WILSON: Illinois financial woes defy easy answers, political blame game

Posted: Sep. 17, 2011 4:29 pm Updated: Nov. 29, 2014 5:16 am

The newest tax report by the Illinois comptroller shows that lots of tax exemptions and loopholes led to $6.6 billion the state did not receive in 2010.

In the report's greeting to readers, Illinois Comptroller Judy Baar Topinka explained that her office is required by state law to report certain information. She also explained the somewhat stilted title of the "Tax Expenditure Report."

"Tax expenditures are essentially tax breaks -- such as exemptions, credits or abatements -- given to individuals, corporations or other organizations. In fiscal year 2010, state agencies reported 238 such breaks, totaling roughly $6.6 billion in foregone revenues," Topinka said.

What goes unsaid is that $6 billion would have covered the unpaid bills that were owed by the state at the end of the fiscal year.

Topinka is a former legislator, former state treasurer and Republican nominee for governor in 2006. She ran against Rod Blagojevich when he won his second term in office. She often pointed out how Blagojevich became the poster boy for anti-business politics by pushing for higher taxes, higher fees and greater restrictions on Illinois employers.

With that in mind, it probably galls Topinka that one of the required reports from her office deals with the kind of tax breaks that Blagojevich often trumpeted when he told how big corporations weren't paying their fair share.

So is Topinka advocating an end to tax breaks and incentives for employers?

"No," spokesman Brad Hahn said.

"The comptroller would not support anything that would upset the state's economy or the ability to attract employers. In no way is she advocating the removal of those things. This most recent issue ... is highlighting the tax structure so people understand Illinois finances," Hahn said.

And Illinois finance is a complicated subject.

In May, Topinka's office released a report on the state pension systems, which represent a $75 billion liability. Her greeting included a warning.

"There are no easy answers. Difficult choices will have to be made," Topinka said.

In particular, she explained that a two-tier pension system that kicked in Jan. 1 means the pension liabilities on new hires will not obligate the state as much as the earlier pension schedule. The front page of the report also made it clear that state officials caused the problem through "years of raiding ... accounts and putting off payments for another time."

Topinka had another chance to speak directly to lawmakers this year. When the General Assembly ended its spring session without reauthorizing capital projects, she urged them to reconvene to finish their work before construction projects were halted.

"My message to fellow state leaders is simple: Do not play games with capital projects and the jobs they bring to Illinois," Topinka said.

As the state's top financial officer, Topinka's job deals with numbers and the complicated system that has put Illinois in financial peril.

She knows that some Democrats are going to suggest that ending tax loopholes would balance the budget. Topinka's response is that cutting tax incentives would drive jobs out of the state, reducing tax income.

She knows that some Republicans are going to suggest that too-generous pension programs are bankrupting the state. Topinka has made it clear that lawmakers and governors of both parties have skipped state contributions to the pension funds, while employees have made their contributions.

Neither party has all the solutions, or gets all the blame for the state's lousy finances.

Topinka was right when she said there are no easy answers and difficult choices are needed.


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