In his budget address on March 7 Governor Rod Blagojevich cited many facts and figures. The problem is the budget’s lack of transparency makes it impossible to verify his facts or his figures.
The Institute for Truth in Accounting is calling for great transparency during the State’s budget process. We have talked to many legislators who have stated that they have had to vote on previous budgets without knowing if the numbers in the budget are accurate. This year more than ever, our Governor is proposing major changes in the tax structure and proposing massive increases in spending. Before the legislature votes on these changes, they (and their constituents) need to be provided with a truthful accounting of how these changes will affect the State’s and its citizens’ finances. The Institute is asking for the Governor to provide to us all with verifiable calculations, including the true costs, both short-term and long-term, of the additional spending proposed.
The Institute is also asking for a verifiable audit of the State’s financial condition. The State’s last financial statements (FY2006) reported a negative financial position of $44.5 billion, but this did not include the liability for post retirement health care benefits owed to State employees. The Civic Committee of the Commercial Club of Chicago has made an educated guess that the State’s is in debt by more than $100 billion. Before additional health care and education commitments are made, the Institute believes that the public and legislators should know how much the State is truly in debt, including the liability for post retirement health care benefits.
One recent success for greater transparency is that for the first time in years, the State Comptroller released the State’s latest financial report (FY 2006), before the budget process began. This year the financial report was issued on March 1, some ten months after the June 30, 2006 fiscal year ended. Last year it took a full year to issue this report, well after the budget process was complete. The Institute believes that the State Comptroller should be required to issue the State’s financial report on or before September 15, two and half month after the State’s fiscal year end, like corporations are required to do.
The Institute is also requesting that the Governor account to the taxpayers how his previous budgets have been announced as “balanced,” yet the State’s financial condition has continued to decrease each year. Our research indicates that by the time Governor Blagojevich took office, his predecessors had balanced the budget each year, but accumulated a $40 billion financial deficit. During his first three years, the Governor proposed and the legislature passed what they called “balanced” budgets. The Institute understands that a balanced budget means that all revenues the State takes in are equal to all expenses the State incurs. Therefore if balanced budgets were passed, then the State’s financial deficit should have remained the same $40 billion. But the State’s audited financial statements indicated the last three “balanced budgets” have increased the State’s financial deficit by more than $4.5 billion to $44.5 billion.
Because in Illinois a “balanced” budget does not means a zero deficit, the Institute is asking the State Comptroller to calculate and announce to the public and the General Assembly an estimate of the deficit that he will report in the financial statements, if the Governor’s proposed “balanced” budget is enacted.