By the Chicago Tribune Editorial Board
July 27, 2020 -- With Congress debating
another relief package to protect the economy from the coronavirus pandemic,
state governments likely will receive federal money to offset revenue losses,
Illinois included.
Please, Washington: Don’t turn this
fifth go-round in COVID-19 aid into a bailout of poorly managed states like
ours.
Any money flowing to Illinois should
come with strings attached to ensure federal money is reserved strictly for the
purpose of addressing virus-related losses. Insist that funds coming here are
commensurate with those going to other states. Demand transparency for every
dime spent. Don’t let federal aid for a global health pandemic expand into a
rescue effort of Illinois for its decades of reckless state government
spending.
Why the training wheels for Illinois? Senate
President Don Harmon put it in writing. In April, he wrote to
members of Illinois’ congressional delegation asking for $41.6 billion in coronavirus
aid, including $10 billion for Illinois pensions. It was an outrageous request
following decades of overspending. Illinois’ credit rating is among the
nation’s worst. That “ask” had little to do with public health and everything
to do with the irresponsible habits of Illinois politicians. Don’t be fooled.
“I realize I’ve asked for a lot, but
this is an unprecedented situation, and we face the reality that there likely
will be additional, unanticipated costs that could result in future requests
for assistance,” Harmon, who has been in office since 2003, wrote in the
letter.
It quickly was panned.
Senate Majority Leader Mitch McConnell in
an April radio interview responded: “You raised yourself the
important issue of what states have done, many of them have done to themselves,
with their pension programs,” he said. “There’s not going to be any desire on
the Republican side to bail out state pensions by borrowing money from future
generations.”
He should hold firm today. Illinois
won’t learn its lesson, control spending and become fiscally sound if the
option of being “saved by Washington” exists. And remember, we’re only talking
federal taxpayer dollars vs. state. It’s all taxpayer money. It’s yours.
“Illinois is ground zero for mismanaged
pensions and offers instructive lessons on what not to do. It spends the most
in the nation on pensions as a percentage of state and local revenue
collections, about double the national average. It increased inflation-adjusted
pension spending by more than 500% since 2000. But despite this
first-in-the-nation spending, Illinois also has the worst
pension-debt-to-revenue ratio among U.S. states, according to Moody’s,” Adam
Schuster of the Illinois Policy Institute wrote earlier this
month.
Digging Illinois out of its hole should
not be the responsibility of taxpayers in Minnesota or Nevada or Texas. Ignore
the specious argument that because Illinois sends more federal
income taxes to Washington than it receives, it “deserves” more coronavirus
aid. It’s unconvincing.
If Illinois is home to more high earners
than other states, that doesn’t justify a bailout. Nothing does. Besides, state
Democrats led by Gov. J.B. Pritzker already are using the “we have lots of high
earners” argument to pursue a progressive tax structure.
Here’s our advice, and from fiscal
watchdogs, including the nonpartisan Truth in Accounting: If Congress
provides aid based on revenue losses, those should be actual, provable losses
rather than projections.
Money should be given quarterly based on
comparative revenue from the state’s previous fiscal year, evaluated from an
independent, outside group. Back up those figures with audited numbers, not
from within state government or any elected official’s office.
If Congress really wanted to help
Illinois help itself, it would tie aid to a requirement that Illinois devise a
workable plan to get its fiscal house in order. That includes pension costs,
the biggest driver of Illinois’ financial instability.
Why do we have such little faith in
Illinois pols to manage the people’s money responsibly? Because we, like you,
live here.
Since 2003, Democrats have controlled
the state legislature and failed to address rising pension unfunded
liabilities. That year, under Gov. Rod Blagojevich, Illinois borrowed $10
billion and still shorted the pension funds. Lawmakers skipped
full payments to the pension funds in 2006 and 2007, then borrowed again to
make partial pension payments in subsequent budget years.
Even after raising income taxes 67% for
four years in 2011, and after another tax hike in 2017 with GOP support, this
state’s balance sheet remains a mess. We’ll ask: How is it possible to
accumulate for more than a decade billions in unpaid bills and unfunded pension
obligations, and still leave Springfield every May claiming to have a balanced
budget?
So we have learned: Give Illinois money,
and the politicians will mismanage it.
It’s time to give state government its
own hard lesson, for the future benefit of everyone who lives and works here,
and for taxpayers around the country who shouldn’t have to pay for our
mistakes: No bailout. Lots of strings attached to any federal aid. Don’t enable
Illinois leaders with a blank check.
Editorials reflect the opinion of the
Chicago Tribune Editorial Board.
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