Independent Pharmacies Look Forward to HB3479

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Independent Pharmacies Look Forward to HB3479

Independent Pharmacies Look Forward to HB3479

May 16 – Legislators are working on a bill that could help independent pharmacies receive proper reimbursement for filling Illinois Medicaid patients’ prescriptions.

Dale Colee, owner of Dale’s Southlake Pharmacy and Colee’s Corner Drugs, said HB3479 would require the Illinois Medicaid Managed Care Organizations to pay all pharmacies the same amount for prescriptions. “The PBM [Pharmacy Benefits Manager] is paying certain pharmacies – ones they are actually involved with – a higher rate than they are the independent pharmacies. This bill would require the reimbursement rate for the medication to not be below our acquisition cost and would be the same as what everyone else is getting reimbursed at this point.” He continued to say it costs around ten dollars to fill and process prescriptions and they are “not getting near that for close to 70 percent of those prescriptions.”

The bill has been passed by the House and is now awaiting approval by the Senate. Local State Representatives Sue Scherer and Bill Mitchell are co-sponsors of the bill and Senator Andy Manar is Chief Senate Sponsor. The Senate has a deadline of May 31, 2018 to pass the bill. Colee said if they do not approve the bill, it could have negative consequences for independent pharmacies. “If it doesn’t get passed, you are going to see a lot of independent and smaller pharmacies go to the wayside, especially if they are in an environment where they have a lot of public aid and managed care business.” Colee said he has a store within Crossing Healthcare that would be heavily affected because of the high volume of Medicaid patients.

This issue is not specific to Illinois. Colee mentioned there have been many pharmacies across the country, including Ohio and Arkansas, and the rate has caused independent pharmacy numbers to dwindle. “I’ve talked to a lot of the independent pharmacies and they are all in the same boat. There is a guy I know in the Staunton area where if he doesn’t get some sort of help in getting this turned around, he could lose his store.” Colee said when he started his business in Decatur 40 years ago, there were 18 independent pharmacies and two box stores in Decatur and now his store is the only independent pharmacy in Decatur and Sav-Mor helps to serve the residents of Mt. Zion.

Colee said independent pharmacies are part of the fabric of their communities by employing local people who spend their wages locally and make local donations. He said other stores differ from them because they earn their money in town and then spend the money elsewhere. “You do not see a lot of those organizations really going out and helping the community. You don’t see them doing a lot of donations and a lot of things within the framework of the community. That’s a major part of it. We are a part of the community. We live here and that’s what sets us apart from the big box stores.”

 

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Independent Pharmacies Look Forward to HB3479

Rauner’s reefer madness rules despite overwhelming support for legal pot

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As if anyone needed another reason to oust Bruce Rauner, consider this: there will never be legalized marijuana in Illinois as long as he’s governor.

Just in case his attempts to bankrupt public education weren’t enough of a deterrent to voting for his reelection.

All right, on the week of 4/20, the time has come for me to answer a few questions about the state’s effort to catch up with the rest of the modern world and legalize reefer.

Rauner’s reefer madness rules despite overwhelming support for legal pot

Will Illinois Face Another Budget Impasse?

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Passing a state budget is arguably the most important thing the Illinois General Assembly does every year — or at least should do every year.

After last year’s drama — when a two-year standoff ended with a Republican revolt against Governor Bruce Rauner — it’s an open question about how things will go this year.

So I set out to answer a simple question: Will there be another impasse?

The question may sound simple, but the answer, like most things in state government, is complicated.

Lawmakers took a long break from Springfield, for the primary election and the usual recess around Easter and Passover.

As session resumed this week, I’ve been asking everyone I can: “Do you think there’s going to be another budget impasse this year?”

“That is the question,” says state Sen. Chapin Rose, a Republican from Mahomet.

“‘No’ is the short answer to your question,” Rose says. “But I think the next question you should ask is: ‘Will it be a 12-month budget?’ And I’m less convinced of that.”

