Atty. Gen. Neil Hartigan deserves applause for his promise to turn a critical eye on the spending practices of every department and agency in state government, even if his projections of 2,500 job cuts and $573 million in savings are overly optimistic.
Hartigan`s charge that Gov. Thompson`s spending practices were
”irresponsible” is the usual campaign hyperbole, but after 14 years in office the governor probably has grown comfortable with his way of doing things. A review of state spending, whether it`s by Hartigan or his Republican rival for Thompson`s job, Secretary of State Jim Edgar, should be expected.
Hartigan`s new fiscal agenda hits the mark with its proposal to overhaul the state Department of Commerce and Community Affairs, which has adopted a hodge-podge of faddish development programs with little sense of their overall economic effectiveness. His plan to reorganize the agency and trim an estimated $50 million from its spending is overdue.
He also has a good idea in requiring more state regulatory agencies to pay their own expenses by increasing fees charged for permits and licenses. And he promises to renew the state`s commitment to spending on education, always a laudable goal.
Where Hartigan starts to go astray is in his call for a tax increase on businesses and farmers. No, he doesn`t call it a tax increase. He calls it
”closing loopholes.” But his plan to eliminate $87 million in sales tax exemptions for machinery and equipment purchases would be a business tax hike. It took a long time to help the business climate in Illinois by granting exemptions for major purchases, as other states do, and this is no time to kill them. It`s the most damaging kind of tax increase for a state teetering on recession.
Something doesn`t add up when Hartigan notes that Illinois has lost 27,000 family farms in recent years, then suggests he might close the sales tax exemption on agricultural machinery.
Of course, if the Hartigan-supported Tax Accountability Amendment to the Illinois Constitution wins voter approval, he can forget the $87 million. The amendment would force a three-fifths vote in the General Assembly to remove the exemptions, and Hartigan couldn`t get it. Then Gov. Hartigan would be left to curse Candidate Hartigan.
Hartigan hits the right buttons when he says Illinois voters will be skeptical about tax hikes until they believe that all prudent cost-cutting measures have been tried. The number of administrators in state government has risen markedly in the last decade. It`s overly optimistic, however, to project that he can trim back administrative positions to 1977 levels when states have been called upon to do so much more under the so-called ”new federalism.”
Hartigan projects that natural growth in revenues and his cost-cutting measures would make about $1 billion a year available for state services without a tax hike. But much of that would be eaten up by the natural rise in prices. And if Hartigan helps to kill the $720 million a year going to local schools and governments through the state income tax surcharge, his extra $1 billion will shrink dramatically-and he`ll have immediate demands to bail out local taxing districts with state revenues. Goodbye, surplus.
Even at its rosiest, Hartigan`s promised savings won`t erase the need for a change in Illinois tax policy to meet the state`s neglected responsibilities in health care and to take the pressure off the property tax-and reduce blatant school funding inequities-by boosting state aid to school districts.
So go ahead, let loose the sleuths on the state departments and agencies and ferret out the needless spending. But Hartigan should not pretend, even during a tough election campaign, that this will avoid the need for more fundamental change, including more tax revenue, if he intends to keep all the promises he`s making about more money for education, Medicaid reimbursements and services to children.
