As bad as 2017 was for Illinois taxpayers, 2018 only can be better.
First, a look back:
The General Assembly passed a $5 billion income tax increase in 2017 that costs the average Illinois household a little more than $1,000 a year.
While our Midwest neighbors continued to grow in 2017, Illinois shrank for the fourth consecutive year, according to the U.S. Census Bureau. From July 2016 to July 2017, Illinois’ population declined by 34,000 people — most in the nation.
Citing little to no action on reforms to the Midwest’s highest workers compensation costs and the nation’s worst-funded pensions, the leaders of three of the state’s top business organizations — the Illinois Manufacturers’ Association, the Illinois Chamber of Commerce and the Illinois Retail Merchants Association — called the spring and summer sessions of the General Assembly the worst ever for employers.
In June, credit ratings agencies downgraded Illinois to BBB-, just one notch above junk status and the worst credit rating of any state in the U.S. The downgrade means state taxpayers pay more in interest on borrowed money.
I could go on, but why depress ourselves further as 2018 is here.
With a new year comes new hope, a resolve to improve ourselves and our stations in life. Given all that went wrong in 2017 in Illinois, we should be optimistic that 2018 will be a much better year for state taxpayers.
Let’s hold on to that notion for a moment.
2018 is a gubernatorial election year.
In his first three years in office, Republican Gov. Bruce Rauner failed to get any of the much-needed structural reforms he campaigned on through the Democrat-controlled General Assembly. That has meant no property tax relief, no meaningful reforms to the worst-funded public pension systems in the U.S., and no reduction in workers’ compensation costs or the state’s job-killing regulatory burdens.
Rauner and Democrat House Speaker Michael Madigan — the most powerful speaker in the country, I might add — engaged in a two-year budget standoff that led to record deficits and ballooned Illinois’ stack of unpaid bills to more than $16 billion.
The standoff ended only after more than a dozen Republican lawmakers deserted the governor and voted for the massive tax hike.
Given that Madigan wants a Democrat to win the race for governor, there’s no way he allows Rauner a legislative win during the upcoming session, meaning a new budget standoff is imminent.
And despite this year’s $5 billion tax hike, the state’s budget is out of balance by $1.7 billion. Spending remains out of control because of rising Medicaid costs attributable to expansion under Obamacare and unaffordable pensions that continue to spike because of unrealistic cost-of-living increases.
With the anti-Donald Trump movement in Springfield and the powerful public employee unions controlling the Democratic Party, there’s no way much-needed Medicaid and pension reforms pass in an election year, meaning costs are likely to continue to balloon.
While there likely will not be any significant new tax increases approved before the November election, if a Democrat wins the governor’s race and Democrats hold on to the state House and Senate, it would be reasonable to anticipate there will be new attempts to change the state constitution to allow for a graduated income tax.
That would drive more job creators out of the state.
Let’s face it: Illinois is the Cleveland Browns of U.S. states.
The Browns followed a 1-15 2016 with an 0-16 season in 2017 and managed to make the 5-11 Bears look like Super Bowl contenders on Christmas Eve. At least the Browns were smart enough to change upper management (yet again).
Madigan has been Illinois House speaker for all but two years since 1983.
The only chance state taxpayers have in 2018 and beyond is for voters to clean house.
Otherwise, the status quo — and the tailspin — continues.