By: Ted Dabrowski, Mark Glennon and John Klingner
What’s happening today is unprecedented. The Coronavirus is impacting Illinoisans’ lives in more ways than can be counted. We wish our readers the best and hope you all remain healthy.
Like many of you who call Illinois home, Wirepoints is monitoring the virus’ impact on the state’s residents, its economy and its overall finances. We’re worried about how job losses will jump, output will shrink and the state’s budget hole will crater. If we were concerned about Illinois’ solvency before the virus, we’re even more so today.
The big challenge for Wirepoints is how to report on Illinois’ structural problems now that they’re all wrapped up in the broader national crisis. After all, everybody across the country is taking a hit, not just Illinoisans. And we don’t want to be insensitive about the difficult decisions that our state and local leaders face.
However, Wirepoints still has a duty to report what’s happening in Illinois. It’s our mission to help turn this state around. At some point, the worst of the Coronavirus will pass and Illinois’ old problems – in Rockford, in Harvey, in Palos Heights, in East St. Louis, in Peoria, in Danville and hundreds more places – will have to be tackled.
And if the bad conditions persist, those problems will be far worse. Moody’s expects pension debts across the country to rise by as much as 40 to 50 percent if the market collapse continues. Many of Illinois’ already-sick pension plans will suffer irreparable damage. COGFA, the state budget cruncher, says state revenue losses could total as much as $8 billion over time. And home values can be expected to fall, making Illinois’ effective property tax rates even more outrageous.
Without sweeping reforms, the day of reckoning that was already inevitable will become far worse. (Illinois is long past the definition of insolvency, as we’ve said before.)
The Coronavirus is a terrible crisis that threatens everyone, but the silver lining for many will be the clarity that only structural solutions can fix Illinois’ problems; that a pension amendment is the only way, aside from bankruptcy, to reduce the massive retirement debts that are strangling Illinois households; that rolling back collective bargaining laws is essential to cutting the state’s unaffordable property taxes; and that consolidation of Illinois’ overlapping and duplicative 7,000 units of government is key to eliminating corruption and bloat.
Most importantly, it will become crystal clear that the progressive income tax will do additional harm to recovering families and small businesses.
The solution sets Wirepoints talked about before the crisis, often dismissed as not politically feasible, will suddenly be considered possible. That will make our work all the more important.
Wirepoints has said from its start that only a devastating shock would trigger genuine reform in Illinois. If the Coronavirus tragedy is to have any bright side, it will be as the catalyst that reverses Illinois’ downward spiral and eventually turns Illinois into the destination state it should be.
In the coming weeks and months, look for Wirepoints to publish the solutions Illinois must enact after this crisis has finally subsided.