2012 Lane Reports

Time for State Lawmakers to Pass Budgeting 101

The Lane Report, June 2012
Friday, June 1, 2012
by Marc J. Lane


Illinois is billions of dollars in the red, yet the state's legislators inexplicably continue to deny themselves the right to know how much the measures they consider would cost or save taxpayers.

In other states, “fiscal notes,” which estimate the costs or savings and the revenue gain or loss of proposed laws, are indispensable tools for legislators, budgeters, taxpayers and journalists. Yet Illinois' anemic Fiscal Note Act serves no useful purpose.

Most bills that wind their way through the General Assembly never have their likely fiscal impact measured. Unless a bill's sponsor or another member who gains the majority support of his chamber requests a fiscal note, the bill's spending and tax implications simply aren't scrutinized.

Those few bills whose fiscal impact is measured are usually evaluated by the very agencies that would be most affected if they were to become law, raising legitimate questions about the objectivity—indeed, the point—of the exercise.

According to the nonprofit Illinois Policy Institute, only 10 of 650 laws passed by the General Assembly last year—and no bill affecting Medicaid or education spending, two of the state's biggest and most controversial costs—were the subject of fiscal notes. The integrity of the budget process, and the capacity of legislators to be responsible stewards of taxpayer-funded resources, is painfully at issue when buying decisions are made without the benefit of price tags.

Opponents of an expanded fiscal note strategy warn that, with 4,000 bills introduced each year, greater transparency isn't worth the additional drain on already stretched government resources. So let's concede the argument and flip the presumption: Let's require a fiscal note on every bill that involves spending and taxation unless both the bill's sponsor and the majority of those in his chamber don't see a practical need for a note.

While we're at it, let's reform the system so that fiscal notes are the product of a neutral, reliable and independent source not tied to a single party or caucus. One obvious possibility is the state's Commission on Government Forecasting and Accountability, a legislative agency led by a bipartisan panel with a staff of about 15 people, but which can grow to accommodate the demands of good government. The methodology by which their estimate of costs or savings is developed should be rational and uniform, and take long-term fiscal impact into account.

And the public and the media should have access to a searchable database permitting taxpayers and their watchdogs to track fiscal notes and query those who draft them. Illinois' bleak financial condition requires no less.

Marc J. Lane is a Chicago attorney and chairman of the Illinois Task Force on Social Innovation, Entrepreneurship, and Enterprise.

Reprinted from Marc Lane's May 21, 2012 article, which appeared in Crain's Chicago Business.  Crain Communication Inc.'s permission is gratefully acknowledged. Copyright © 2012 by Crain's Communications Inc. 

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