After a decade of an unprecedented economic boom in this country, this is no easy time to be governor of a state such as Illinois. Even before Sept. 11, the nation’s economic slowdown was hurting revenues from sales and income taxes that in recent years grew like sweet corn in August. Meanwhile, demand for costly state services (Medicaid, unemployment and welfare payments) was beginning to rise.
It would be pleasant to report that, during the good times, the people who run Illinois prepared for the inevitable downturn by socking away lots of money. But no such luck. Legislators have spent to their hearts’ content.
Then came Sept. 11. In a speech last week, Gov. George Ryan blamed the terrorist attack for much of what he now estimates will be a $450 million shortfall for the fiscal year that started July 1. Only with a microscope can you discern hints in his speech that the state’s dilemma originated not with Sept. 11, but with the spendthrifts of Springfield who overestimated revenues.
“Spending has increased, certainly, but we’ve spent money because we’ve had money to spend,” Ryan said in his speech. Translation: We were just too shortsighted to control our urges.
Ryan’s advisers are praying the state budget won’t take a bigger hit in the months after Sept. 11 than it did in the slowdown-impacted months before that. Ryan’s advisers also are praying that an economic recovery starts early in 2002. Judging by current drops in retail sales and employment, they had better pray mighty hard.
Yes, prayer can work wonders. But this is reminiscent of the optimistic bachelor who says, “I expect to have good-looking children. All I have to do is convince Cate Blanchett or Claudia Schiffer to marry me.”
Other governors are singing much darker dirges about their states’ finances. Perhaps Ryan didn’t want to frighten people by suggesting in his speech that Sept. 11 could blow a much bigger hole in his budget. Or maybe he’s just a little embarrassed that Illinois didn’t save money when there was money to save.
But for now, $450 million is his number. To close that gap he’s cutting $50 million in expenditures, he’s asking agencies to be prepared to reduce their budgets by 2 percent, and–like many a governor before him–he’s hoping to get more Medicaid money from Washington.
In the private sector, though, those would be considered old-fashioned tweaks, not bold steps. And if they don’t do the trick? What happens if the economic damage is deeper–or the recovery slower–than the governor can foresee?
Ryan will leave office in 15 months. He has seized on two golden opportunities to enhance his legacy, his moratorium on capital punishment and his plans to expand aviation capacity. Sept. 11 has given Ryan a new challenge: By addressing his state’s financial dilemma, he can show that he isn’t just a guv for the good times.
Ryan should lead the downsizing of state government. Doing so now can prevent short-term embarrassment and leave Illinois healthy for the future. As he said when he announced his O’Hare plan: “That’s the reason we’re starting now. We’ve got to get ahead of it.”
The governor knows his state has a budget problem–and given what other governors are saying, he can’t profess to be shocked if it only grows worse. He clearly sees the risk.
Granted, what needs doing isn’t a task for Ryan alone. Legislative leaders agreed to pass all those costly bills and programs he approved–including the porky projects called “member initiatives” that legislators use to buy off voters back home. Mining the state’s hard-pressed budget to pay for pet projects now seems even more offensive than it did during the fat years.
Now is the time to seriously reduce the state’s chubby overhead. Not just one year’s expenses, but permanent overhead. Ryan and the legislative leaders will never have a better reason–or more political cover–to make tough calls. And the calls will be tough. So many people and groups are vested in keeping Springfield a source of jobs and contracts that it will be difficult for those who run the government to begin trimming its wretched excesses. But there is no better way to diminish the cycles of feast and famine that plague the state’s budget process.
Illinois pols talk a lot about streamlining government. But lots of common-sense proposals–such as privatizing food services at prisons and mental health hospitals–never come to pass.
If Ryan & Co. don’t act, a worsening budget situation could force much harsher alternatives early in 2002 or beyond: cutting back medical care for the poor, borrowing against future revenues, curbing state aid to public schools, dragging out payments to health providers and others who rely on the state to pay its bills. Or, of course, legislators could raise taxes–their least palatable alternative in an election year.
State government brims with programs, agencies, maybe even entire departments that have outlived their reasons to be. The governor even has an office of performance review, which is said to be chock-full of good ideas for more efficient operations.
Now is the time not just to trim expenses and hope for the best, but to permanently cut that overhead. This doesn’t have to mean huge layoffs; even now, the state still is hiring new employees. It does, though, mean doing the hard job of shuffling some workers to other departments in order to eliminate their current positions.
Some of Ryan’s associates say he knows state government needs to shrink. But he resists layoffs; job cuts hurt employees and their families.
Fair enough. But as his O’Hare move demonstrates, Ryan also has been willing to risk the consequences and do what he must. If he and the legislative leaders start now to meaningfully downsize state government–before they face a painful budget crisis–they can see to it that many people who lose one state job still can acquire another. That would avoid a meat-cleaver solution if the current revenue estimates flop.
Ryan has reportedly told aides that he wants to leave the state’s checkbook in the same good shape it was when he inherited it from Gov. Jim Edgar. That’s a fair goal for a governor whose state too often has bought now and paid later.
But the uncertainties of the next months, even years, now make taking a tough stance on finances all the more imperative.
The governor should lead Illinois to do something this state never has shown the ability to do: Dust away the cobwebs and modernize government to the point that Illinois taxpayers can afford it in times of hardship as well as growth.
That would mean blasting some groups of employees out of their cozy sinecures (example: why does it take more than one bureaucracy to oversee public colleges and universities?) and focusing state government not on all the things legislators would like it to do, but on a narrower agenda that it should perform with excellence. It is time, too, to stop putting off a hard look at this state’s cobbled together Medicaid program, and to decide what the state’s commitment to its poorest citizens will be as well as how Springfield intends to pay for it over the long haul.
No one knows where this state’s finances are headed. But the people responsible for balancing the budget–governor and legislators alike–shouldn’t wait to restructure until they do know.
Ryan wants to be remembered as a governor who made the tough decisions. His call for expansion at O’Hare despite opposition from suburban Republicans should help do just that. A responsible downsizing that anticipates tougher days ahead for state government would take that much courage and more.
But as Ryan says, we’ve got to get ahead of it.