Rose and some of his Republican colleagues have been repeating this message — accusing Democrats of wanting only a short-term spending plan. The idea, Republicans say, is that Democrats hope to retake the governor’s mansion this fall, then pass the kind of wild tax hikes and spending that Republicans say Democrats would love to do.

The thing is, when you ask actual Democrats if they’d prefer a half-year budget, they too are speaking in one voice.

“No. We’ve been consistent in saying we need a full-year budget,” says Rep. Greg Harris. He’s from Chicago, and he’s one of the House Democrats’ top budget negotiators.

“I don’t know why the Republicans keep fantasizing about a six-month budget, but they do,” Harris says. “Maybe it’s wishful thinking on their part. I don’t know.”

It’s worth pausing here to remember this is not just a political fight.

People who are outside the Capitol Building have been trekking in to remind legislators of the dire consequences in the last budget stalemate. And they’re warning that could happen again if there’s no agreement this year.

Among the institutions most hammered were Illinois’ public universities. At a recent Senate budget hearing, University of Illinois vice president Barbara Wilson talked about a faculty brain drain linked to the impasse.

“You may know that we’ve become a little bit of a poaching ground for many of our peer institutions, who have noticed our reputational hit and have come after a lot of our talented faculty,” Wilson says.

U. of I. has even learned of schools allocating money to specifically target U. of I. professors.

“We know for a fact that Texas — and I include Texas A&M and the University of Texas — have a special fund set aside to go poach Illinois faculty,” Wilson says. “We’ve been told that by numerous individuals, including some of the faculty they’re going after.”

Other state universities say the lack of state funding — and not just during the impasse — has left buildings crumbling.

“In my 11 years as the president, I haven’t seen any money for repairs,” says Elaine Maimon of Governors State University, in the south suburbs of Chicago.

Despite that, she says GSU cannot wait to repair its roofs. So it’ll have to issue bonds to raise the money it needs — but even that is contingent.

“We’ve been told, loud and clear, if there’s no state budget by May 31st, we’re not going to have that avenue,” Maimon says. “So there has to be a state budget.”

Which brings us back to the question we started with: Will there be a state budget this year — or another impasse?

I thought the last word on the subject should go to one of the people instrumental in ending the last impasse: state Rep. David Harris, a Republican from Arlington Heights.

“I don’t believe we’ll have an impasse,” Harris says. “I believe that by the end of this session, we’ll have a budget for the new fiscal year.”

Harris was among the 16 Republicans who broke with Gov. Rauner to help Democrats raise taxes, pass a spending plan, and end the impasse.

He says the dynamics have changed from last year. Because of that vote to raise taxes, this time no legislator will have to make that politically difficult choice. And Harris points out that the governor’s own budget proposal counts on money from that tax increase.

So, with seven weeks to go in the spring legislative session, the consensus under the dome seems to be that no, there will not be another impasse.

Then again, a few years ago no one predicted Illinois would go years without a budget, and we know how that story ended.

Illinois Newsroom is a collaboration focused on expanding coverage of education, state politics, health and the environment.

Will Illinois Face Another Budget Impasse?

More toll lanes could be coming to Chicago area as highway funds lag

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Chicago-area residents may be seeing more toll roads in the coming years.

Shrinking funds for road repairs and expansion, particularly from gas taxes, means that states are looking at both tolling and private financing to help pay for projects, and Illinois is no exception.

The Illinois Department of Transportation is waiting for the General Assembly’s OK to pursue private financing to build new, tolled lanes on the Stevenson Expressway, or I-55. And the Chicago Metropolitan Agency for Planning, which sets funding priorities for the region, last week recommended more use of tolling to pay for highway projects, including the possibility of adding tolled lanes on Interstate 80 and the Eisenhower Expressway, or I-290.

“There must be new revenues,” said CMAP executive director Joe Szabo. “There’s no free ride.”

