Politics: It’s budget crunch time. Is there a statesman in Illinois government?

May 1, 2002

Charles N. Wheeler III
Credit WUIS/Illinois Issues

Is there a statesman in the House? The Senate? The Executive Mansion? Anywhere in state government?

As the Illinois General Assembly moves into the final month of the spring session, it seems fitting to pose a question — albeit rhetorical — about the quality of leadership in Springfield.

The paramount task for lawmakers in the coming weeks is closing a $1.3 billion — perhaps greater — hole in the budget Gov. George Ryan proposed for the fiscal year starting July 1. For most, 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.

Yet heading into crunch time, political courage appeared in almost as short supply as dollars in the treasury. Moreover, to win leadership laurels in Illinois, history has set the bar rather high. Consider, for example, the mettle shown by state leaders in two earlier crises when revenue scarcities jeopardized the state’s commitment to important programs:

• In 1969, newly elected Gov. Richard Ogilvie proposed the state’s first income tax, in part to deal with a $1.1 billion gap between spending and revenue.

“Illinois simply cannot afford to cut back essential services,” he said, citing as well a need to increase outlays for education and welfare. “We must have a new revenue source. ... I have no choice but to recommend the General Assembly impose an income tax on persons and corporations alike.”

Although the Republican governor proposed a uniform rate of 4 percent on individuals and corporations, the final compromise set the individual rate at 2.5 percent and the corporate rate at 4 percent, where they stayed for 14 years.

A decade after the income tax became a major factor in his 1972 defeat for a second term, Ogilvie told an interviewer: “It was something I had to do. ... I was elected to be governor, and I was going to govern and not just occupy the office.”

• In 1983, Gov. James R. Thompson in his seventh State of the State address called for the first increase in income tax rates since the tax was enacted.

“I believe that we can no longer save and cut, stretch and borrow, nor put off until tomorrow the pressing human needs of today,” he told a joint session of the legislature. 

“The same cruel recession which has been punishing so many citizens has taken its toll on the ability of your state government to maintain a standard of decency in the delivery of some human services, a standard of excellence in education, and a new standard of achievement in economic development.”Thompson called

for hiking the individual rate to 4 percent and the corporate rate to 5.6 percent. After much bargaining, the legislature passed and the governor signed an 18-month, 20 percent rate increase for both individual and corporate taxpayers, as the key part of a larger revenue restructuring plan.

In both instances, Ogilvie and Thompson chose to be statesmen, making the tough decision to raise taxes because their convictions told them it was the right thing to do.

So far this spring, however, neither Ryan nor any of the four legislative leaders are ready to be measured for a similar hero’s cape. Publicly, they seem intent on balancing the budget simply by cutting spending. Privately, one would hope, they realize that can’t be accomplished without devastating myriad programs intended to help the state’s most vulnerable citizens, from in-home care for feeble seniors to prenatal care for welfare moms.

Indeed, one line of speculation holds that the budget-cutting is merely an academic exercise, intended to show in searing detail why the state can’t slash its way out of the fiscal morass. Then, the theory goes, the governor and the leaders will agree on limited tax hikes — perhaps on riverboats or cigarettes — to avert some of the more severe cuts.

That may well be the game plan, but such a timid response merits no plaudits and ill serves the state’s needs. If current leaders hope to be mentioned in the same breath as Ogilvie and Thompson, they should be as bold in addressing the problem. Indeed, one could argue the state’s finances are worse today than they were in 1969 or in 1983, if for no other reason than revenues this fiscal year are likely to be less than receipts a year ago — the first year-to-year dropoff in almost half a century.

Under such circumstances, the best response is neither deep cuts in spending nor modest tax hikes. What’s really needed, as it was in 1969 and in 1983, is an increase in income tax rates. Raising rates 17 percent — to 3.5 percent for individuals and 5.6 percent for corporations — would bring in another $1.4 billion, according to the state Department of Revenue, more than enough to close the existing gap and preserve vital services. The burden could be eased on lower-income taxpayers by raising the $2,000 personal exemption.

Moreover, the increase could be made temporary, perhaps for a couple of years, until state coffers benefit from economic recovery. Then, taxes could be raised on riverboats or cigarettes as income tax rates go down, to avert any sharp revenue dropoff. The mechanics aren’t the difficult part — it’s the political will.

And, yes, unlike the post-election tax increases of 1969 and 1983, any hike this spring will precede the November election. Given the timing, the knee-jerk reaction is to say “no way.” But Ryan is not seeking another term, and as of March 20, 44 senators and 72 representatives had no Nov-ember worries, either. Some are lame ducks, either primary losers or retirees, but most are running unopposed.

If majorities can’t be found from this pool of potential “yes” voters, the state’s budget woes will be far eclipsed by a glaring absence of political backbone among its purported leaders. 

 

 

Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois at Springfield.

Illinois Issues, May 2002