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The fiscal truth and a modest proposal
But would anyone believe a candidate attempting to By PAUL M. GREEN In 1994 most Illinois voters will be exposed to a herd of state and local candidates spouting slogans to solve fiscal woes. Unfortunately, much of the speechmaking will be nothing more than candy-coated rhetoric disguised as hard-nosed policy alternatives. Why? The answer is simple: The truth not only hurts; it is also bad politics. A current General Accounting Office (GAO) report on state and local finances details the problems of funding governmental services in recent years. "On the spending side," writes the GAO, ... certain large programs were growing especially rapidly, such as Medicaid ... at the state level, environment and housing at the city level, and public safety at the county level. ... While at the beginning of the period, revenue growth was enhanced by robust economic growth, later it was dampened by (1) slowing economic growth and recession ... and (2) voter resistance to new taxes at all levels of government." Put simply, the core of the problem is that demand (services) is outpacing supply (revenue). The result: Budgeteers have become "monetary magicians." They use accounting gimmicks and bookkeeping sleight of hand to balance the budgets when in fact they and their elected policymaker supervisors know all too well that it's all an illusion. And the problem in Illinois as in many other states is not getting better. The Taxpayers' Federation of Illinois reports that unfunded past state liabilities that must be paid from future general funds appropriations remain well over one-half billion dollars. At the local level, ongoing suburban growth is draining the relative wealth in terms of property value, from two former adversaries — downstate and Chicago. The so-called six metro counties (Cook and the five collar counties of DuPage, Kane, Lake, McHenry and Will) had their equalized assessed value (EAV) increase 94 percent from 1982 to 1991 while Illinois' other 96 counties experienced EAV growth of 3.4 percent. Thus, writes the Taxpayers' Federation of Illinois, "[these] six metro counties accounted for 76 % of the [total] property valuation in Illinois ... ." Within the six metro counties growth is far from even. Intrademographic variations within these six counties are as wide as the interdemographics between the six as a region and the rest of the state. In sum Illinois is a state where local growth is uneven, unbalanced and, some might argue, unfair. This clear fact affects not only services by government at the local level - for example, schools - but it also greatly affects the revenue at the state level, namely an anti-tax increase fever. Taxpayers living in the locations doing well economically believe they are 42/February 1994/Illinois Issues
already contributing more than their fair share of revenue to state and local governments, while citizens residing in stagnant or declining communities clamor for more or better services from government, paid for with other people's money. What to do? Here is a three-point manifesto that may or may not work, but someone somewhere has got to start someplace. • Candidates, government officials, journalists and professors should tell the truth. There is no money tree growing somewhere in Illinois. Everyone should stop suggesting that the "state" should contribute more local or statewide services. To use the word "state" in this manner is pure demagoguery. Honesty should compel all to say either "state taxpayers" should pay more taxes to pay for more services or some services should be cut to provide more dollars for other services. • Governmental management must be tightened. Simple bookkeeping should suggest that fewer funds means fewer employees and that future public services will be provided by those employees working longer hours and without a great deal of middle management supervision. • We need more revenue. Those individuals against new taxes or those citizens demanding more services should be ardent advocates of new revenue ideas. A recent article in the journal City and State reveals how several urban centers in America facing increased service needs and a shrinking revenue base are turning to casino and riverboat gambling. Delaying Chicago's plans for riverboat gambling or better yet a land-based casino/theme park will only accelerate the regional and economic tension between existing levels of tax dollars and the services those dollars provide. In short there are no easy solutions to our fiscal mess. Candidates should lay the options on the table, and citizens should decide which plan is the fairest and most workable. Painless parables based on fairy tale logic or rehashing old political wounds to create a "we versus them" mentality simply will not work. However, I must admit that the big unanswered question remains: Would voters listen and think about the truth even if candidates started speaking it? Paul Green is director of the Institute for Public Policy and Administration, Governors State University, University Park. February 1994/Illinois Issues/43 |
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