But before signing a deal to let a private company build toll lanes, governments need to make sure it’s in the public’s best interest over the long term, transportation experts caution. Governments have to watch out for contracts that could hamper flexibility, the way the Chicago parking meter lease hurts the city’s ability to say, create a bike lane where parking is now. Tolls also cannot be so high that free-flowing traffic becomes a privilege only for the well-to-do.

“If you have to pay $40 to $50 to get to work that’s really hard on people,” said Sheila Dunn, spokeswoman for the National Motorists Association, a driver advocacy group. Dunn also warned that tolls could increase prices for goods delivered by truck.

“I hope people wake up and say, ‘Hey, this is too much,’ ” Dunn said.

More tolling in Illinois

The Chicago Metropolitan Agency for Planning raised the issue of more tolls in a draft of its “On to 2050” plan for the Chicago region.

Tolling allows for private financing, since private companies are not interested in building something that does not bring a return. But these deals have not always worked out.

An example is the public-private deal to ease congestion on California’s State Route 91. The new toll lanes were a success at first, but the agreement kept the state from adding a lane and improving public transit. Eventually, the Orange County Transportation Authority, a government agency, bought the toll lanes.

A privately developed toll road in Texas went into bankruptcy, and the Indiana Toll Road is currently facing debt problems, according to published reports.

One thing the public needs to watch out for in toll road deals is how quickly tolls can rise, said David Besanko, professor at the Kellogg School of Management at Northwestern University.

“The public needs to be aware of what the formula is and that the formulas are based on something reasonable,” Besanko said. There also needs to be clarity up front about who has responsibility if the private entity runs into financial problems, and how to handle ongoing maintenance, he said.

“You have to make sure the public sector and taxpayers aren’t taking an undue share of the risk,” said Audrey Wennink, transportation director at the Metropolitan Planning Council, a Chicago-based public policy research group.

Transportation song quiz

Last week’s song was about a place of arrivals and departures — recorded by this group before its hits about turning and tambourines. It is “The Airport Song” by The Byrds. Gwen Ogi of Skokie was first with the right answer.

This week’s song is named for a vehicle often seen on city streets, but the song is about what’s gone missing. What is it, and who did it? The first person with the right answer gets a Tribune Tower guidebook, and glory.

mwisniewski@chicagotribune.com

Twitter @marywizchicago

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More toll lanes could be coming to Chicago area as highway funds lag

Statehouse Insider: Rauner sets achievable budget goals

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Sometimes the key to success is to set achievable goals. Or another way of putting it is to set the bar low enough you can’t fail.

Which brings us to Gov. Bruce Rauner’s budget goals for the spring session. He’s set out three things he wants from the budget lawmakers craft this year: That it be for a full year, that it be balanced and that it not include any new taxes.

That’s not exactly a lofty list. For one, even though some Republicans keep pushing the idea the Democrats will pass only a half-year budget, there appears to be no desire by them to do that. The Democrats fully expect J.B. Pritzker to get elected governor this year and they don’t want him to start his term facing a budget crisis.

For two, lawmakers approved a 32 percent increase in the state income tax last year. Rauner has and will use it as a focus for attacking Democrats this year. Most lawmakers are up for election this year. Does anyone seriously think anyone is going to vote for another tax hike this year? So the governor has already achieved this goal.

Finally, we have the question of the whole mess being balanced. As anyone knows, balanced is in the eye of the beholder. Majority party lawmakers will tell you they pass balanced budgets all of the time. Rauner, on the other hand, insists each of his budget proposals was balanced when he proposed them. Few outside of government believe either of them.

So everyone can just agree whatever passes is balanced and voila, goals achieved

* The long-awaited meeting between Rauner and Rep. Jeanne Ives happened last week. Kinda. Sorta.

Both were in a Springfield restaurant Wednesday night and Rauner stopped by Ives’ table long enough to say hello. On this much there seems to be agreement. After that, not so much.

