Across the Board Cuts

As the introductory reports in the IGPA Budget Policy Toolbox demonstrate, projected state spending in Illinois outpaces projected revenue for the next several years, with the gap increasing over time. IGPA’s Fiscal Futures Project has found that from 2015 onward, the deficit will rise from around $4 billion per year to over $12 billion per year in 2025, even under an optimistic pension reform scenario. This unsustainable state of affairs can be addressed by increasing revenue and/or decreasing spending. The projected deficit could even be helped by allowing spending to grow—just at a slower rate than currently expected (what we call “bending the curve”), or by substantial economic growth in the state. Other reports in the Budget Policy Toolbox discuss various approaches to increasing revenue. Across-the-board budget cuts can be useful as political rhetoric but have significant difficulties of implementation. To mitigate these implementation problems, policymakers can: Require cuts at the department or agency level— rather than the program level—for greater flexibility; Allow for differential percentage cuts among the different departments or agencies based on a current assessment of policy priorities and the impact of reduced government spending on those priorities. But, of course, these sorts of modifications move any such budget reduction away from a pure ATB cut to a plan based on the priorities and resources of the state. In other words, these modifications move in the direction of the normal budget-making process.