By: Mark Glennon
In a strong signal that crossed party lines, Illinoisans voted by a margin of 55.1% to 44.1% against a constitutional amendment that would have allowed for progressive tax increases.
Illinoisans know the state faces a massive budget hole. What do they want instead of higher taxes?
We don’t know, but we know what they should want: reforms.
Below are some of the larger reforms to pursue we have written about. Some are for the state and some are for our towns and cities because our fiscal crisis is an overlapping, consolidated matter. Most would save money directly, though some would reduce revenue, but, taken together, they would serve the goal that all Illinoisans should share: returning Illinois to fiscal stability and competitive levels of services and taxes.
- Real pension reform. Our 112-page paper details our comprehensive approach to reducing annual pension costs. It alone would provide about $4 billion in annual savings – more than the revenue supposedly raised by the progressive tax. A state constitutional amendment is essential.
- End free retiree health insurance. Nearly 75 percent of Illinois state employees also receive free health insurance in retirement. Our reform plan would provide $1 billion in annual savings going forward.
- End the estate tax. Revenue from the tax is negligible and its only real impact is encouraging flight from Illinois, further eroding the tax base.
- Authorize Chapter 9 bankruptcy for municipalities. Illinois should give municipalities that have impossible debt loads the chance for a fresh start by authorizing the option of a reorganization under the United States Bankruptcy Code, as many other states have done.
- Consolidate local governments. With nearly 7,000 local units of government, many of which are duplicative and overlapping, Illinois has by far the largest number in the nation.
- Enact a harsh cost-benefit analysis on renewable energy programs that are costing billions.
- Slash all unfunded mandates imposed by state government on local units of government.
- Reconstitute or bankrupt the Chicago Public School district.
- Eliminate social justice goals from pension and other public investing, and instead focus solely on maximizing returns.
- Eliminate the Illinois Municipal Retirement Fund’s subsidized savings account.
- Force tough, independent review of local school boards that don’t negotiate contracts properly.
- Reform Illinois’ rigged prevailing wage law.
- End securitized bond offerings. Chicago and several other municipalities have been transferring full ownership of future revenues to secure current borrowings. That amounts to a sale of body parts, providing short term cash but dooming municipalities to an asset-less future.
- Roll-back Illinois’ collective bargaining rules. As currently written, collective bargaining rules mandated by the state for itself and its municipalities mean essentially that public labor unions always win. Good faith, reasonable negotiations are impossible.
- Properly use Treasury funds. Make better use of the $18.6 billion sitting with state Treasurer’s office. From a cash management perspective, holding $12 to $16 billion indefinitely, invested short term for minimal returns, makes no sense.
- Cut pay, enact layoffs and furloughs. Illinois state workers are the 4th-highest paid in the nation, adjusted for cost-of-living.
This is not an exhaustive list. A number of other reforms, small and large, are viable. There is no shortage of worthy alternatives to higher taxes.