Gov. Thompson's 14th, and last, budget message wasuncharacteristically brief, but quite revealing. To the end, heremains increasingly pro-tax and accepting of fiscal sleight-of-handto sustain increased government spending.
It is questionable whether he will leave the state in betterfiscal condition than when he inherited it. Indeed, no matter whichcandidate assumes the governor's office next January, he faces themonumental task of trying to bring state finances under control.
Taxpayers and government budgeters alike have been on a fiscalroller coaster since 1983. Every third year, the General Assemblyand governor have set spending plans in motion that cannot besustained without successive tax increases. Nine months ago theGeneral Assembly repeated the performance. With the benefit of thelargest tax increase in the state's history and a surprisinglyattractive year-end balance, lawmakers crafted another short-fusedbudget.
In a particularly revealing departure from the prepared address,the governor said, "There was no way that members of this GeneralAssembly, or the governor or those out there who need our help aregoing to let that (state treasury) balance stay over a half a billiondollars. No way. I have been around long enough to know that."
This comment clearly illustrates the short-term fiscal approachour state's politicians have adopted. In the one year that there wasa chance to improve cash reserves, they could not do it. Indeed,after 14 years, the Thompson administration still considers a $200million daily balance, an amount equivalent to just two days of statespending, an acceptable measure of fiscal health. The state'sfinancial planners know reserves should be higher, but they cannotresist the demands of spending interests.
The governor's 1991 budget proposal is predicated on more taxincreases, but no one should be surprised. The call for additionaltaxes was set in motion last summer when the General Assemblyapproved a deficit budget and the governor failed to use hisline-item veto power to scale it back further.
The governor brought home the point when he told the assembly,"Almost all of our new natural revenue growth is eaten byannualization of Medicaid reimbursements you voted for last year, andthe federal mandates imposed upon us by Congress."
In short, there is limited flexibility and little opportunity toprovide spending increases over this year's budget levels. Havinglost the will to say no, the governor's only alternative is tocontinue asking for more revenue.
In addition to seeking tax increases, the governor proposes toreturn to the use of fiscal gimmicks, such as delaying payments tomedical providers and reducing contributions to public employeepension funds. He even plans to renege on his long-term funding planfor state pension systems that was crafted just last year.Ironically, it was the elimination of such distasteful practices andthe assumption of greater fiscal integrity that were among the chiefarguments in support of tax increases during the last three years.
The governor is prepared to abandon these hard-won measures sosoon after the Legislature approved them because they severelyrestrict budgetary choices. The process of putting the state'sfiscal house in order is necessarily restrictive. Apparently, theprescription has proven too limiting for the governor's comfort.
The governor's budget message also revealed that 72 Illinoiscounties have no regular state trooper patrols between 11 p.m. and 7a.m. The admission that the state is not meeting basic serviceexpectations suggests the proper approach is a re-evaluation offundamental governmental services and how well the state providesthem. However, it is too much to expect a well-entrenchedadministration to successfully engage in zero-based programevaluation.
One explanation for the governor's revenue problem is theduration of his reign as the state's chief executive. Constantexposure to the needs, challenges and expectations of government'sdependents has resulted in a vision of what government can and shouldbe doing that far exceeds the state's fiscal limitations. A goodexample of how the governor has dealt with the spending restraintdictated by annual cash receipts is the enthusiasm he has forcapital projects and miscellaneous tax increases to help serviceincreased long-term debt.
Therefore, it should be noted that a discussion of an expansionfor McCormick Place or a domed Chicago sports stadium wasconspicuously absent from the budget message. If it is true thatGov. Thompson is committed to securing these projects before leavingoffice, last month's budget message revealed only half of his plansto increases taxes, for another billion-dollar bond program cannot befinanced with existing revenues. If history repeats itself, the endof June will have the governor offering more tax plans.
Fortunately, the General Assembly's leadership has solidlydisavowed any sympathy for tax increases in 1990. Legislators mayhave recovered from the 1989 spending binge and will rediscover thefiscal responsibility they briefly assumed in 1988. "Reallocation"and "living within available resources" are not the phrases therecipients of state revenues like to hear. Nevertheless it is theonly way to control government spending and halt new taxes.
Douglas L. Whitley is president of the Taxpayers' Federation ofIllinois.
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