Like states across the country, Illinois is in the midst of a budget crisis. But the crisis, preceded by years of budget gimmicks and creative accounting, should have caught no one by surprise. Now Illinois is faced with catastrophic choices that pit one crucial program against another. As Comptroller, I will be an ardent watchdog over taxpayer money, stopping any dishonest budget practices dead in their tracks and restoring fiscal discipline.
Rainy Day Fund
Every family knows that there are times when money is tight and times when there's a little extra after all the bills are paid. And while it's tempting to spend the surplus, it's better to save it for a rainy day.
And that's exactly what Illinois needs to do.
A state's income and spending operate on different cycles. During periods of economic growth, tax collections can exceed a state's spending needs. When the economy slows, tax revenue tends to decline, but the need for programs and services rises.
There's no question that we'll face an economic downturn in the future. But if we are fiscally responsible and plan ahead, we can soften the blow. A Rainy Day Fund can prevent the need for tax increases and short-term borrowing, which can further strain an already overextended budget.
Equally important, the Fund can also reduce the risk of budget shortfalls and ensure that we continue providing vital services -- educating our children, offering affordable prescription drugs to seniors, and maintaining mass transit -- without interruption.
When you're borrowing money, the lower the interest rate, the better.
Illinois' bond rating impacts the interest rate the state must pay to those who buy our bonds. When our rating is high, our interest rates are low.
Illinois has enjoyed a relatively strong bond rating in recent years, but now, it's taken a turn for the worse. Earlier this year, Illinois' bond rating was lowered based on our budget shortfalls. Faced with record deficits and the absence of a Rainy Day Fund, Illinois has a relatively high debt burden compared to other states.
If we do not address our structural budget problems now, our bond rating could be downgraded again, meaning it will cost Illinois more to borrow money, further exacerbating our financial situation.
As Comptroller, I will work for budget reforms to strengthen our bond rating, saving Illinois taxpayers millions.
Maximizing our Resources
My primary responsibility as Comptroller is to ensure the State's bond rating stays high and that we are fiscally sound. One of the ways that I can do this is to establish inter-fund transferring and surplus fund investment as a tool. Currently, when one dedicated fund generates a surplus, that money can be swept into the general operating budget and spent with no guarantee that it will be replaced. The result is two-fold: 1) the state ends up spending more money than it should; and 2) vital programs could come up short-handed. As Comptroller, I will require that any money taken from one fund and moved to another be replaced. By establishing responsible accounting practices, we can reign in state spending and protect programs that Illinois residents rely on.
I will also allow surplus funds to be invested in low risk investment vehicles to generate more revenue. The revenue generated from invested surplus funds can be used to leverage federal matching dollars and maximize Illinois' resources. Too many times Illinois has experienced budget shortfalls and failed to invest in programs at high enough levels to earn federal matching funds. These missed opportunities lead to outdated infrastructure, crumbling schools, and dangerous roads and bridges. However, through utilizing fund surplus revenue, we can access those much-needed federal dollars or provide stability to payment cycles to providers.