Jim Dey | Even Pritzker can't buy his way out of this problem

Jim Dey | Even Pritzker can't buy his way out of this problem

Becoming governor of Illinois has created a whole new world for multibillionaire businessman J.B. Pritzker. Here's why:

For the first time in his life, this poor little rich guy doesn't have enough ready cash.

Personally, of course, he's flush. But officially, he's singing, "Buddy, Can You Spare a Dime?"

The state he now oversees is a financial dumpster fire. Illinois is not just broke, but deeply in debt. Pritzker has promised to fix it. But how?

The governor will tell the people of Illinois on Feb. 20, when he delivers a combined State of the State and budget address. He has long embraced raising state income tax revenue by passing a progressive income tax amendment to the Illinois Constitution.

Aside from that, taxpayers will just have to wait to see what he has to say about fixing the mess our elected officials worked so diligently for decades to create.

But Pritzker has no shortage of outsiders offering unsolicited advice as to how he should proceed.

Just this week, two groups — the Civic Committee of Chicago and the Illinois Policy Institute — issued lengthy papers that include a wide variety of policy proposals they contend will — over time — restore the state to sound fiscal health.

The Civic Committee is made up of a bunch of community blue bloods. IPI, which has offices in Chicago and Springfield, is a think-tank that embraces free-market economics.

Both identified similar problems and some similar solutions. But their proposals are mostly at variance.

Even more important, Pritzker's approach appears to be at odds with the solutions the two proposed.

The Civic Committee sees the state's disastrous finances — $6.9 billion-and-growing in unpaid bills, $133 billion in pension under-funding and a roughly 20-year streak of deficit budgets — as a threat to economic growth.

"Without a growing economy, the state will not be able to move forward to provide vital services to all Illinoisans and focus on other future growth initiatives," it states.

Among its recommendations is overseeing a combination of tax increases and spending cuts that add up to $8 billion.

Mostly, the committee is proposing tax increases. That includes taxing retirement income ($1.9 billion in new revenue), increasing the state income tax from 4.95 percent to 5.95 percent ($3.7 billion in new revenue), increasing the corporate income tax to 8 percent ($300 million in new revenue) and expanding the sales tax ($500 million in new revenue).

The committee also recycles old ideas the Illinois Legislature refused to address under former Gov. Bruce Rauner, including dramatic consolidation in units of local government, the revision of workers'-compensation laws in ways that make the state more attractive to employers, and the restructuring of the current "not sustainable" debt-ridden public pension plans.

The committee advocates much more, including adopting an honest budget process to replace the traditional flim-flam spending plans the General Assembly usually approves.

"The state frequently uses short-sighted budget practices — such as one-time revenues, inter-fund borrowing and borrowing to fund current operations — to 'balance' the state's budget," the committee said.

The IPI approach directly contradicts much of what the Civic Committee recommends.

It focuses on reducing spending — or slowing spending growth — to eliminate unpaid bills and balance the budget.

"It's hard to make the numbers work when Illinois' biggest costs drivers, namely governmental worker pensions, salaries and health insurance, continue to eat up the bulk of state spending at the expense of social services, higher education and more," said IPI budget director Adam Schuster.

IPI calls for amending the "state constitution to protect earned benefits, but allow for changes in future benefits." That would save an estimated $12.2 billion over five years.

IPI wants to reduce administrative bloat through "school district consolidation" that would save an estimated $2.9 billion over five years.

At the same time, IPI wants to end automatic pay raises and modify the cost of health insurance for government workers — with an estimated savings of $4.2 billion over five years.

IPI said state workers are "already among the highest-paid government workers in the nation" and should be required to pay health insurance costs "that more closely matches their peers in the private sector."

The fiscally conservative IPI is a polar ideological opposite of the liberal Pritzker. It wants to cut spending while he appears to want to dramatically increase it and levy higher taxes to pay for it. So there is no common ground between the organization and the Democrats who control state government.

There also is little common ground between the Civic Committee and Pritzker. The Civic Committee wants to raise the flat tax by another 20 percent now. Pritzker has indicated he'll wait two years to pass his proposed progressive income tax amendment.

Given the desperate nature of the situation, it may well be that no one has a politically acceptable solution to the state's woes.

The IPI and Civic Committee have given it their best shot. Next up is our for-the-first-time financially embarrassed Gov. Moneybags.

Jim Dey, a member of The News-Gazette staff, can be reached at jdey@news-gazete.com or 217-351-5369.

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