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Eureka! There are Alternatives to Gov. Quinn’s Tax Increase

Americans for Prosperity 19 March 2009 No Comment

The Illinois chapter of the free market grassroots organization Americans for Prosperity (AFP-IL) today responded to the governor’s budget by offering suggestions on how Governor Quinn could reform state government after six years of corruption.

The group was encouraged that the governor spoke of stimulating the economy by cutting taxes for middle-class families and some businesses. They also support trimming wasteful spending from the budget and reducing government spending by 3 percent from all departments except health, safety, and education.

“Governor Quinn provided much hope in his proposed reform agenda. AFP looks forward to working with the governor to enact some of these much needed reforms. However, the governor failed to address how he will reform the states antiquated budgeting process. There should be no rush to pass a tax and spend budget until a process in place that provides a review of how every tax dollar is being spent and to justify those expenditures in a transparent forum,” stated AFP-IL State Director Joe Calomino.

AFP-IL offered the following recommendations to the governor on much needed changes to the state’s budget going forward:

  1. No New Programs – Stop creating new spending programs and expanding existing ones until we can afford it.
  2. Stop the Pork – No more wasteful spending on pet projects. Millions of dollars have been spent on pork/member initiative projects over the past several years, including:
    • Hip-hop dance classes, music festivals, $1 million for a heated driveway at the Governor’s mansion, $3.2 million to plant wildflowers along highways, $2.5 million contracted for flu vaccines that never benefited one Illinoisan, and $1 million to the Loop Lab School.
  3. Spend Education Dollars Wisely – Stop throwing new dollars into our education system without imposing additional reform and accountability measures to ensure the students are benefiting from those additional investments. Despite the hundreds of millions of dollars funneled into the education system over the last six years, student test scores have not significantly improved. A few reforms offered in the State Senate include:
    • Pay for performance (also know as merit pay) measured by 1) student gains and 2) classroom evaluations.
    • Elimination of the caps for charter schools.
  4. Make Medicaid More Efficient – Medicaid spending has increased dramatically in the last six years and grows at twice the rate of state revenues. This growth rate is unsustainable. Recommendations for efficiency gains include:
    • Managed Care, which would cut down on unnecessary utilization and keep Medicaid patients from using our hospital emergency rooms as doctors’ offices.
    • Requiring stricter guidelines to prove income levels and requiring proof of residency status will help make sure that only those individuals who qualify for Medicaid are actually on the program.
  5. Don’t Use One-Time Revenue to pay for Ongoing Spending – Stop funding new base spending with one-time revenues. We should not use borrowed money (pension bonding) and fund sweeps to pay for ongoing programs. This practice expands the spending base, without expanding the revenue base and creates bigger problems in future years.
  6. Reform Pensions – The state’s pension systems are in dire financial straits and need to be reformed for future generations of taxpayers. However, because these pension benefits are constitutionally protected, most major reforms can only be applicable to future employees. Some possibilities for reform include:
    • For newly hired employees, raise the retirement age to 65. Currently, most retire at 60, some much earlier under the Rule of 85. This could save tens of billions of dollars over the next 40 years.
    • For newly hired employees, limit COLA increases on pension benefits. Currently, it’s an automatic three percent.
    • For newly hired employees, create a defined contribution pension plan where pension benefits are defined by the employee’s contribution, not by a defined package of benefits.
    • Cap pensions from state funded systems at a certain level such as $100,000.
    • For current employees, increase the employee contribution to pension systems. State employees now pay four percent, while teachers pay 9.4 percent.
  7. Greater Transparency in State Budgeting
    • The Seven Days of Sunshine Proposal which would require all budget bills to be on file and available online for at least seven days before enactment. This would eliminate the last minute passage of huge budget bills that members are asked to vote on before they know everything that is in them.
    • Enhanced online databases for the public to monitor state spending.

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