First you stop digging: Projections of Illinois' fiscal imbalance and paths to remedy it
reportposted on 02.08.2021, 14:31 by Richard F. Dye, David MerrimanDavid Merriman
The state of Illinois has operated for many years with a structurally unbalanced budget in the sense that, under the policies in place at the time, government revenue generated by the tax system was insufficient to pay for government spending under current law. This report from IGPA's Fiscal Futures Project says the state of Illinois can recover from its current fiscal problems, but only with a disciplined and sustain approach that considers many alternatives.
The authors have identified five alternatives for lawmakers to consider: cutting spending, raising income tax rates, broadening the income tax base, broadening the sales tax base, and increasing the state’s economic growth rate. The report takes a closer look at each alternative, examining its individual impact. While each alternative alone would be insufficient, a combination of all of the alternatives could be just enough to close the budget gap, but only if implemented quickly and maintained over a period of at least a decade, according to the report.
The report concludes that the state will need to develop a “grand plan” that includes multiple spending cuts and multiple sources of revenue and that spreads those adjustments over several years. Such a plan would require cooperation among political and other interest groups that can engender confidence that they have the long-term commitment necessary to fill the budget hole for good.