In the days before Gov. Bruce Rauner's budget address, a new proposal would limit the state of Illinois’ spending to the growth of its economy.
Illinois taxpayers pay the highest combined local and state taxes in the country. They have seen two personal income tax hikes in less than a decade. And some Democratic candidates for governor are hinting that they could see another if they’re elected.
Meanwhile, state government spending per capita outpaced income growth by 25 percent between 2005 and 2015.
The nonpartisan Illinois Policy Institute has introduced a plan that would tie spending limits to the state’s economy, meaning the General Assembly couldn't authorize additional spending unless the state's economy grows at an equivalent pace.
“Households across the state are expected to balance their budgets and live within their means,” IPI chief economist Orphe Divounguy said. “Illinois lawmakers have been on a spending spree.”
A perfect example, Divounguy said, is last July’s tax increase and subsequent budget shortfall.
“While we keep generating more revenue by raising taxes on people, government spending is out of control,” he said.
As part of the institute's larger “Budget Solutions 2019” proposal, the cap would limit the annual increase in state spending to the preceding 10-year average of the state’s economic gross domestic product, or GDP.
Divounguy said the state would pay off its backlogged bills and have a budget surplus by 2025 if it only adopted the institute’s proposed cap of 2.89 percent annual growth. The proposal would save the state an estimated $275 million in the fiscal year beginning in July alone.
“This would avert future tax hikes and out-of-control borrowing,” he said. “We’re not trying to enact sweeping cuts, we just want to cap the growth of spending.”
The Illinois Constitution requires lawmakers pass a balanced budget. They’ve typically gotten around the requirement by overestimating a positive revenue figure or savings from a reduction.
Thirteen states – Alaska, Arizona, California, Colorado, Connecticut, Hawaii, Louisiana, Michigan, Oklahoma, Rhode Island, South Carolina, Tennessee, and Texas – have constitutional limits on either appropriations or spending as of 2015.
State Rep. Allen Skillicorn, R-Crystal Lake, introduced the constitutional amendment last week.
“This is a tool to limit the size and scope of state government,” he said. “Programs have expanded without being funded. It has to stop.”
Skillcorn hopes to add a Democratic sponsor to the legislation soon.
The proposal would allow for spending beyond the limits should there be a General Assembly vote addressing and naming an emergency.
The amendment would need a three-fifths majority vote in the state House and Senate, both of which are controlled by Democrats.