Brady living in a dream
world
Republican
state Sen. Bill Brady kicked off his new gubernatorial campaign the other day
by claiming that Illinois’ horrific budget deficit can be “managed.” But a new
report by the governor’s office makes that claim even less realistic than it
already was.
As you
already know, Democratic Comptroller Dan Hynes has estimated the state’s budget
deficit could reach $9 billion next fiscal year, not including aid from the
federal stimulus package. We can toss those numbers out the window now, but
this is all Brady had to go on when he announced his campaign, so let’s look at
it anyway.
Brady told
WGN-AM (720) the day before his official campaign kickoff that the budget
deficit was about $4 billion to $5 billion “on an annual basis.” That’s pretty
much exactly what Comptroller Hynes projected. Hynes included $4 billion or so
in unpaid bills from this fiscal year in his $9 billion deficit projection for
next fiscal year, which begins July 1.
But Brady
insisted the budget deficit could be managed. “The first thing we need to do is
to deal with that $4 billion to $5 billion deficit. And you can manage that.
When you’ve got a $53-plus billion budget, you need to manage it,” he said.
Brady did
the math and concluded the state budget broke down to $4,000 for every man, woman
and child in Illinois. “If the people who are elected into office can’t balance
a budget taking $4,000 from every man, woman and child, then maybe we ought to
find someone who can,” Brady said.
What he
didn’t say, of course, was that the $53 billion budget figure he cited was for
all funds, including federal funds. The state’s operating budget — the part
that Illinois government actually controls — is about $28 billion. Health care
programs and education spending account for all but $3 billion of that total.
So, there’s really no way to “manage” the state out of even a $4 billion
deficit without big slashes in spending for schools and Medicaid recipients and
providers.
Most
importantly, there are about 100 days or so remaining in the current fiscal
year, which ends June 30. So getting ourselves out of this fiscal year’s
deficit crisis with the game almost over would require unimaginable cuts. As
I’ve written elsewhere, you’d essentially have to shut the government down.
Brady also
claimed Illinois could pay for a capital construction program without raising
taxes, such as the motor fuel tax, a proposal made by some legislative
Democrats. He’d do this by stopping all transfers from the state’s road fund,
which he says is over $1 billion a year.
That’s mostly
true. But reversing those road fund transfers means the state would have to
either eliminate or slash programs paid for by the road fund, which includes
the State Police, or blow a billion dollar hole in the rest of the state
budget. The problem, in other words, would be worse.
And here’s
where it gets worse.
Much worse.
The
governor’s office is now estimating the combined state budget deficit to be
$11.5 billion. Income and sales taxes are crashing, to the tune of more than $3
billion. Medicaid costs, employee wages and benefits, including pension costs,
are skyrocketing.
In short,
it’s a horror show.
But if we
can’t cut our way out of this mess, we certainly can’t fully tax our way out of
it, either.
Gov. Pat
Quinn wants to make the income tax burden as “progressive” as possible, so as
of this writing Quinn’s tax hike plan is expected to avoid taxing anyone at all
under the federal poverty line. Plus, nobody making less than $57,000 a year
would see any income tax hike.
So even
though the governor wants to raise the income tax by 1.5 percentage points,
which is a 50 percent increase, he won’t get nearly the sort of revenue that an
across-the-board hike would give him. That means cuts, and some of them will be
painful.
There are
other innovative ways to help balance the budget that don’t involve painful
cuts or tax increases. But none of those ideas gets you to $11.5 billion. Not
even close.
Forget about
the political rhetoric and get ready to pay more for less.
Rich Miller also publishes Capitol Fax, a
daily political newsletter, and thecapitolfaxblog.com.