing all assets and liabilities) $136 billion in the red – but even that is a $48 billion improvement.

In other anti-government activities, the IPI’s lawsuit challenging the state issuing general obligation bonds was tossed out last month by Sangamon County Circuit Court Judge Jack D. Davis II. State Treasurer Michael Frerichs also dismissed it as “another political stunt by the extremists at the Illinois Policy Institute,” and Moody’s said the decision was positive news for Illinois.

Other good news would be critical reports that are not just accurate, but complete and fair.

Like a graduated tax would be.