Gov. Thompson and the Illinois legislature will have a hard time maintaining adequate state services when federal cuts riddle next year`s budget. But a large part of their problem was created in Springfield, not in Washington. The irresponsible decisions of the last legislative session will make it much more difficult to cope with the loss of federal money.
Utility taxes are regressive and should be scaled back. The state is in no shape, however, to cut future revenues from one tax without making sure the lost money will be replaced with another revenue source. Yet that`s just what happened last summer when a bill that will cap utility tax revenues sailed merrily through the legislature. Gov. Thompson warned about the damage to future state budgets, but he signed it anyway. As a result, the state will lose about $225 million over the next five years.
The Build Illinois program includes some excellent public projects (and some that reek of the pork barrel), but its promises are bound to outstrip its funding. Gov. Thompson insisted that a new tax on private sales of used cars would raise $60 million to $70 million a year, enough to finance most of the Build Illinois bonds. But in its first three months, the new tax has brought in only $3 million.
Now state Comptroller Roland Burris, whose monthly reports often spot incipient fiscal problems, warns that the education programs approved by the legislature last year also may be underfunded. The new money was to come primarily from an increase in the cigarette tax, but that tax is now so high in Illinois–and particularly in Cook County–that the revenue is likely to be lower than projections. Buyers can easily cross over to Indiana to stock up.
State aid to education grew by $304 million this fiscal year, the first substantial increase in the state`s share of school funding in a decade. Further increases are planned through 1990 to support early childhood education, improved science and mathematics classes and other programs Illinois needs to catch up with states that have been much more generous with their schools. But in his January report, Mr. Burris predicts that ”such large increases may be overly optimistic due to limited growth in revenues in fiscal 1987 and thereafter.”
The latest figures from Mr. Burris` office show that state income tax revenue for the second half of 1985 grew by only 2.6 percent over the comparable period of 1984. Sales tax revenues increased just 2.1 percent. That means the state`s two chief sources of revenue are not keeping up with the cost of living. Yet it faces a loss of federal aid that could total $600 million next year, and it`s committed to ambitious, long-term public works and school enrichment programs.
Gov. Thompson should acknowledge these problems in his State of the State speech Monday, and offer specific solutions next month when he presents his 1987 budget. But four years ago, when the state faced a similar financial squeeze, the governor denied there was a problem until a few days after his re-election. Then he suddenly discovered an urgent need for an increase in the state sales tax and income tax. This time, more people will be keeping a hard eye on the numbers, and on the campaign rhetoric of all candidates for state office.
