Richard Epstein’s backgrounder at the web site of the Hoover Institution on Illinois’s fiscal problems is solid and, if you’re interested, I recommend you read the whole thing. It’s not long—just thirteen paragraphs. It ends with a diatribe against public employee unions.
What Mr. Epstein’s post is lacking is a prescription. What is Illinois to do? Neither Gov. Rauner nor Speaker Madigan have any reason to budge. Their face-off continues as Illinois’s credit rating deteriorates, resulting in a higher cost of borrowing tomorrow than we have today. That’s no joke in a state that relies on borrowed money to pay operating expenses.
I’ve read Gov. Rauner’s “turnaround agenda”. Even if it were adopted lock, stock, and barrel it wouldn’t solve Illinois’s problems. And, of course, Speaker Madigan’s implicit prescription—more taxation and more borrowing—solves nothing either. Illinois’s tax base is shrinking even as I type.
States can’t declare bankruptcy but I honestly don’t see any other solution.
I also don’t see a resolution without amending the state’s constitution. Our legislators and governor can’t agree on a budget and we expect them to amend the state’s constitution?
