You Can’t Get There From Here

At the Wall Street Journal Jonathan Williams and Dave Trabert propose that the solution to New York State’s and Illinois’s fiscal problems is to cut those state’s per capita spending to that of Texas, second only to Florida as the lowest spending of any state. Here’s the conclusion of their op-ed:

Taking the scalpel to state agency budgets will create angst for governors, lawmakers and the lobbyists hired to defend unnecessary spending. But policy makers have a responsibility to make the most effective use of taxpayer money. Congress, likewise, should understand that bailing out profligate state and local governments will only ensure more of this bad behavior in the future.

I wish they gave some hints about how they think that might be accomplished. In Illinois’s case do they propose cutting public pensions? That would take a constitutional amendment that lawmakers are extremely reluctant to introduce. Do they propose not making interest payments on Illinois’s public debt? Cutting education spending? Illinois already has one of the lowest state contributions to education of any state. Most education spending is by local governments. Cutting back on highway spending? Any truck driver who’s ever driven in Illinois will tell you that Illinois’s roads are a mess. That’s completely obvious when you drive from Illinois to Indiana, Wisconsin, Iowa, or Missouri. You don’t need signs to tell you you’ve Illinois. You can tell by the condition of the roads. They would need to do most of those things to meet the targets the authors of the op-ed are setting.

I’m not defending Illinois’s situation and I certainly don’t believe Illinois or New York should receive a federal bailout without paying a steep price, going into some sort of receivership. Which, of course, won’t happen. I’m just pointing out the realities. Decades of mismanagement by Illinois’s elected officials have dug a hole from which it is probably no longer possible for the state to escape. It’s far more likely that Illinois’s condition will continue to deteriorate than that the steps to remedy the situation will be taken.

I’ll close this post with a couple of stories I’ve told in the past. One is the remark of a German foreign minister about the NATO allies’ free riding on their obligations. The politicians know what needs to be done. They just don’t know how to keep their jobs if they do it.

The second is an old joke about a tourist lost in backwoods Maine who drives up to a general store in the middle of nowhere and asks for directions. After a bit of chewing the Mainester says, “You cahn’t get they-ah from he-ah”.

That’s our problem. There is no pain-free or likely path to fiscal soundness for Illinois. We can’t get there from here.

Right now we’re being deluged with TV spots for and against Gov. Pritzker’s so-called “Fair Tax” amendment. I don’t know whether it will pass but I do know that the case the governor is making is specious. The spots in favor of the amendment make the point is it fair for the rest of us to be paying the same tax rate as billionaires. 17 billionaires live in Illinois. 17! I wouldn’t be a bit surprise, should the amendment pass, that the number would decline to one: J. B. Pritzker, who would abandon the state as soon as his term of office ends.

2 comments… add one
  • TarsTarkas Link

    ‘I wouldn’t be a bit surprised, should the amendment pass, that the number would decline to one: J. B. Pritzker, who would abandon the state as soon as his term of office ends.’

    Naw, just do what Newsom and some others have proposed: institute an exit fee for those who wish to flee Illinois. A fair rate, like maybe 100% of total wealth. After all, you’re leaving Illinois, you feel you can earn it all back somewhere else, and it’s soooo badly needed there!

    ‘The politicians know what needs to be done. They just don’t know how to keep their jobs if they do it.’

    Obviously they need to be removed in toto for it to happen.

    On a more serious note, I think the only way Illinois might escape would be to amend the constitution to allow bankruptcy, or simply declare bankruptcy and delay any overturn of the law or unilateral edict (Pritzker is good at edicts) until the financial ramifications are impossible to reverse. Of course the state wouldn’t ever be able to borrow money again (except by edict, hey, governor!) but considering their current credit rating it might be an improvement, they might actually start passing balanced budgets.

  • Has an exit tax of the sort you’re describing been upheld by any court anywhere in the U. S.? I would think that they’d be struck down with prejudice as violating Articles 8 and 9 of the Constitution as well as the 4th, 10th, and 13th Amendments. Not to mention the state constitutions.

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