4/10/2007 2:54:00 PM Guest column Who wants to talk about spending?
By Sen. DALE RIGHTER For the Daily News
As the Illinois General Assembly's 2007 session progresses, several topics of importance are beginning to dominate the debate in the Capitol. But by far the most prominent discussion is whether a major tax increase will be enacted, and if so, how much that may be.
There are currently two major proposals being discussed in Springfield. The first is the Governor's "gross receipts tax." According to his office, this proposal would impose a percentage tax on revenues a business takes in. Specifically, the tax would be .85 percent on goods and 1.95 percent on services. As advertised, the proposal would exempt businesses that take in less than $2 million in revenues, although those entities would continue to be subject to the current income tax. Additionally, the recently-revamped proposal now contains about $1 billion in property-tax relief. According to statewide figures, that would equate to a reduction of about 6 to 7 percent in property tax bills in my district. Overall, the governor's new tax would increase state revenues by more than $7 billion, or almost 25 percent more than currently collected. It would be the largest tax increase in Illinois history.
The other proposal is embodied in House Bill 750. This bill would increase the income-tax rate from the current 3 percent to 5 percent, and the corporate rate from 4.8 percent to 8 percent. It would subject services to a tax similar to the way goods are taxed today and subject pensions above a certain amount to the income tax. Overall, this proposal would raise about $5 billion in new annual revenue. It contains a provision that would send about $2 billion of that new revenue back to local governments for property-tax rebates on the portion of a taxpayer's bill that helps fund elementary and secondary education. Statewide figures indicate such a rebate would provide for a 12 to 15 percent cut in the average property-tax bill in the 55th Senate District.
There are other, and additional, tax increases under consideration. But regardless of which proposal is being discussed, the potential increase in the level of taxation is substantial. What's not substantial is the time spent in Springfield these days talking about what my grandmother used to call "the other end of the stick" - government spending.
It's not very fashionable these days in the Capitol to talk about how much spending has increased over the last few years. It is even less fashionable to question how your money is being spent. That's a shame, because there are some serious issues to discuss such as:
The state's Medicaid program. According to a study performed by a well-respected and non-partisan organization, Illinois can save more than $1 billion over the next five years by increasing its use of managed-care principles in this public-aid health-care program. Instead, the governor and his party's majority have decided to dramatically increase spending here by, among other items, including a program that helps pay for health insurance in households which earn in excess of $80,000 annually. The Medicaid program's obligations far outweigh its resources because of the breathtaking pace at which expansions have been implemented, and the result is the neediest are left underserved.
Public school funding. Over the last decade, funding for elementary and secondary schools has increased by a stunning 150 percent. No one questions the need to adequately fund our system of public education - but what can be fairly and objectively said about the results of such dramatic increases? Over that same decade, the student population has remained basically flat, as have student test scores. The two most prominent and popular words in the debate on school funding have become "more money." For the sake of our state's future, the discussion must focus instead on student achievement, and everything else should be only a means by which we improve in that area.
Our state's debt. Driven by dramatically increased borrowing for pensions and operational expenses, taxpayers spend about twice what they did just a few years ago on debt-service payments. Doing so not only saddles tomorrow's generation with debt from our spending today, it also takes funds away from other priority areas.
Common sense dictates that before dipping further into taxpayers' pockets there must be a sincere and deliberate effort to change our spending habits. Let's consider the family that is having difficulty making ends meet. Before taking money out of their savings account, which they accumulated over the years through hard work and fiscal discipline, they would do so only after going through their budget, item by item, to find where expenses could be eliminated or at least reduced.
Shouldn't our state government follow that same process? My constituents, and I think most citizens in Illinois, believe the answer to this question is "absolutely yes." Unfortunately, that is not the rationale the state's leaders have followed lately. The last few years have been dominated by increased taxes, fees, borrowing and spending piled higher and higher, with little regard to issues of management, overlapping programs, or waste.
It may be that after a serious and thorough review of spending has been completed and appropriate reforms are enacted, state government will still need more revenue in order to appropriately fund necessary services. Considering the reckless manner in which both obligations and borrowing have increased over the last few years, that wouldn't be much of a surprise. But that will require us to have a balanced discussion in the Capitol about "both ends of the stick," and spending must be the first item on the agenda.
State Senator Dale Righter represents the 55th District in the General Assembly. He can be reached at 217-235-6033.