Spend As If It Were Your Own Money
It's irresponsible to assume that increased revenue alone and wished-for growth will close Illinois's budget gap. That requires acknowledging that significant spending cuts must be made.
The first priority for cuts must be duplication of effort, fraud, waste, mismanagement, excessive administrative costs, and spending made over-generous because of political connection, pinstripe patronage, or lack of sunshine. Unfortunately, there is no line item for "fraud and waste" in any budget; to ferret out these inefficiencies requires greater auditing going forward. To do that the offices of Comptroller, Auditor General, and/or Inspector General must be more robust and become more proactive.
State spending has increased even as headcount has been reduced. This calls into question either the rationale or the implementation of the downsizing and outsourcing that has occurred, and suggests that even fewer controls may exist over outside services. Improved auditing must target rich third-party contracts and professional fees, travel, technology purchases, and materials and overhead of capital improvement projects for highest scrutiny.
State employee pensions and compensation have been identified as prospective spending targets. "Reform" should be the watchword; the average State employee is not the villain in the irresponsibility that has led to Illinois's fiscal crisis. Historically, government benefits were higher than many private-sector equivalents to compensate public employees for lower wages and loss of career and lifetime wealth-building opportunity. Any revisitation of total compensation philosophy should be (a) evidence-based, in public, (b) holistic rather than focused on any one aspect, and (c) negotiated rather than dictated. However, we have to bear in mind that the essence of public service means that government works for the people, not the other way around.
Some efficiencies are available through Medicaid consolidation. However, these are not unlimited, and Medicaid should not be made the bogeyman for the state's fiscal problems. At most approximately $500 million annually could be saved through Medicaid reform.
Curtailing health services availability can have offsetting consequences for individuals and small businesses that, in turn, hurt the Illinois budget. There is no immediate reason to believe that a mandatory move to managed care would fare any better than the attempt that failed in the 1990s. IllinoisHealthConnect should be given a chance to work, and meanwhile the state should look to maximize federal matching dollars. One way to address unnecessary utilization is through a focus on wellness.
Other measures we can look at:
- Reduce/limit tax loopholes and incentives/credits that (after quantification) lack proven payback to the state
- Rein in member initiatives ("earmarks")
- TIF reform for better utilization of revenues by local governments, and to provide tax relief to property-owners
- Termination or consolidation of redundant special funds, re-directing revenue to General Revenue
- Program restructuring where utilization is extremely low
- Shifting capital budget items to general fund where annual costs are steady, to reduce bonding and interest expense
- Reducing overtime, even if it means adding positions
- Encouragement of local government consolidation where efficient
The overall key is to return to an ethos of public trusteeship. The State does not print money. All it has derives from the people, and is held, collected, administered, and spent in trust for the people of Illinois. Therefore there is a duty of stewardship, to spend wisely and ethically. We need to restore a sense of public purpose, in order to regain the confidence of the public.
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