Well I was wrong. I said Mike Madigan would never support a tax increase. He did. As a result the state of Illinois’ bankruptcy has probably been put off for another four years. And just in time.
In addition to the $8 billion that Illinois still owes to its non-bank creditors — including schools, hospitals and other not-for-profits — the interest rate on Illinois’ borrowed money is skyrocketing. Illinois was something like the seventh riskiest market in the world in which to loan money based on the pricing it was getting. That puts us in the same breath as Greece, Ireland and Portugal. So with the tax increase everything is cool, right?
No. Unlike New York or California where new governors Cuomo and Brown are proposing draconian budget cuts to go along with steep tax hikes, in Illinois we only get the tax increase. In fact, our Legislature and governor are crowing that they will only increase spending during the coming years by 2 percent annually. In Illinois, that passes for miserliness. And why does no one in Illinois have the nerve to shrink the size of our government in the midst of our fiscal crisis? A cynic would say that in Illinois the politicians favor state employees over the taxpayers they serve. Others have argued that Illinois government is already about as efficient as it can be, and any further cuts would get to the bone. Once the hearty laughter stops, let’s examine that premise.
Apparently, there are consultants out there who have data proving that the state employee headcount in Illinois is not too out-of-whack with our population compared to other states. But remember, this is Illinois. The headcount argument ignores that it is way more expensive to pay for our state employees than it is in most other states. I would not be surprised if an Illinois state employee, on average, costs twice what some other states pay. By laws promulgated by the Legislature, we have one of the most generous state pension plans going. You have all seen the reports about retirees making more than $8,000 a month following their government service. That costs money. And that doesn’t include the sick days and other little perks that, by law, get converted to cash when state employees retire.
The headcount argument ignores that those headcount statistics are changing as we speak. Other responsible states are in the process of reducing the number of employees. Not us. It also ignores a more fundamental issue of public policy. Illinois should only have the number of state employees that it can reasonably afford. The Legislature and recent governors porked up on state spending during the go-go years, but are unwilling to cut back now that the good times have ended.
So I supported the state tax increase. But to have done so without even taking a stab at reducing spending means that the state pension fund is still on its way to bankruptcy (it will run out of money in eight years), the $8 billion in old state bills will not be paid anytime soon, and our state government is no longer in Springfield, but in Cuckooland.
Jack Crowe is a third-generation Oak Parker. He cycles with the Lake and Harlem group and works at the Christo Rey Network of high schools.