But even achieving flat spending is hugely difficult because of ever-increasing pension obligations, medical inflation and education spending pressures, not to mention all the other programs that legislators and governors devise.
One of COGFA’s suggestions was reducing statutory interest rates on past-due bills of between 9% and 12% annually, which it claimed could reduce spending by $15-45 million per year. While it looks good on paper, the hard fact remains that vendors have been shafted for two decades by this state and it’s already difficult to find people who will do business with Illinois. Cutting that interest rate would make it even tougher. COGFA also suggested expanding the sales tax base, which is something the governor has rejected.
But the commission did have one piece of sound advice: Use the $7.5 billion from the federal government’s new American Rescue Plan to pay off the money borrowed from the feds, pay down the state’s bill backlog, use some of the cash to generate as much federal matching funds as possible and patch any COVID-caused budgetary holes.
That will definitely help keep down the projected bill backlogs, but it won’t do much to correct the structural budget problems this state has had for many years. That opportunity was lost last November when Gov. Pritzker’s “fair tax” went down in flames.
While the governor’s $1 billion “corporate loopholes” proposal would make a dent in those projected holes, a new and comprehensive plan is necessary. But it’ll be pretty tough with an election year right around the corner. Petitions can be circulated in about five months.
Rich Miller publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.
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April 23, 2021 at 05:23PM