Illinois' poisonous status quo
If you're looking for good news on the state of Illinois' fiscal health and its economic prospects for 2014, read no further.
It's old news that the Land of Lincoln has fallen down and is having a hard time getting up. That's why this year's gubernatorial and legislative elections are so important, first the primary in March and then the general election in November.
Voters will be asked to embrace more of the same or opt for change on a variety of important fronts that may range not only for our elected officials but legislative reapportionment, term limits and taxes.
Two reports issued last week — one by the Mercatus Center at George Mason University and the other by the Pew Charitable Trusts — outline two major problems that are inextricably linked.
One relates to the state's economy, while the other goes to the state's ability to function. It boils down to this — if people don't have jobs, they can't support themselves or the government through the payment of taxes. If government doesn't have sufficient revenue, it can't meet its obligation to provide services to the public.
After an examination of the finances of all 50 states, Mercatus ranked Illinois 46th in long-run solvency. That ranking raises serious questions about the state's ability to collect sufficient revenue to pay its bills, including those for public pension obligations and infrastructure maintenance.
Mercatus ranked Illinois 49th in service-solvency, meaning its ability to provide basic services, and fiscal condition. Regarding the fiscal condition index, Mercatus said, the "states at the bottom are there due to years of poor financial management decisions, bad economic conditions or a combination of the two." On the cash solvency question involving the ability to pay its bills, Illinois ranked 50th, dead last.
The numbers reflect the disaster that Illinois has become — the relentless corruption, the short-sighted decisions and self-serving decisions by self-interested elected officials have hit home with a vengeance.
It's fixable, of course, but not without wrenching change. Illinois has to become more hospitable to the job creators who provide jobs that allow its residents to support themselves, their family and the government.
But the second report from Pew doesn't offer much hope there, either.
"After four years of a fragile and uneven recovery, the U.S. job machine is likely to click into high gear in 2014," the Pew report states.
The organization predicted that the American economy will generate 2.6 million new jobs in 2014, an increase of 400,000 in 2013. Just two states — Texas and California — are expected to get nearly 600,000 of those new jobs.
In contrast to the states at the very top, Illinois is projected to be at the bottom in terms of job creation, ranking 49th. Job growth in Illinois is expected to increase by less than 0.98 percent.
Illinois will never be a fiscally healthy state until it has a healthy economy. The politicians can keep raising taxes, as they did in January 2011 with the 67 percent state income tax increase. But the billions in new revenue didn't solve the state's problems, and neither did that tax hike make Illinois a more attractive place to live and work.
Now our state officials are talking about another state income tax increase, this one in the form of a progressive income tax that will generate billions more in new revenue for them to spend and provide another disincentive for job creators to locate or expand in Illinois.
They'll sell it as a cure-all, but it won't cure anything except the political itch to spend more and more.
Illinois has been down so long, it may look like up to its residents. But this state can do better, and it must if it's ever to lift itself out of the gutter.