Citizens and inhabitants of Illinois, it is time to grow up!
The state has not had a budget for over two years. It is time to grow up!
We have over fifteen billion dollars of unpaid bills. It is time to grow up!
We have underfunded our state retirement system by a quarter of a trillion dollars. It is time to grow up!
Representatives for decades have passed the buck of wrong financial decision down to the next generation, over and over again. It is time to grow up! It is time for us all to start adulting.
Over the course of the last my life, I have studied financial literacy and general economics. All the authors have offered the same basic advice for getting out of financial trouble. And Illinois is in a giant hole of financial trouble. Dave Ramsey, Robert Kiyosaki, Laura Langmeyer, and others all say you need to do two things to get out of debt: 1) cut expenses 2) make more money. It is the adult thing to do. There are four major steps that I feel will help get Illinois out of this crisis and start us along the path of adulthood and get us to grow up.
Cut spending and find donors to support social safety net programs: Every family, and government, that is serious about trimming their budget to balance it out should look at any spending that can be cut. This includes big things and little things, hatches and scalpels. The hatchets are things that either program that is no longer necessary, appropriate, or inefficient. The scalpels are the actions that can be taken to trim the fat a little bit more in a lot of areas. Like pricing out cheaper entertainment options, going for a hair cut every twelve weeks instead of six, etc. In this cutting though you need to make sure the core necessities are met, safety, security, and providing for the future. These are the principles in mind when cutting the budget.
We need to ask ourselves the hard question. What exactly is the job and responsibility of the state? If a program does not fall into that job or responsibility: cut it. One example, and this does not mean it should be cut, battered women shelters. Is it really the job or responsibility of the state to ensure that women and children have safe havens from abuse? It is a good program and worth of money, but should the state pay for it? That is the question we need to ask about the sacred cows and third rails of government spending.
To alleviate some of the spendings that the state does on an annual basis, it would be endorsed by the governor to auction off some of the state spendings for charitable tax credits to businesses and individuals. Social welfare programs are usually very cheap in the short and long run. With the approval of the legislature, certain social safety net programs would be funded completely through charitable donations. Those wealthy individuals and corporations that donate to the cause will have not be taxed on the grand total of all the money they donated to that cause. They can each pick their cause to support.
The one sacred cow that would not be cut: education. It is the primary job of the state to ensure that its citizens are educated at a fundamental level of knowledge and skills. If anything the budget would be increased in this area to ensure that the state provided an equal amount of money for each student in its K-12 schools.
Find new sources of revenue: After all the fat has been trimmed off the budget, and a selection of social services funded by private groups and individuals, new ways to bring in money may have to be explored. A tax on the recreational use of marijuana would be one place to start. Raising the income tax may be a second position to go. Creating a progressive tax structure would be one option to explore. It also might be worth exploring to restructure the revenue system of the state altogether and go to a straight sales tax only, excluding tax on basic food, clothing, and shelter.
Renegotiating and restructuring Illinois state worker pension programs: There are also structural issues that need addressing in our budget for the long-term financial stability of the state’s financial situation. Every state in the Union and even the federal government needs to restructure its pension and welfare programs. Any restructuring needs to ensure those that are currently in the system or soon to go on the system will not be negatively affected. The basic premise would be to change the pension system from a defined benefit (Old school company pension plans) to a defined contribution system (modern 401K and IRA plans). The employee would contribute a particular amount that would be matched by the state up to a certain percentage. The money would be in the hands of the employee to manage.
The goal of these three reforms is to create a predictable and reliable a budget surplus. This excess ensures that Illinois is not just paying its current bills, but paying off its debt, and as fast as possible.
Amending the Illinois Constitution: The people of the state need to make sure the state never goes down this path again. To that end there the Illinois Constitution will be amended that are ways to protect us from this in the future. First, the amendment would not allow any budget to be unbalanced. Budgets must be zeroed out with cuts and/or new taxes, every year. Secondly, no other state legislative business can be carried out until the balanced budget is passed and signed by the governor. Thirdly, no state legislator will be given any pay until the budget is approved. Lastly, if the legislature fails to pass a balanced budget by the end of their session, they will either stay in session until it is completed or they will all be removed from office and new elections to be held within ninety days to elect new representatives to meet in emergency session until a budget is passed.
These are the reforms I suggest for us citizens and inhabitants of Illinois to encourage from our elected representatives. These problems go far back in our history, but its time to grow up and fix them so that we can be a better place live for ourselves and for our children.
Thanks for listening. Questions? Comments? Concerns? Class dismissed!
“The Costs and Consequences of Illinois’ Budget Impasse.” Reboot Illinois. Reboot Illinois, 29 June 2017. Web. 05 July 2017 (Article that puts real numbers into the budget crisis).
Egan, Matt. “How Illinois Became America’s Most Messed-up State.” CNN Money. Cable News Network, 1 July 2017. Web. 5 July 2017 (Source for basic numbers about the budget crisis in Illinois).
A Message to All Illinoisans about the Budget Crisis. Perf. Susan Mendoza. YouTube. Illinois Comptroller, 28 June 2017. Web. 5 July 2017 (Video of Illinois Comptroller on the Buget crisis).
Roseberry, Krissy. “IPHA Continues to Work With Agencies Across Illinois to Address Budget Crisis.” Illinois Public Health Association. IPHA, 08 Feb. 2016. Web. 05 July 2017 (Source of article’s featured image).
Steps to Fixing Illinois’ Budget Crisis. Perf. Dan Mitchell. Fox News Business. Fox News Network, 5 July 2017. Web. 5 July 2017. (Video used as source of solutions to the problem.).