Illinois Democrats: "Raise Taxes or the Sky Will Fall"

My father had a rule born of the Great Depression: "Pay cash; don't buy on time; and don't pay interest."

Dad didn't buy "things" (our home excepted) unless he had cash to pay for them.

Illinois' Democrat politicians have a "better idea". They buy whatever strikes their passing fancy, even though the state is flat broke. Then to pay, they raise taxes, or borrow and pay interest.

They, for example, want to build President Obama's library. Presidential libraries are ordinarily built with private funds. But their "better idea" is to pay for it with taxpayer dollars they don't have.

This "better idea," like other "better ideas," comes along at a time when Illinois can't pay its bills on time and has a multi-billion dollar pension problem.

Illinois ended 2013 with $7.6 billion in unpaid bills. (Not withstanding the fact that in January 2011 Democrats -- without the support of a single Republican lawmaker -- raised the state income tax on individuals from 3 percent to 5 percent, and the corporate income taxes from 7.3 percent to 9.5 percent.)

Couple that with the fact that "the state's four main state pension funds have an unfunded liability of roughly $100 billion.

Here's a sample of Democrat logic. U.S. Sen. Dick Durbin, D-Ill., describes taxpayer dollars he wants spent on the Obama presidential library as "seed money."

"It's going to have a long-term positive economic impact. ... This library will pay back in terms of visitors to our state, more business, more jobs and people paying taxes. ... Whether $100 million is the right dollar amount, I don't know ...."

And he's not alone. Illinois House Speaker Mike Madigan, D-Chicago, and Chicago Democrat Mayor Rahm Emanuel have been leading the charge to spend taxpayer dollars for the library. Indeed, an Illinois House Committee led by Democrats wanted to appropriate $100 millions for it.

There is of course one flaw in the argument: once built, presidential libraries generally lose money. Therefore, once built, they are normally sloughed off to the U. S. National Archives -- which continues to operate them at a loss.

By comparison, "friends" of presidents Bush and Clinton raised over $200 million in private dollars to fund their libraries. George Washington's library at Mount Vernon operates on private donations.

In addition to this "better idea," Democrats have some others. Spend $520,0000 to fly 91 prairie chickens into Illinois at a cost of $1,166 per prairie chicken, and spend billions for "high speed rail" (e.g., buy 35 locomotives at $5 million)!

On May 31, Illinois Senate Democrats approved a $35.7 billion budget, in which expenses exceed revenues by $4.4 billion or 12.3 percent. To make it balance, Democrats want to extend the 5 percent Illinois personal income tax, and the 9.5 percent corporate income taxes -- not withstanding their promises that the tax increases would be "temporary." The alternative would be -- horror of horrors! -- to actually cut spending by $4.4 billion or by 12.3 percent.

So you can bet that in the lame-duck session -- right after the 2014 General Election -- Democrats will welsh on their 2011 promise to let the personal income tax revert from 5 percent to 3.75 percent, and the corporate income tax revert from 9.5 percent to 7.75 percent in 2015. Recall, that it was in the 2011 lame-duck session that the Democrats raised the income taxes to their present levels. (Why during the lame-duck session? Because that's when "retiring" politicians can pass anything, fully knowing they will not have to answer for their votes while they are collecting their pensions.)

We are already -- predictably -- being told that a $4.4 billion or 12.3 percent spending cut will be catastrophic! Programs will be devastated. Historic sites will be closed. State agencies will be left in limbo.

The sky will fall!

There are two methods of budgeting. Governments generally use baseline budgeting, or a variation thereof. Real people -- like you and I -- use zero based budgeting.

Baseline budgeting uses current spending levels as the baseline for establishing future funding requirements and assumes future budgets will equal the current budget plus upward adjustments for inflation and population growth.

Zero based budgeting requires that all spending must be rejustified each year or it will be eliminated from the budget -- regardless of previous spending levels!

Illinois families don't have the option of using baseline budgeting to run their homes. They can't spend 12.3 percent more then they have. If they expect a 2015 income of $31,300 per year, spending $35,700 is a recipe for bankruptcy -- unless they have savings they can dip into.

Illinois has reached the point were it can't be Santa Claus to everybody. The only rational approach is for the state to thoroughly analyze every one of its programs.Then, set aside the necessary money for the most important program. Next, do the same for the second. Then, do the same for the third, and so on.

When the $31.3 billion runs out, quit spending. No sane man believes that there isn't 12.3 percent waste, duplication and/or cronyism in Illinois' $35.7 billion budget.


Posted Online:  June 12, 2014, 11:00 pm - Quad-Cities Online
by John Donald O'Shea

Copyright 2014
John Donald O'Shea