8/9/2019 State of IL's Out of Control Spending

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been on a sharpand unaffordableupwardcurve.

The SolutionOver-spending isnt a problem that is goingaway by itself. In fiscal year 2009, Illinois spent$4.3 billion more out of the general fund thanit brought in from revenues. Without a restraintmechanism in place, most politicians will beinclined spend every available dime, regardlessof whether or population growth even warrantsit. Its time to put government on a diet.

How can this be done? With an expenditurelimit that would cap state spending at last

years budget multiplied by the previous yearscombined percentage rate of inflation andpopulation growth.

Why This WorksA sensible expenditure limit would ensurethat state spending doesnt grow beyondtaxpayers ability to pay for it. This spendingbrake still allows government to grow, butit prevents it from speeding dangerously outof control. Instead of reaching ever deeperinto the taxpayers wallet, government will beencouraged to focus on internal efficiencies andinnovations to improve and expand services.

If Illinois had enacted an expenditure limitin 2004 that limited spending growth topopulation plus inflation, the state could havecumulatively saved $13.7 billion over the pastsix years. Thats money that could have beenput in a rainy day fund, applied toward theunfunded public employee pension liabilities, oreven refunded to taxpayers.

Learn more at illinoispolicyinstitute.org.Policy

Point

August21,

2009

Out Of ControlThe explosion of Illinois stategovernment spending

The ProblemState spending in Illinois has skyrocketed overthe past decade, increasing 39 percent from1998 to 2008 (after inflation).

Appropriated Funds Expenditures include

general, highway, special state, bond financed,debt service, federal trust, revolving funds, andstate trust funds.

Illinoiss population growth has been minimal,increasing just under 7 percent between 1998and 2008. Population growth has been limited,but not so with per capita spending. In 1998,state spending per resident was $3,500. Tenyears later, state spending per resident was$4,600 (inflation adjusted). Governmentspending growth on a per-person basis has

TABLE I- Total State Appropriated Funds

Expenditures (1998 to 2008)

General

Expenditures

Lapse Period

Expenditures

Total

1998 $30,885,414,582.79 $1,598,267,786.42 $32,483,682,369.21

1998

(Adj.)

Riverside (Cook) Oak Brook

(DuPage)

$42,886,432,183.15

2008 $56,847,210,693.31 $2,556,327,780.01 $59,403,538,473.32

Spending growth (1998 adjusted to 2008) 39%

Source: Illinois State Comptroller, Traditional Budgetary Financial Reports1998, 2008Note: Inflation calculated with the Federal Reserve Bank of MinneapolissConsumer Price Index calculator

TABLE 2- Whats Included In

Appropriated Funds Expenditures

Source: Illinois State Comptroller

Breakdown (millions) 1998 2008

General Funds $17,904 $27,158

Highway Funds $2,531 $3,622

Special State Funds $6,927 $15,098

Bond Financed Funds $538 $286

Debt Service Funds $1,035 $4,452

Federal Trust Funds $237 $667State Trust Funds $931 $3,329

$32,484 $59,403

TABLE 3- Illinois Population Growth

1998 Population 2008 Population

12,069,774 12,901,563

Source: U.S. Census 1998, 2008

TABLE 4- Illinois Per Capita Spending

1998 Spending Per Capita 2008 Spending Per Capita

$3,553.21 $4,604.37

Source: Illinois State ComptrollerNote: 1998 Spending Per-Capita has been adjusted for inflation