Fish or cut bait. That phrase comes readily to mind every year at just about this time.
With the scheduled end of the spring legislative session mere weeks away, lawmakers, and the governor, face some of the toughest fiscal choices in recent memory. State revenues are sinking, expenses rising. And the fall election is visible already on a not-so-distant shore. By the end of May, they’ll need to find some way to patch a $1.3 billion hole, maybe bigger, in Gov. George Ryan’s budget for the coming year. It won’t be easy.
As Charles Wheeler puts it in this month’s Politics column, for most legislators, “it’s the most daunting challenge of their public lives; they must choose between slashing vital services, or raising taxes to avoid some or all of the most draconian cuts.” (See page 42.)
And just when the waters seemed plenty rough, the state got another storm warning: Lawmakers and the governor must contend with fiscal fallout from a newly minted federal economic stimulus plan, a corporate tax-break program that threatens to capsize state and local budgets.
As Anthony Man explains in his piece beginning on page 24, the Illinois corporate income tax is linked to federal taxable income. If businesses pay less to the federal government, they pay less to state government.
“It’s a big hit,” Illinois budget chief Stephen Schnorf tells Man. The state Department of Revenue estimates a $216 million reduction and a three-year loss topping $590 million.
But municipalities and school districts will lose, too. In part, that’s a function of the way the state distributes tax dollars to local governments; in part, that’s due to a resulting decline in proceeds from the state’s corporate personal property replacement tax, which is distributed among local governments.
All of this puts increasing practical and political pressures on lawmakers.
There’s more. The cost of terrorism hits home, too. Aaron Chambers, our Statehouse bureau chief, reports that state government and local governments from Chicago to Fairview Heights are building an expansive network to combat potential attacks. How far they go depends on money.
Though the federal government has provided financial assistance, and is likely to provide more, it will take a lot of dollars to train and outfit the police, firefighters and medical technicians who will be first on the scene should any attack occur. Read his story beginning on page 14.
And see Terry Farmer’s photographs of the Springfield Fire Department on our cover, and inside accompanying Chambers’ story. While New York City is a long way from our capital city, Springfield firefighters represent some of the folks government calls “first responders” — and we would call heroes, should they have to fulfill their responsibilities under extraordinary circumstances.
In fact, there are many such worthy claims on the state’s declining bank account. We outline two others this month: the state’s lower-income elderly and its children.
Maura Webber reports that drug prices are rising along with the number of seniors who are 65 and older. Illinois has established itself as a leader in efforts to bridge that gap, but there are risks. Critics charge the cost will be disproportionately borne by phar- macies. Her piece begins on page 20.
And Kristy Eckert highlights a continuing spending gap between rich and poor school districts. That issue is likely to come up again this spring. Eckert, beginning on page 22, cites school finance experts who argue that “the only way to meaningfully improve the way the state funds schools is to spend more money.” Yet Ryan’s budget plan would spend less on schools than estimated spending for the current year.
While politicians are looking for a way out of these budget dilemmas, Wheeler is looking for statesmen. He’s hoping policy-makers find the courage to raise the revenue required to fill that budget hole — including an increase in the state income tax. “The mechanics,” he writes, “aren’t the difficult part — it’s the political will.”
Illinois Issues, May 2002
