Author Amy Hassinger’s cri de cÅ“ur over the consequences of Illinois’s budget impasse on higher education in the state is the lead op-ed this morning on the New York Times opinion page:
Urbana, Ill. — THIS spring my friend’s daughter received exciting news: She had been accepted to the University of Illinois at Urbana-Champaign. It’s our hometown campus, but also the state’s flagship public university and one of the best research institutions in the country.
My friend is a single mom with a few part-time jobs; finances are tight in her house. But the university offered them a decent financial aid package, one that would have made it possible for her daughter to attend. If, that is, it was an offer they could count on. But they couldn’t. The financial aid letter clearly stated that their award was “contingent upon continued funding†from the state, and might need to be “reduced or rescinded,†depending on what happened in Springfield, the state capital.
Ah, Springfield.
Our lawmakers have spent the last year locked in a staggering budget impasse, with no end in sight. The state is deep in debt, with mountains of unpaid bills, while the Democratic-led Legislature and the Republican governor fight a war of attrition. Another deadline just blew by this week: May 31 was the last official day of the legislative session. Still no budget. Any proposal now needs a three-fifths majority to pass, an even higher bar. Meanwhile, the collateral damage is swirling like sand in a windstorm.
She continues with a litany of the woes that colleges and universities face in the absence of their stipends from the state and concludes:
Illinoisans are fed up. Yes, the problem is gnarly and complicated. Yes, the political divisions are deep and wide, just as they are nationally. But our governor and legislators must find a way to cross them soon and to pass a functional budget, before the damage they’ve already done to public higher education becomes irreversible. Until they do, our best students will head elsewhere for college — or, even worse, nowhere at all.
We’re in this situation because Illinois politicians have been behaving irresponsibly for, literally, generations, spending more than revenues would allow and borrowing the rest. Borrowing in order to consume more is a reasonable strategy in periods of high inflation or robust growth when it becomes easier to make each successive payment. It’s dangerously irrational when inflation is low (or, worse, there’s deflation) and when growth is slow or nonexistent and a declining population suggests that will be the case for the foreseeable future.
Illinois already has the highest real estate and sales taxes in the country. Its state income tax is among the lowest so, obviously, that’s a tempting target. Illinois cannot impose a graduated income tax without amending the state’s constitution.
Illinois’s governor has refused to sign budgets delivered to him by the legislature that are out of balance in violation of constitutional requirements, particularly in the absence of action on his “turnaround agenda”, a laundry list of reforms including a property tax freeze, spending cuts, limitations on public employee unions, and reforms to workman’s comp. He won’t relinquish the only bargaining chip he has in a state in which both houses have Democratic supermajorities and, given the will, can override any veto he may impose.
The state legislature for its part finds item on the “turnaround agenda” anathema and won’t take responsibility for the fecklessness of its actions. House Speaker Mike Madigan, who’s held his job for most of the last 40 years and whose fingerprints are all over Illinois’s problems, would apparently rather have the election issue than a resolution.
And here we stand. Both sides seem to think they’re winning. We’re entering our second consecutive year without a budget. Illinoisans aren’t winning.
Borrowing to pay for operating expenses seems like a good idea until you cannot pay the interest, and you can never convince anybody who thinks it is a good idea that it is not. Catastrophic failures are usually small but cascade with each impacting the next. It is like compounding interest. Financial failures are similar. Once started, they can quickly become unmanageable.
These city and state problems are coming at a time when countries are also experiencing problems. What might have been manageable 10 or 20 years ago is quickly being swamped by world financial and monetary problems.
For those playing at home. The budget proposed was $40B. The tax base is $33B. THAT’s how out of balance it is. Its no small blow in the budget. Not fixable with taxes. At least not unless the tax bill asks the last to leave to turn out the lights.