Thursday, March 08, 2007

Illinois Budget

Gov. Gonad has some real budget issues. He runs a relatively low tax state, he promises "no new taxes," the state has long running fiscal problems, and he wants to implement sweeping new benefits for Illinois citizens. A classic problem of wanting his cake and to eat it too. So how does he handle it? He uses one time gimmicks to get an influx of cash. Previously he has borrowed heavily from the pensions of state employees. He has sold the Thompson Center in downtown Chicago to a private company and then turned around and leased all the office space the state government was using previously. Now, he wants to lease the lottery to pay for the pension fund that he raided when he first became governor.

Of course he's not entirely opposed to taxes. He just wants to implement them on corporations. He is proposing a $6 billion tax on corporate profits. Lawmakers saying this will be passed on to consumers are right, it will be, at least in part. But does that make it wrong? Funding education and health insurance for all are important, admirable goals.

A counter proposal by State Senator Meeks is a tax swap to pay for school funding. The tax swap would include an increase in the income tax and an expansion of the sales tax and in exchange lower property taxes. But aren't property taxes levied at the local level? Levied by cities and counties? The state can raise income and sales tax revenue but can they mandate a decrease in the property tax rate across the state?

The one time gimmicks by Gov. Gonad are bad business. The influx of cash hides the funding problem. The tax increases / changes are the only way to really pay for the services that people want or claim to want. When they see the actual money coming out of their wallet they can demand less services. There is the beauracratic issue of perpetual programs. Even when a program has accomplished its goal or proven not to be effective or is no longer wanted it is very hard to kill it. But that is the courage that politicians need and the majority lack.

But, if we want universal health insurance, we have to be ready to pay for it. If we want world class schools, we have to be ready to pay for it. If we want effective public transit and uncongested roadways, we have to be willing to pay for it. There are not free lunches. I want all those things (universal health insurance should be national and not state by state) but maybe the final costs will be too much. Maybe not. But don't hide the costs because that lie will destroy people's confidence.



Post a Comment

Subscribe to Post Comments [Atom]

<< Home