Explaining the Budget "Battle"; What I Would Do as Governor

Confused by the wrangling over the state budget in Springfield?

Let me tell you what’s really going on. What appears to be a very public budget dispute among Illinois’ governing elites is actually violent agreement of what should be done: tax increases and temporary, symbolic reductions in the rate of spending, with no structural changes.

In other words, general agreement on the wrong policies.

The only disagreement is over who will “wear the jacket” for the tax increase. Whatever happened to Governor Quinn’s declaration, only a few days ago, that anything less than a 6.5% increase over FY 2009 budget levels would result in an “Escape From New York” dystopia overnight? Today, apparently, the situation is not so dire that the governor would risk his political career over it. Never has the phrase “desperate, but not serious” been so appropriate. Don’t believe him, or any other state politician, next time they stand at the prison gates threatening to swing open the doors unless you cough up some more dough.

Any plan that is based on higher taxes and only marginal changes in spending habits will keep those who can afford to stay in Illinois treading on the same hamster wheel we’ve been on for the last decade.

When asked how he went broke, a character in Ernest Hemingway’s The Sun Also Rises replied, “Gradually, then suddenly.” We’ve been going broke for years, and now suddenly, “suddenly” has arrived. Neither the Governor nor the Assembly has the guts to face the problem, be straight with the public, and take necessary action.

Let me do what they will not. Here goes:

The problem in Illinois is not a temporary shortfall in revenue, or even a chronic lack of revenue. It is a systemic spending problem that cannot be solved absent a comprehensive and coherent examination of what our government should do, and what it should not do. It demands a complete restructuring of our major public sector systems and, ultimately, statutory caps on spending.

What we must do, and what Governor Quinn and the Chicago 9 will not do, is to be truthful about the nature of the problem and the characteristics of any solution. These characteristics are:

Align government interest with private interest.
Our government sector cannibalizes the private sector and has destroyed initiative and industry. This must end. A Proft Administration would introduce this principle at the top by requiring all members of the General Assembly to feel the brunt of their destructive economic policies.

  • State legislators’ salaries will be tied to the median household income for an Illinois family;
  • Their salaries can only increase when the state’s median household income increases and by no more than that increase;
  • Pension reform begins with legislators having their pensions capped after four years of service. In addition, these pensions should be payable in the currency they have most control over: Illinois general obligation bonds;
  • State employees should work 40 hours per week to qualify as a full-time employee, not the current 37.5.

Restructure Government At the Foundation. We can no longer tolerate systems whose main objective is to provide secure jobs and guaranteed pensions to public sector unions in exchange for their political support of the status quo.

Two of the largest cost centers in government are Medicaid and education. Medicaid can be provided more cost-effectively through managed care. Our health-care infrastructure should not be decided by some Star Chamber of gubernatorial appointees but by medical professionals looking to meet market demands.  This means eliminating the corrupt Health Facilities Planning Board, not simply renaming it as Quinn has proposed.

If we get K-12 education right, many of our other social and budgetary problems become much easier to address. Educated young people with jobs become contributors to the economic engine, not burdens on it. Parents in failing school districts need to be empowered with choice. A Proft Administration will invest in children, not education bureaucracies.

Focus on the Core Mission. Let’s get the big-ticket systems right—K-12, Medicaid, transportation—and get out of areas where government does not belong and has no core competency. The state should immediately exit activities such as real estate management and gambling. Permanently.

In order to achieve these medium-term savings and efficiencies, we need to survive the present.

Stop Digging! Address the structural debt that is killing our bond rating and driving business from the state. We will stop spending more than we collect and we will not be tempted into short-term borrowing, which is nothing more than a back-door tax increase.

Pension reform begins with an immediate end to double-dipping. It is time to force the large unions like AFSCME and SEIU to the table for an adult conversation about untenable obligations of their contracts which make government more expensive and less flexible than it needs to be.

We will roll back state spending back to at least 2008 levels, which would be a $3 billion reduction from the get-go, and seek waivers to use federal stimulus money (which is Illinois taxpayer money anyway) for breathing room while we overhaul moribund state government systems.

The benefits of these measures are manifold:

  • We relieve pressure on the taxpayer during a time of recession;
  • We send the signal that Illinois is open for business and industrious people don’t have to leave;
  • The financial community understands that Illinois is a good risk as our bond ratings go up, saving us money in the short term;
  • Employment and tax revenue increase.

  • This is what it means to “Un-Fix Illinois.”

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