Policy expert describes seven major faults in GOP budget proposal
"Illinoisans don’t need a compromise deal that will only offer more of the same failures" -- so says Craig Lesner, the budget and tax research director of the Illinois Policy Institute, in describing the recently put forward Republican budget plan.
Lesner isolates seven key aspects of the proposal spearheaded by House Minority Leader Jim Durkin (R-Western Springs) that he argues fail to provide real relief for Illinoisans, including the same 33 percent income tax increase and expansion of the state sales tax from the Senate Democrats' plan.
“Every one of Illinois politicians’ past deals – from former Gov. Jim Edgar’s pension ramp to former Gov. Rod Blagojevich’s pension bonds to former Gov. Pat Quinn’s temporary tax hike – has something in common: They all avoided fixing Illinois’ structural spending problems, and sent the bill to taxpayers instead,” Lesner wrote in his analysis. “Thirty years of continued reliance on tax increases and debt instead of reforms is why Illinois has perpetually teetered on a financial cliff and its credit rating stands at the precipice of junk.”
The tax increases will cost Illinoisans an average of $1,125 per year while freezing property taxes for four years, the length of time the income tax hike would be in place. This is Lesner’s second point of contention: He argues that property taxes are already too high and freezing them won't help those already struggling. Further, the freeze won’t address the factors causing high property taxes and does not apply to local debt service payments, so property tax bills could still increase over the next four years.
Another key factor for Republicans is a $36 billion spending cap over the next four years, but this also does not addressing the underlying reasons for state spending, Lesner says. Instead of putting reforms in place to cut spending drivers with inherent growth, like pensions, the cap will likely lead to temporary cuts to government programs, he says.
Lesner is particularly opposed to the plan's education measures, arguing that the evidence-based model for school funding distribution will add up to $6 billion per year in education spending for questionable benefits; he cites a lack of student achievement improvements in states with similar models already in place.
The proposal's education measures also feature an unfavorable concession to Chicago Public Schools (CPS), according to Lesner. The state will now cover pension costs to the tune of $156 million for CPS, but Lesner believes the state should stop covering pensions for any schools.
Lesner also rejects the inclusion of Senate President John Cullerton’s (D-Chicago) consideration model to reform current workers’ pensions, which he believes will be declared unconstitutional. For new state employees, the proposal puts a hybrid pension and 401(k) plan in place; Lesner and the institute have long pushed for new employees to be put into a purely 401(k) plan system.
Finally, the plan has a lack of any real structural spending reforms, Lesner says. The plan does include $5 billion in cuts and funds transfers, but he argues that these are all short-term measures that do nothing to address the real issues. Lesner points to workers’ compensation reform, lawmaker term limits and easier consolidation of local units of government as key areas where the state needs change.
“Illinoisans don’t need any more of lawmakers’ 'tax-hike, no-reform' budget proposals,” Lesner wrote. “And Illinois can no longer put off real spending reforms. Politicians have to pass a balanced budget that actually solves the state’s structural problems without tax hikes.”