Spending cuts have been made; state must keep focus on revenue
J.B. Pritzker's first year as governor stands in stark contrast to that of his immediate predecessor Bruce Rauner. While the Rauner Administration struggled to find common ground with the General Assembly on a host of issues, Gov. Pritzker worked both sides of the aisle to gain consensus on numerous pieces of significant and in some cases groundbreaking, legislation -- especially on fiscal and tax policy.
This included everything from creating new revenue by authorizing a Chicago casino and legalizing cannabis, to establishing a $45 billion capital program and passing pro-business reforms championed by Republican House Minority Leader Jim Durkin. Pritzker also got a General Fund budget passed on his first try, with bipartisan support to boot. Whether or not you'd favor any one or more of these initiatives, you have to acknowledge it's somewhat remarkable for a rookie governor to have so many legislative successes right out of the box.
More remarkable, however, is the penchant Pritzker's administration has demonstrated for using political capital to raise new revenue to both support expenditures on current services and start reducing the long-term, structural deficit in Illinois' General Fund. And while raising the revenue needed to fund services and pay past due bills may seem like common sense, it's anything but common practice politically.
The reason for this is the voting public's traditional schizophrenia about fiscal policy. On the one hand folks want and demand public services. On the other, they oppose raising the tax revenue needed to fund them.
This paradox has engendered much political pandering, as decision-makers promise voters they can have quality schools, access to health care, safe streets and vulnerable populations cared for without paying the freight in taxes. Not by the Pritzker Administration, however, which has supplemented pandering with a nod to reality by emphasizing the need to raise adequate revenue to cover current costs and sustainably address structural fiscal problems.
Still, don't significant spending cuts have to be part of any comprehensive plan to resolve structural fiscal issues? Generally speaking, yes. But the truth is Illinois has been disinvesting in core services for decades. For instance, Pritzker's first General Fund budget calls for $27.1 billion in total spending on current services, over 96 percent of which will go to education, health care, social services and public safety. After adjusting for inflation, that's $4.5 billion or 14.4 percent less than what actual General Fund spending was two decades ago in FY2000, under Republican Gov. George Ryan.
The consequences of this long-term disinvestment vary by service area. Here's one example: General Fund spending on higher education this year will be 48.75 percent less in real terms than in 2000.
That cut is so significant it's helped push the rate of growth for public tuition in Illinois over this time period past the national average by some 53 percentage points. So, it should be no surprise many of our high school grads are leaving Illinois for college.
And that's just one consequence. Real spending is also down from FY2000 levels on: human services by 22.6 percent, health care by 13.9 percent and public safety by 16.8 percent. Real spending on K-12 funding is scheduled to be $651 million higher in the current fiscal year than at the dawn of this century.
That's the good news. The bad news is overall K-12 funding in Illinois is some still $7.3 billion less than what the evidence indicates is needed to have an adequate public education system.
All of which means the Pritzker Administration shouldn't be putting material cuts on the table now, because funding for core services has already been reduced so significantly in real terms over the last 20 years. Indeed, Illinois has reached the point where the fiscal focus should shift from spending cuts, to generating the tax revenue needed to fund an adequate level of public services -- a reality the Pritzker Administration is showing the rare political will to recognize.
Ralph Martire, email@example.com, is executive director of the Center for Tax and Budget Accountability, a bipartisan fiscal policy think tank.