R. Eden Martin: Incredible that it's business -- and politics -- as usual

By R. Eden Martin

David Vaught, Gov. Pat Quinn's budget director, told Bloomberg News
last week that the governor, if re-elected, would seek to increase the
state income tax on personal income from 3 percent to 5 percent next
January.

The campaign of his Republican opponent, state Sen. Bill Brady,
immediately jumped on this story, commenting that if a tax increase were
passed before Brady takes office (if he wins), Brady would "work to
roll it back." U.S. Senate-candidate Mark Kirk issued his own release
opposing any tax increase, even though it's a state issue, not a federal
one. Then, Quinn said he was only for a 1 percent increase.

Here we are -- only a bit more than three months before the November
election -- and our state is slipping into fiscal chaos, as are many
municipalities. We have a real annual state budget deficit on the order
of $14 billion to $15 billion. The state can't pay its bills. Everybody
is owed money -- our universities, our schools, our social service
agencies, the state's suppliers. Unfunded retirement-related liabilities
associated with the state's public employees continue to mount.

Yet there is no sense of urgency. The General Assembly has not been
called into special session to deal with this emergency. We'll continue
to run up bills and borrow until after the election, or maybe next
spring, and then maybe we'll deal with it -- or maybe we won't. Business
as usual.

And politics as usual. Some folks think the state's budget deficit
should be fixed entirely with a tax increase. They don't mention pension
reforms or cost-cutting. Others think it should be fixed entirely by
cutting costs -- or more borrowing. Some candidates see it as an
opportunity either to curry favor with particular constituencies or to
tie the albatross of blame around somebody else's neck. But most see it
as something not to talk about. No point in making folks needlessly
upset. Cuts would hurt somebody. A tax increase would hurt anybody with
income. Maybe the problem will somehow disappear.

If ever there were a time for a different approach -- for a bipartisan
solution, for reaching across the aisle, for suspending the blame game
and putting away the hatchets for a few weeks -- it is right now.

Everybody has an interest in getting this cistern cleaned up. Business
has a strong interest -- since failure to stop the borrowing will bring
the state to its knees. Without reforms and cuts, taxes will eventually
go up a lot more than Quinn's budget director is signaling. Investments
and jobs will leave the state.

Labor has an even stronger interest. The pensions must be reformed and
funding has to get fixed. If a pension fund goes broke, who will pay the
pensions? The worker's contract claim is against the pension fund -- not
the state. Moreover, the state's sovereign immunity protects it from
all but the smallest claims. Normal creditors' rights aren't available.

Are state employees going to keep mindlessly making their contributions
into funds that won't have the money for their pensions when the time
comes?

Is it delusional to think that in such an emergency -- when so much is
at stake -- the party leaders might put away their knives long enough to
come together and balance the budget? Is it fantasy to think that voters
might be mad enough to blame any leader, in any party, who won't make
the effort? Or that voters might (as in New Jersey) be relieved to have
some statewide leader tell them the unvarnished truth?

A great American at the time of the revolution said that, "We must all hang together or ... we shall all hang separately."
We have a monumentally serious emergency in Illinois today. If we don't
hang together -- and try to fix it together -- we'll all sink together
into the state's fiscal quagmire.

And blame will cease to be relevant -- except to the historians.

R. Eden Martin is president of the Civic Committee of The Commercial
Club of Chicago and a member of the nonpartisan Illinois is Broke public-education campaign, www.IllinoisisBroke.com.

Leave a comment