“I love the smell of napalm in the morning” is a great movie line. It’s not so good if you are talking about the state budget. A new report forecasting economic doom – a $14 billion annual deficit by fiscal year 2026 is called Apocalypse Now? Solutions won’t be easy, since so much of what the state must pay is for is due to past decisions.
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“The political salability, or acceptability, of it is very hard to project,” says professor Richard F. Dye, co-director of the Fiscal Futures Project at the University of Illinois’ Institute of Government and Public Affairs. “Like a person in deep credit card debt, the state has been spending more than it can afford, and is covering the gap by issuing IOUs.”
From the report:
Bringing back the 2011 tax increase would close only about one-half of the gap projected for the next several years.
The problem cannot be solved with spending cuts alone. Because Illinois can’t cut debt service or pension payments, it would take at least a 20 percent cut of all remaining spending to eliminate the deficit. This includes education, corrections, Medicaid, public safety, transportation, and more.
Economic growth is also not a cure-all: an increase in the growth rate of personal income by an extra one-half percent every year for 10 years (an optimistic scenario) would have only a modest effect on the deficit.