Taxpayers deserve respect in budget battle

Posted2/27/2017 1:00 AM

Illinois families are struggling to pay the highest property taxes in the nation. They watch their neighbors and local companies leave for other states at record rates. They take on crushing debt to pay for rising tuition at Illinois' public universities.

And they see their tax dollars going more and more to pay for government-worker retirement costs instead of services their communities need.

Despite Illinoisans' struggles, Illinois Senate leaders seem intent on passing a multibillion-dollar tax hike as part of their "grand compromise." The only thing politicians are debating is what to tax and by how much.

This is not the debate Springfield should be having. It's an insult to Illinoisans, who know that lawmakers have done nothing to reform how Illinois' bloated and inefficient governments operate.

A real budget debate would focus on what spending should be reformed.

That's why the Illinois Policy Institute has introduced a plan that makes fundamental, structural changes to Illinois government. We provide a balanced budget that avoids hiking taxes on struggling Illinoisans and avoids the financial gimmicks and fake reforms of the past.

You can read our plan, "Budget Solutions 2018," at It balances the budget through comprehensive property tax reform, ends Illinois' pension crisis through self-managed plans, and realigns state spending with what taxpayers can afford.

Of course, any plan that forces government officials to enact serious reforms invites their criticism and opposition. The status quo works just fine for most politicians, but it's made a mess of ordinary Illinoisans' lives.

Take property tax reform, for example.

Changing a culture of local government overspending will be difficult. It requires aggressive consolidation of Illinois' units of local government, which are far more numerous than those in any other state in the nation. It requires freezing property taxes and limiting the ability of local governments to hike other taxes and fees. It requires reforming the state subsidies that block accountability and fuel excessive spending. And it requires empowering local leaders to balance their budgets without the burden of costly Springfield mandates.

Politicians on both sides of the aisle are reluctant to throw their weight behind such a package because those reforms strike at the heart of bloated local government.

Local leaders will cry poor at any talk of a reduction in state dollars. But taxpayers shouldn't fall for that. It's what got the state into this mess in the first place.

In Arlington Heights, two-thirds of the city's more than 400 full-time employees make over $100,000 a year in total compensation. In Schaumburg, police and fire salaries have grown 33 percent and 22 percent, respectively, over the past decade, while the average private-sector earnings in the city have grown just 4 percent.

School superintendents in the area earn annual compensation of more than $250,000 and will receive multimillion-dollar pensions in retirement. And Elgin residents must pay for 13 separate local governments and the bureaucracies that run them.

Those costs are funded through ever-increasing property taxes and billions in state subsidies.

That's why the first step in the Institute's property tax reform plan is a five-year property tax freeze. Our plan pursues several additional reforms to make this freeze work, including eliminating state subsidies that block accountability to taxpayers and ending the top-down mandates that give Springfield outsized control over local budgets.

While property tax reform is essential, the state crisis will not end until pensions are reformed.

The pension system doesn't work for pensioners, who worry about their collapsing retirement security. It doesn't work for young government workers, who are trapped in an unfair scheme that may never pay them benefits. And it doesn't work for taxpayers, who pay more and more each year to pension funds that fall deeper and deeper into insolvency.

The Institute's plan puts the state on a path to ending the broken defined-benefit pension system, while complying with the Illinois Constitution. We create a 401(k)-style plan for all new workers going forward, and also give current workers the option to participate in the new plan. Illinois workers will no longer be forced to participate in a retirement plan over which they have no control.

Our plan also tackles the costs of state government, not through service cuts, but by ending administrative bloat in higher education, returning the cost of government benefits to a level taxpayers can afford, and reforming inefficiencies in state health care spending.

Politicians will find every excuse to stick with the status quo, but a balanced budget without tax hikes is what Illinoisans deserve. That's exactly what the Institute's plan offers.

It's time to give taxpayers a real seat at the bargaining table.

Ted Dabrowski is vice president of policy at the Illinois Policy Institute.

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