Where is the adult in the room?

By Doug Whitley
CIBM Contributor

In the midst of a controversial election year, Gov. Quinn would like to avoid being the disciplinarian. But it is his obligation to embrace and impose true fiscal restraint on state government. The Illinois General Assembly is unwilling to undertake that job. The test is whether the governor is up to the task of being fiscally responsible by imposing severe spending reductions.

Last month, the Legislature sent the governor a giant, bloated, underfunded omnibus budget and granted him exceptional powers for manipulating the budget and revenues. They are challenging him to do what they won't. They have set him up to be the bearer of bad news because they can't make tough fiscal decisions in an election year. They expect him to be the "adult in the room."

Like kids running away after the baseball crashes through the neighbor's window, individual legislators are hiding from responsibility. Each of the 177 elected members of the General Assembly can take cover anonymously and avoid culpability because each is one small fraction of a faceless institution. As a result, legislative responsibility is diffused and abdicated. The governor is alone.

Dishonesty and a deeper budget hole

The Illinois General Assembly left the Capitol having adopted another dishonest budget that is austere only in the sense that it is frozen at last year's spending level. As in the past, the 2010 budget is unbalanced and severely flawed.

The state's fiscal condition is not unlike that which has brought Greece to collapse. Unlike a nation, our state government cannot print money or devalue its currency to finagle its way out of fiscal crisis. But the Legislature's policies have already downgraded the state's bond rating, created the largest pension debt in the nation, heaped financial abuse upon service providers and their vendors and destabilized the future of the state by continuing to accumulate billions in deficit obligations.

The International Monetary Fund and the European Union imposed painful and severe requirements on the government of Greece. Illinois' government needs to start operating under similar, strict rules. Economic recovery requires the fiscal discipline to eliminate programs, services and entitlements that have been over-promised in the face of insufficient and declining state revenues.

Deficit spending must end. Pension payments must be met. Obligations must be paid in full and on time. Deficit reduction must become a priority. Public employee labor costs and work rules must be re-aligned. Health care spending, the single largest expense, must be cut. The State of Illinois' fiscal situation is so bad, it needs a workout plan like those crafted in bankruptcy court.

Illinois cannot borrow, spend or tax its way to prosperity. Effective, honest, fiscal management is hard. It requires adult fortitude.

Painful decisions

It is painful for elected officials to deny their friends and constituents the tax funds they have grown to expect. Behind every line item in the budget, there are interest groups, public employees, governments and for-profit or non-profit organizations seeking cash. Making cuts of the magnitude required to match spending with revenues will be painful for millions of people who are dependent on state-provided services and entitlements.

It will be painful for taxpayers, too. Even with cuts, it is likely inevitable that an income tax increase will be imposed. It is critical for legislators to resist any significant tax increase until our government has demonstrated fiscal restraint by making spending reductions. New programs must cease unless corresponding cuts provide funding for them. New revenue must be dedicated to paying off outstanding obligations and reducing long-term deficits, such as the billions owed to pension funds.

Shenanigans and charades

The state has routinely deferred, borrowed and engaged in fiscal shenanigans to evade its responsibility to operate with a balanced budget.

During the last decade, state officials have strived to maintain old, extravagant ways even in the face of outward migration, slow growth and significant revenue declines. Illinois has lost more than 500,000 jobs and never really recovered from the recession of 2001. Yet, according to the Illinois Policy Institute, state government spending grew by nearly 30 percent between 2004 and 2009.

The Democrats who have governed the state over most of the last decade have been in denial about financial realities. Federal stimulus funds merely helped insulate state and local governments from responding to the recession in a rational manner and enabled the denial to persist.

Meanwhile, the harsh truths of the recession have reset the stage for most private sector employers and individual families. Voters and taxpayers have found new appreciation and understanding for spending restraint, paying down debt and saving money.

It is a disservice to voters and taxpayers when legislators fail to uphold their sworn oath to the Illinois Constitution, which requires a balanced budget. It is long past time for voters to let legislators know the charade is over. The public needs to demand fiscal accountability be returned to Springfield.

Editor's note: As of press time, The Illinois General Assembly had not yet finished the state budget.

Doug Whitley is president and CEO of the Illinois Chamber of Commerce. He can be reached at (312) 983-7100 or dwhitley@ilchamber.org.

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