dougthonus wrote:Friend_Of_Haley wrote:However it gets done, it will require big compromise. Throw away any plans like Illinois Public Policy that will have you believe this is fixable in something like 5-10 years. We built up the liability for far too long. Part of what needs to happen is a true short term tax increase that pays off the borrowed spending from the prior generations.
The irony, and likely common with most political situations, is probably doing both at once, raising taxes and reducing spending problems and both sides compromising on this at the same time because the other side is taking a hit. Of course, the outcome is neither side is for this, because it hurts them both with their base.
That's why these situations just get worse and worse, the only way the two parties can compromise is if they both win, but the solution requires both to lose, at least temporarily.
The spending again has to be parsed. Its the spending towards the underfunded pensions that's a real drag. If we want to attract in-migration or keep out-migration down, we probably need to increase spending in other areas. Hell, I'm not sure if anyone has just considered outright paying workers to move to Illinois, maybe that needs to be explored.
I think its something like 25% of the budget that goes towards pensions right now? Let's say they pass a tax increase that could raise revenues by 5-10% and pass pension reforms that lower the unfunded liabilities by 5-10% percent. You split the extra revenue/savings; 1/3 towards paying down the pension liability, 1/3 towards expanding services which haven't actually grown in real terms, and 1/3 towards towards direct relocation packages aimed at businesses and workers to move to IL. If you can successfully grow the tax base with those incentive packages, you eventually fund your services with the increased tax base and then free up that money to pay down even more of the pension liability, until you can reach a point where you can then ramp those tax increases back down, which also hopefully makes us more attractive, and you can also ramp down the relocation incentive spending as well. Maybe within in 20 years you're back to that middle-high range for taxes with strong services (without promising unrealistic future promises that you don't fund).
Part of that is probably also tax reform which looks at property taxes and redistributes it a bit more throughout the state. If we're going to be a competitive in-migration state, the high housing/tax prices of many of our best public schools in places like Hinsdale, Winnetka, etc. are inaccessible to most of the country - spread the wealth around and make our middle to lower income neighborhood super accessible to in-migration. Plus if a portion of the property tax base was state instead of local, our communities aren't bargaining each other down just to keep businesses that are already in the state.
Basically its a problem that has to be attacked on many fronts. A progressive tax structure logically should be a part of that, but I think they did a horrible job from it, and wasted at least a year not doing much else and banking on only that. Big failing.