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St. Louis Post-Dispatch

Lee Enterprises

Saturday, February 23, 2008 1:26 AM CST
Our View: It's past time for state leaders to budget responsibly

By the JG/T-C Editorial Board
editorial@jg-tc.com

Gov. Rod Blagojevich’s proposed $58-billion-plus budget hasn’t been greeted with open arms by state legislators. The packaging may be different, but the content’s about the same.

Blagojevich appears to operate under the assumption that if he butts his head against a concrete wall enough, it will crack. Compromise and finesse are not in his dictionary.

At a time when Illinois is in dire financial straits, the governor and legislature should be working together. The silence that ruled while Blagojevich delivered his State of the State address last week speaks of a frosty legislative session.

The governor’s budget is constructed on a foundation of sand. The assumptions in this budget depend more on the roll of the dice than sound judgement.

It bets heavily on the future while ignoring the realities of the present. For instance: Blagojevich wants to sell the state lottery to help finance a $25-billion statewide construction program.

State Sen. Dale Righter, R-Charleston, says privatizing the state lottery “...may look good in the first year or two, but after that, it’s a disaster.” The state lottery, whatever one thinks of gambling, is a money machine.

Blagojevich talked fiscal responsibility Wednesday, but his record belies the claim. The most important object of the state budget and future state budgets is to balance the books.

Blagojevich pushed again for a payroll tax on many businesses to pay for his health insurance expansion program.

The economic stimulus plan outlined by the governor carries a $1.2-billion price tag. Under the plan, about 1.3 million families in the state would receive a one-time credit of $300 per child. Businesses that pay state income taxes would get a 20-percent credit.

Whether it would have any salutary effect on the state’s economy is iffy. The $1.2-billion rebate, coming in the midst of a financial crisis, is irresponsible.

Until the state budget is balanced, taxes should neither be raised nor cut. The goal should be to live within means, not on payday loans.

State Rep. Chapin Rose, R-Mahomet, taking issue with the governor’s spending proposals, said “glaringly missing” from Blagojevich’s State of the State address was any mention of the state’s unpaid Medicaid bills.

“It’s nice to talk about going out and expanding this and that, but I’ve got nursing homes that haven’t been paid in over 150 days,” Rose said. “To me this budget session is less about going out and doing new things as it is about how we’re going to pay off our existing obligations.”

Blagojevich looks to increase revenue by raising casino taxes, tapping into tobacco settlement funds, refinancing the pension debt and taxing software.

He bets on such income to offset the costs of new programs which cannot be justified while the state operates in the red.

The governor’s budget allows for only a $300-million increase in funding for schools, the lowest such since he took office. State funding to colleges would decrease by $11 million.

Eastern Illinois University is, in a way, fortunate, compared to some other colleges in Illinois. EIU would receive $49.1 million from the state — roughly what it received last year.

Rose is right. The main objective during the budget session should be to find ways to pay off existing debts.

Until the state walks on solid financial ground, lawmakers and the governor need to focus on balancing the checkbook and paying the bills.

It will not get there as long as Blagojevich is not willing to work with lawmakers. And that requires compromise and finesse.

We’ve had quite enough bickering between the governor and the legislature. We need evidence of cooperation between the two branches.

That, and a healthy dose of responsibility.

— JG/T-C Editorial Board

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Rotty wrote on Feb 23, 2008 5:31 PM:

" You & me not pay our bills....
they'd lock us up & throw away the key.
Blago the clown not pay his bills....
eh, just another day at the office.
What's wrong with this picture?
"

attainedage wrote on Feb 24, 2008 12:20 AM:

" I worked for a Fortune 500 forest products company in the 70's. We were up against fierce international pricing competition, oil embargos, devastating EPA regulations, and widespread labor problems - lots of adverse factors. The first across-the-board corrective action senior management took was to initiate an “austerity program”. As we prepared our operating budgets in business units around the globe, we were introduced to a zero-base planning process. What that meant was that we were to ignore spending levels of prior years. The budgeting format started with only a description of line items for all expenses, with prior year dollars stated at ‘zero’. All vendor contracts were renegotiated, or dropped. Union contracts were reopened and renegotiated. Non-union wages and bonuses were frozen – from the CEO to entry level. We reinvented a 100-year-old company. Every dollar budgeted had to be accompanied with thorough commentary. Any expenditure, even in a critical area of business operations, had to be fully justified. There was no time for excuses, and the budgets were completed and implemented in half the normal time frame. At the end of the next fiscal year, WITH ABSOLUTELY NO GROWTH IN REVENUE, our company remained soundly profitable. // The State of Illinois needs to follow the path of private enterprise. Instead of creating new revenue schemes (taxes and fees), start cutting expenses – from top to bottom! "

cd wrote on Feb 25, 2008 10:10 AM:

" Attainedage said: "The State of Illinois needs to follow the path of private enterprise. Instead of creating new revenue schemes (taxes and fees), start cutting expenses – from top to bottom!"

The only problem of that is that those who determine who is on top and who is on the bottom, as far as cutting jobs or benefits to those wearing white collars, have a bad habit of turning the chart(s) upside down.

Jacking up fees for fishing/hunting license, title fees on autos, etc. is a higher % of the lower income citizens than the well-to-do's income. So basically, Roddie's revenue plan hurts the low income. 'If' we need more revenue, then rescind the fee hikes and raise the income tax. At least it will be more fair than the fee hikes.

Roddie, not Illinoians are stupid; just enough for your re-election. It's stupid to add programs and such when the state can't pay its existing obligations.

It's high time that Chicago and its metro area be amputated from the rest of Illinois, at least financially. I'm tired of the sucking sound of revenue from the rest of the state going into Chicago. "

Becky wrote on Feb 25, 2008 12:38 PM:

" Wow Attain, someone out there with a lick of sense! I've been saying the same thing for years but I was told I didn't understand how business worked. It doesn't take a rocket scientist to figure out your in financial trouble and the pool of money that you're usually dipping into has run dry. This is the time to re budget from ground zero, cut all wasteful spending (which is many, many programs)and legitimize every dollar spent. Good post! "

attainedage wrote on Feb 25, 2008 4:21 PM:

" Thank you, Becky. Anyone who runs a company and anyone who runs a household knows that it fairly simple to cut 5% to 10% from a budget. Springfield can do the same. We need a grassroots movement in our state to put an immediate cap on taxes and follow up in year two with a 10% cut in spending. "