Following the passage of a record tax hike earlier this year, politicians from both parties promised fiscal austerity. As some would tell it, they’ve delivered on that promise by passing a budget containing cuts.
But the truth is they have not delivered on that promise. At least not yet.
Our analysis shows how – contrary to promises and reports of a leaner budget – the plan passed by the General Assembly amounts to a significant spending increase compared to last year. This budget will lead to billions in new deficit spending over the coming decade, while setting the stage for extending the tax increases. It cannot stand. To learn more about this, watch this video of highlights from our press conference yesterday:
Bottom line: Spending is still too high. The credibility of politicians who promised an end to tax-and-spend habits and gimmickry is on the line. Additional reductions must be made, and they must be made now.
Call your state legislator today, and let them know what you think about unchecked spending growth.
Kristina Rasmussen
Executive Vice President
Illinois Policy Institute
Fast Facts from “Budget FAIL: Plan awaiting Gov. Quinn’s signature grows spending, debt”
The proposed budget for fiscal year 2012 will increase state spending by 2 percent.
- The fiscal year 2011 budget was $33.5 billion.
- Lawmakers claim they have exercised fiscal restraint and passed a $33.2 billion budget for fiscal year 2012. That is not the case.
- A closer inspection shows that real costs in 2012 will be $34.2 billion. This represents a 2 percent increase over fiscal year 2011, or more than $1 billion more than what lawmakers said they would spend.
Why does the budget look smaller than it really is?
- An accounting gimmick was used to hide more than $1 billion in spending.
- How? The General Assembly extended the amount of time the state is permitted to wait before paying bills for certain medical assistance and nursing home programs.
- This is the same as charging $20 to your credit card, paying off $15 when the bill arrives and then saying you trimmed expenses!
What’s so bad about this? Haven’t agencies already had enough cut from their budgets?
- Under this budget, future spending could lead to a cumulative deficit of more than $25 billion by the end of the decade.
- This budget will continue Illinois on a path of financial ruin, and will ultimately result in higher taxes, more severe service cuts, and a continued exodus of people and jobs from Illinois.
- Setting up a sustainable budget now can lead to an early repeal of the tax hikes on job creators, which is welcome news for the out-of-work and underemployed.
Lawmakers will return to Springfield on Wednesday. Legislators truly dedicated to a sunset of the tax increase and the promise of fiscal austerity will demand additional spending reductions and strong policy reforms that will put Illinois on the path to solvency.