Just like the federal government, the biggest issues confronting the returning and newly elected members of Illinois’ General Assembly are fiscal matters. For years, previous general assemblies have defied the state’s constitutional mandate requiring the legislature to adopt a balanced budget. So, the top priority remains that of restoring fiscal integrity to state finances.
The legislature must develop budgets where spending matches or is less than the amount of revenue state government collects each year. It must eliminate the backlog of payments to vendors, local governments and agencies. State government balance sheets must achieve equilibrium where fiscal obligations are paid in a timely manner.
Most importantly, legislators must acknowledge that the current public employee pension programs are unsustainable and must be restructured to curb the excessive long-term costs to taxpayers. They must stop stalling and remove the uncertainty that influences business and personal decisions. The fiscal health of the pension funds must be fixed so retirees will receive retirement benefits, even if they are less generous.
Governor Quinn is right to keep reminding members of the General Assembly and the public that rapidly rising pension costs are effectively squeezing out funds that would otherwise go toward financing education, public safety, healthcare for the indigent, and other public services.
Legislators must be reminded that our state’s failure to successfully resolve the public pension debt obligations has made Illinois a national disgrace. The state’s unfunded public employee pension debt is the largest in the nation, and our bond ratings keep company with some of the most financially distressed nations in the world. Until our elected officials accept the tough decisions and cast responsible votes to put these funds on a path toward solvency, business owners, investors and bond holders can have no trust or confidence in Illinois government. The continued failure to act has placed the economy and quality of life for future generations at risk.
In addition, the newly elected General Assembly confronts other daunting public policy issues that require its attention. The capital funding program that was adopted in 2009 will be exhausted during the next legislative term. Legislators must act to reauthorize and fund a capital program if infrastructure investments are to be maintained in a state of good repair. Safe and reliable transportation networks are critical to Illinois’ economy. Legislators should establish an annual capital spending program that provides predictable, consistent and stable funding for infrastructure investments.
Other important business climate issues pending before the General Assembly include the elimination or extension of the temporary corporate and individual income tax rate increases that were imposed in January 2011. The 2011 law incorporated a sunset provision triggered for January 2015. The General Assembly members taking office in January must determine the fate of the tax rate increases that generate approximately $7 billion to the treasury.
The workers’ compensation law adopted in 2011 must be revisited in order to improve the state’s cost of doing business relative to other states.
The pending General Assembly action most threatening to the viability of many small businesses is the threat of another mandate to increase the state’s minimum wage.
During the next two years, the critical assessment of Governor Quinn and the Democrat-controlled legislature will best be measured by the agenda they fulfill. Will they demonstrate fiscal discipline, promote expansive investment from existing businesses, generate population growth from job seekers migrating to Illinois because of a vibrant economy, promote new business opportunities, and substantially reduce unemployment? If there is limited or no progress on these fundamentals, it is likely they will become the election themes for 2014. iBi
Doug Whitley is president and CEO of the Illinois Chamber of Commerce.