Rauner said that during this brief encounter, the two agreed to meet again to talk about things and make nice after the contentious Republican primary. Ives’ camp said no such agreement was made.

You have to wonder at this point if it might be better that the two never get together to resolve their differences. The conflicting stories likely to emerge from such a meeting probably would set unity back another decade.

* ”We haven’t done any hard work in this committee at all. We should all be pretty much ashamed by ourselves.” Ives on the House Personnel and Pensions Committee, assessing what the committee has done, or not, to control state pension costs this year.

* The Department of Corrections went before a Senate budget panel last week and said it needs more than $400 million in additional appropriation authority to get through the rest of this fiscal year.

That’s a serious problem. Some Democrats expressed surprise at the news and criticized department officials for not opening their testimony about the dire situation they face.

Please spare us the mock horror and other theatrics. The fact Corrections was short about $400 million in the current budget was not new. Rauner Budget Director Hans Zigmund  testified to the same committee on Feb. 6 that a supplemental spending bill was needed, including for Corrections. Zigmund was asked when Corrections would run out of spending authority without the additional bill and he replied, ”Pretty soon.” That was early February.

It’s not because Republicans have dragged their feet on this. Bills were introduced in both the House and Senate in mid-February to address the problem. Neither has moved an inch since.

There are plenty of things out there to play politics with if that’s the desire. Messing around with the prison system and its ability to keep the bad guys where they belong maybe isn’t the wisest choice.

Contact Doug Finke at doug.finke@sj-r.com, 788-1527 or twitter.com/dougfinkesjr.

Statehouse Insider: Rauner sets achievable budget goals

Illinois has a $130 billion pension shortfall. Why aren’t Gov. Bruce Rauner and J.B. Pritzker talking about it?

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Rivals Bruce Rauner and J.B. Pritzker agree on little, yet they so far have found common purpose in tiptoeing around the pension minefield that likely will dictate the success or failure of whichever of them is sworn in next year.

And that avoidance by Republican incumbent Rauner and Democratic challenger Pritzker is in keeping with a long tradition that fed the crisis in the first place.

Dating back to the days of Prohibition, Illinois governors and lawmakers from both parties have mostly abstained from the sort of voter displeasing fiscal fortitude needed to balance retirement obligations with other financial needs.

Now, that chronic political instinct to put off tough decisions until after the next election — and the next and the next — has ballooned the cost and narrowed pension-fixing options to either expensively painful or pie-in-the-sky.

The latest crop of ideas come not from political leaders but from think tanks and activists. They range from amending the state constitution to dialing back ironclad pension protections embedded in the state charter, to refinancing pension debt like a mortgage, to paying most of the debt off quickly by essentially taking out the mother-of-all-loans.

Each idea faces daunting obstacles, be they political, legal, financial — or all three. Layered on top of it all is deep public suspicion of the leaders in charge of fixing things.

One idea apparently not on the table may be the most straightforward though is the most politically fraught—a major tax increase that raises revenue to pay down the debt.

“It’s hard to see a solution that isn’t really dramatic,” said J. P. Aubry, director of state and local research at Boston College’s Center for Retirement Research. “This is a political thing and not a pension mechanics thing.”

The pension crisis, which has saddled Illinois with the lowest credit rating among the 50 states, is a trick box because it grew over generations of neglect. Yet to solve it requires a long-term commitment to financial discipline, and history has shown that is not part of Illinois’ political DNA.

Further complicating any solution is the pension clause inserted in the state constitution of 1970 that forbids benefits from being “diminished or impaired.” Three years ago, the Illinois Supreme Court unanimously declared those words to be a sacred trust that cannot be violated.

In the court’s bluntly worded opinion, which struck down a 2013 law reducing benefits promised most veteran public workers, the justices also blamed pension problems on the timidity of state leaders.

The “funding problems which developed were entirely foreseeable,” the justices wrote. “It is a crisis for which the General Assembly is largely responsible.”

