By Ben VanMetre
Imagine you earn $34,000 a year. You have more than $9,000 in credit card debt and an awful credit score.
Recognizing your fiscal mess, you meet your financial advisor and say you’re finally going to buckle down and cut your spending — to only $37,000 this year.
This, of course, sounds crazy, considering your purported buckling down is $3,000 more than you have to spend.
But change thousands to billions, and this is exactly how the Illinois state government has been “limiting” its spending in recent years.
Having just gone through tax season, most Illinoisans are well aware of the hurt caused by the $7 billion state income tax increase of 2011.
But few people realize the truth behind the spending limit that was enacted at the same time — it’s a fake.
Democratic leaders paired the 2011 state income tax increase with a spending limit in order to don a cloak of fiscal responsibility.
In describing the measure, House Majority Leader Barbara Flynn Currie, D-Chicago, said “You’re talking about a shoe that is definitely going to pinch.” But that’s far from the truth.
The spending limit was more like putting a size 13 shoe on someone who wears a size 6.
Case in point: Budget season is underway in Springfield. This year, the state is anticipating about $34 billion in revenue.
But the spending limit is $37.5 billion — $3 billion more than the state will have to spend. Incredibly, next year’s “limit” is more than $5 billion higher than the state’s expected revenues.
Spending limits are a basic tool of responsible budgeting.
They’re supposed to cap the amount of money that a state government can spend each year to encourage government to live within its means.
But Illinois’ spendthrift politicians purposefully set the bar too high so they never would trigger a tax rebate provision meant to protect taxpayers from overspending. The end result? Money keeps going out faster than it comes in, and the state’s bill backlog grows.
This charade should be a lesson to everyone — passing fake reforms just perpetuates Illinois’ crisis.
Then again, perhaps we should not be surprised. We’ve gotten next to nothing out of the political class in recent years by way of transformative changes. Politicians are still dithering on pension benefit reforms even though Illinois has the worst pension crisis in the nation.