Transparency and Accountability in State Budgeting: Challenges for Illinois and Other States
Never has there been such a critical need for improving states' fiscal procedures. Despite a national economic rebound, fiscal strains have continued to dog many state governments—Illinois in particular. This event will be devoted to identifying state budget practices that facilitate public understanding of the true nature, cost, and consequences of tax and spending policy choices—and others that do not.
In his preface to the Volcker Alliance’s recent report, Truth and Integrity in State Budgeting, former Federal Reserve Board Chairman Paul Volcker wrote: "The continued fiscal stress is tempting states to continue, and even intensify, budgeting and accounting practices that obscure their true financial position, shift current costs onto future generations, and push off the need to make hard choices on spending priorities and revenue practices."
Little can be done to undo the consequences of choices in past years to spend more than was flowing in—choices enabled by confusing budget reporting practices. Little can be done to change the brutal reality that states like Illinois still have to adopt some combination of large spending cuts and large revenue increases. But improved budget practices could clarify the need to make the tough choices sooner rather than later and avoid making things even worse.