Illinois universities are blaming the recent budget impasse for their declining enrollment and financial problems. But the problems in higher education started long before the budget fight, and are largely self-inflicted.
Ted Dabrowski and John Klingner, Illinois Policy Institute News
While borrowing to help pay down the state’s unpaid bill backlog will save money on interest payments and relieve pressure on those waiting for cash, it also perpetuates Illinois’ spending problem.
Since 2006, Chicago Public Schools has been deprived of $2.5 billion in property tax revenue that has been diverted to Chicago TIF districts.
In trying to force a Chicago bailout, proponents of Senate Bill 1 are throwing hundreds of thousands of downstate and suburban students into limbo.
School districts’ have borrowed over $21 billion, increasing the burden on Illinois taxpayers.
An income tax hike to 5 percent makes a call for a progressive tax system during the 2018 gubernatorial race a much easier sell.
Illinois lawmakers should heed Moody’s Investors Service’s warnings about the state’s precarious economic health and dire fiscal situation and enact major structural spending reforms to balance the budget.
Illinois spends the most per student of any state in the Midwest. On average, Illinois schools spend $13,077 per student. Nearly half of the money Illinois spends on education goes to fund pensions.
The governor should reject tax hikes and push for the structural spending reforms Illinois needs to fix its fiscal crisis and improve its economy.
Pension funds aren’t immune to the volatility of the stock market. Even before Brexit, Moody’s warned that low investment returns are already putting Chicago’s pension funds at risk. A major stock market correction or another recession just might put Chicago and CPS over the edge if their already-underfunded pension systems collapse.
Under former Gov. Jim Edgar’s pension ramp, unfunded pension liabilities have increased nearly $100 billion despite taxpayers contributing $16.4 billion more to the five state-run pension systems than required under the Edgar plan.
Illinois has the most units of local government of any state in the country.
Middle-class Illinoisans who aren’t employed by the government are suffering, but Illinois House Speaker Mike Madigan stands in the way of solutions.
Pension holidays, steep increases in teachers' salaries, and lopsided ratios of teacher contributions to pension payouts have caused the Chicago Teachers’ Pension Fund’s unfunded liabilities to shoot up to $9 billion in 2015.