Illinois lawmakers and voters are in the process of amending the state constitution to allow for a progressive income tax. Springfield is looking for more revenue because lawmakers habitually spend more than the state takes in. This would seem impossible in light of the fact the state has a constitutional requirement to balance its budget. But the constitutional requirement is so poorly worded that it has allowed lawmakers to claim they have been balancing budgets while accumulating $210 billion of debt.
The balanced budget requirement states, “Proposed expenditures shall not exceed funds estimated to be available for the fiscal year as shown in the budget.” Under this wording loan proceeds can be used to balance the budget because the money borrowed becomes funds available. Expenditures can be kept low by simply not writing checks to cover incurred costs.
The Illinois Constitution and state budget law should be reworded so the budget is truly balanced. Forty-nine of the 50 states have balanced budget requirements so lawmakers do not put the state in debt and to hold lawmakers accountable. As a former U.S. Treasury official Frank Cavanaugh stated, “The politicians should not have the pleasure of spending i.e. get votes without the pain of taxing i.e. lose votes.” But the wording of the Illinois balanced budget requirement allows, if not encourages, lawmakers to spend more than the state takes in. For years citizens of Illinois were lulled into a false sense of security by lawmakers’ claims that the budget was balanced.
Illinois’ financial condition was not only harmed, so was the integrity of the state’s representative form of government. Citizens were not given the information needed to be knowledgeable participants in their government’s tax and spending policies. In fact, citizens were told misleading information. They thought lawmakers were living within their means and the state was not going into debt. Voters selected candidates based upon tax and spending levels included in fictitiously balanced budgets. Would citizens have voted differently if they had been taxed to cover the true costs of government or received fewer government services to truly balance the budget?
In future blog posts, I will outline how the current misleading wording of the Illinois’ constitutional requirement to balance the budget has been used to circumvent the intent of the requirement. I will also discuss wording that could be used to improve the requirement and to enhance the state budget law, so budgets would have to be truly balanced and citizens could have confidence in their governments’ reports.