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Home » Opinions » Editorials

State revenues down everywhere

Wed, 02/24/2010 - 10:15am | The News-Gazette
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The state's budget picture grows ever darker.

Shortly after the Feb. 2 primary, Illinois Gov. Pat Quinn was scheduled to deliver his annual budget address to the Legislature.

But with the state's budget facing a $10 billion-plus deficit, Quinn found that prospect unappetizing. So he won permission for a three-week delay, pushing the date back to March 10. Perhaps he couldn't stand talking about such a bleak topic. Maybe he was hoping financial news would improve. Perhaps he wanted more time to pray for economic salvation.

But the date for his speech is drawing closer, and it's hard to imagine what he'll say that he hasn't already said. Quinn is on record asserting the need for a 50 percent increase in the state's income tax – from 3 percent to 4.5 per cent. But his fellow Democrats who control the Legislature are also on record, refusing to approve any increase unless Republicans provide sufficient votes to help Democrats protect their members who might be in trouble if they support a tax hike. So far, Republicans have shown no desire to help Democrats out of the financial mess they blame Democrats for making.

In the meantime, there's considerable news – none of it good – and lots of advice for Quinn to consider.

The Rockefeller Institute of Government in New York studied tax revenues flowing into the states and predicts that "tax revenue is likely to remain below its prerecession peak for quite some time."

The combined revenues from personal and corporate income taxes and sales tax to the states were $134.5 billion in the fourth quarter of 2009, compared with $140.2 billion for the same period in 2008. So Illinois is not alone in the sense that almost every state is having financial problems, although it's certainly among a small minority (New York and California, to name just two states) whose finances have been run into the ground by years of reckless spending.

The Rockefeller Institute reports revenues in various states are "insufficient to support current spending commitments" and predicts "more spending cuts and tax increases are mostly likely on the way for many states."

In the advice department, Chicago's Civic Federation has proposed a state income tax hike larger – 66 percent, from 3 percent to 5 percent – than that proposed by Quinn.

That recommendation will gladden the hearts of politicians who can't wait to start spending again. But the federation also is recommending some tough love to go with the tax hike, a round of budget cutting that will be opposed by public employee unions as well as the recipients of government largesse.

The federation wants state spending cut back to 2007 levels, saying that would save $2.1 billion. It also wants changes in the state's public pension programs to make them less generous to new state employees.

Chicago Mayor Richard Daley and state Senate President John Cullerton, longtime proponents of a tax increase, quickly announced their support for the federation's proposed tax hike and budget cuts, but more enthusiastically for the tax hike than the budget cuts.

Beleaguered taxpayers, of course, are less enthusiastic about tax increases. They already are paying more than they feel they can afford, and many have lost jobs or taken pay cuts and furlough days.

This is the witch's brew that Quinn must confront and address, and it would be a tall order even if he was up to the job. Illinois, even more so than other states, is in the midst of a brutal transformation caused by too much spending for too long on too many programs.

Even as it becomes more and more obvious that there isn't enough money to go around, even with tax increases, politicians and various powers that be dream of a return to the good old days when they spent with abandon and didn't worry whether the money was there or not.

No wonder Quinn didn't want to talk about it. Who would? But he'll have to do so eventually and it won't be any easier March 10 than it would have been in early February.

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