Conventional Thinking

In the wake of the Governor's unexpected (in my mind) statement not to increase taxes last week, I have had a number of discussions as to the impact of his statement on the issue of education funding reform. Simply put, if you adhere to the belief that any reduction in our overreliance on property taxes in the funding of our schools will most likely come via a tax swap, then the Governor's statement pretty well amounts to a kiss of death for any flavor of that plan.

In just the last week, impromptu floor debate has broken out by members of both parties declaring that the time to fix education funding is well past due.

Similarly, the Governor's position will lead to some fascinating, and potentially untenable, budget discussions in the upcoming years. Ralph Martire weighed in on the subject in Saturday's Sun-Times. In his column arguing against a no new tax pledge by any candidate, he states:

In this proposed budget, at least $2.9 billion -- more than 10 percent -- of all projected spending for public services is scheduled to be financed with debt. Meanwhile, the Commission on Government Forecasting and Accountability projects that revenue growth for fiscal 2007 will be $860 million. That falls short of what's needed just to cover the inflationary cost of maintaining the current level of public services. This continues a longstanding trend of revenue underperformance by the state's fiscal system, first identified by Professor Fred Giertz in the late 1980s...

A no-tax pledge means policymakers won't even consider raising the revenue needed to fund our priorities responsibly. Effectively, the pledge leaves room for only two solutions: continue borrowing against the future or cut spending on services. But borrowing is irresponsible, and cutting spending isn't defensible. Illinois, the eighth richest and fifth most populous state, nonetheless ranks just 41st in spending. It also devotes well more than 90 percent of its budget to education, health care, human services and public safety. Do most voters really want a low-spending state like Illinois to disinvest in these essential services?

Working off of Martire's analysis, I think that it will be exceedingly difficult to find the support for any new borrowing plans, and it will be just as hard for a Democratic administration to cut into spending for programs that benefit many of the party's key constituencies.

Now the Governor may have intentionally (or unintentionally) left himself a little wiggle room when he said words to the effect of "I will not raise taxes on the hard-working people of Illinois". But I can't really imagine putting us at a further disadvantage when it comes to interstate competition for retaining and attracting business.

What may also be looming is a groundswell for the calling of the next Constitutional Convention in 2008. Given a decades-old reluctance of elected officials to take sigificant action toward addressing our school funding situation, a Con Con may wind up being the only practical way to make any significant reforms in our tax structure, school funding mechanisms, as well as a host of other items. I believe that it would also have the additional benefit of focusing public attention onto what is going on in Springfield and get the public engaged into the issues that affect them on a daily basis.

So feel free to weigh in on your thoughts on the no tax pledge or on the prospect of a Constitutional Convention.

UPDATE: The Lee Newspaper Group has a related article on the education funding 'debate' among gubernatorial candidates. Check it out to get a quick sense of where the candidates stand on this issue.