By: Mark Glennon*
It comes down to a single question in Illinois. Everybody with an opinion about the financial mess should be forced to try to answer: What conceivable combination of tax increases and spending cuts would solve Illinois’ state and local fiscal crises without drastic reforms including cuts in pension benefits and an agenda that grows the tax base?
There is none. For three years we’ve linked here to every significant article, report and analysis we can find, from all sides. None has come remotely close to suggesting an answer. We’ve defied critics in the comments on this site to put up an answer. They can’t. There is no answer.
It doesn’t matter what’s fair. It doesn’t matter who gets hurt or what promises get broken. It doesn’t matter what party you’re in or what obligations you think government should have. Those things matter when it comes to designing solutions, but they don’t bear on the question, which is just math.
And it is just the math. Restore the temporary tax increase as Speaker Madigan suggested on Wednesday. Impose the “millionaires tax.” Expand the sales tax. Make the income tax progressive. Raise property taxes. Let municipalities nickel and dime whatever they can. Throw in whatever else you want to try to answer the question. Then give some realistic estimate of new revenue all that would yield. It still wouldn’t be enough. Give some unrealistically high answer and it will be clear to all that Illinois would be taxed into a ghost state if it was tried.
Put the question to any politician. I have, with many, including much of the General Assembly leadership. They have no answer. It’s exactly why Speaker Madigan was so evasive Wednesday about what tax increases would be needed beyond restoration of the temporary increase that expired this year. That increase is just “a place to begin,” and that’s all he’d say. If all officeholders could be forced to answer the question we’d at least have enough common ground to hope for a negotiated settlement.
It’s because local governments are mostly in worse shape than the state that the question can’t be answered. For many of them, the train wreck has already occurred — ever higher property taxes imposed on declining market values have sparked a death spiral that already has doomed many communities, including most of Chicago’s south suburbs, as we wrote recently. Dozens of Illinois towns and cities should be in a bankruptcy proceeding now. Most importantly, it’s more clear each day that bankruptcy may be unavoidable for Chicago. The question demands a comprehensive answer that covers both state and local problems.
And pensions are central to why the question cannot be answered. Whether through bankruptcy, constitutional amendment or simply by default, unfunded pension liabilities cannot be paid in full — earned benefits must be cut. The math won’t work otherwise.
The plain reality is that our model of government is broken. We simply aren’t generating the jobs, growth and revenue needed to meet the promises made. Deal with it.
Enough of the piecemeal solutions endlessly offered. Whether it’s Cook County’s sales tax increase, Chicago’s property tax increase or Illinois’ income tax increase, sponsors of those things will never attempt a comprehensive answer to that single, overriding question. Just patch it over a bit for their unit of government. That’s good enough for them.
Reform opponents, save the lectures about the moral superiority of your viewpoint for the form that comprehensive reform should take. Include tax increases if you want (that’s inevitable). But say nothing until you stipulate that no conceivable combination of tax increases can solve Illinois’ state and local fiscal crises without drastic reforms including cuts in pension benefits and a pro-growth agenda.
Or put up your numbers showing otherwise. It’s just the math. If you can’t, go away.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.