Changing the law

So if the Constitution is an obstacle to change, why not just change the Constitution? That, in essence, is the argument underpinning a recent recommendation from the Civic Federation, a budget watchdog, for an Illinois Constitutional amendment aimed at modifying the pension clause to allow “reasonable, moderate changes” to retiree benefits.

Pension costs already consume nearly a quarter of state spending and without reforms to the retirement system, increased amounts will mean state funds continuing to be diverted from “crucial government services,” the group said.

Changing the Illinois Constitution, though, is no slam-dunk, and not just because of procedural hurdles requiring extraordinary votes of first the General Assembly and then voters at large.

It is far from clear whether courts would allow the state to reduce payments to current retirees or pension promises to long-time employees whose benefits have been constitutionally protected for almost a half-century.

“You can’t retroactively change substantive rights,” said Ann Lousin, a professor of constitutional law at John Marshall Law School who was a research assistant at the 1970 constitutional convention.

“This is another one of those kick-the-can things. We basically are unable to fund the pensions properly, even though lawmakers know what they could do to fix things. They just won’t do it,” said Lousin, referring to tax increases that could be enacted.

Neither Pritzker nor Rauner make mention of pension reform plans on their campaign websites. As the sitting governor, however, Rauner reaffirmed his support in early April for a constitutionally questionable bill that would give employees the choice between keeping annual cost-of-living increases or having future pay increases factored into their pensions, but not both.

The governor has also proposed shifting some of the cost of funding pensions for teachers and college educators away from the state and on to local schools and state universities. Both ideas have met stiff resistance from Democrats and Republicans alike.

Refinancing the debt

History convinces Ralph Martire, executive director of the Center for Tax and Budget Accountability, a nonpartisan think tank, that raising taxes to meet the obligations will never happen. As he sees it, the only way out of the crisis is to refinance the outstanding debt.

“It’s like refinancing your home mortgage if you’ve got a big balloon payment coming. Do you get rid of your home? No,” said Martire. “You refinance the existing debt to make an easier and more affordable payment stream.”

The catch to that idea, however, is that refinancing isn’t free whether it’s for a mortgage or a whopping state pension debt. Martire estimates such a scheme would require the state to float an additional $11.25 billion in bonds that would add to pension costs in the short-run but over future decades would save $67 billion.

“There’s not a downside, compared to what we have. We already have a credit rating that’s in the tank,” Martire said. “They’ve played all the games they can play, and there’s really only one rational way out.”

Experts in the credit markets doubt Martire’s plan will be greeted with the enthusiasm expressed by its author. That’s partly because the folks with the purse-strings have memories of being fooled by previous Illinois efforts to retool the pension debt.

Illinois efforts to retool the pension debt.

“This has to be tied to some ironclad protections that things will get better,” said Richard Cicarrone, president and CEO of Merritt Research Services LLC, which focuses on credit information related to municipal bonds. “There have been a lot of empty promises and games before.”

Indeed, the Chicago-based Government Finance Officers Association argues against state and local governments issuing bonds to cover pension obligations.

Each of those variables raises even bigger questions about yet a different pension-related borrowing plan that makes the scope of Martire’s proposal look like chump change. The State Universities Annuitants Association, an advocacy group for college workers and retirees, is asking the General Assembly to authorize a whopping $109 billion bond sale to get the pension funds in solid financial condition by 2045 and save the state $100 billion in the interim.

“Borrowing is a real desperation move,” said William Glasgall, who directs state and local initiatives for the Volcker Alliance, a New York-based nonprofit that advocates for policies that rebuild public trust in government. “A $100 billion sale is beyond absurd. I don’t think there are enough investors to buy something that size, especially given Illinois’ crappy bond rating.”

Glasgall also questioned the smaller bond sale proposal of Martire, arguing even that was enough to crowd out the availability of borrowing for road repairs, new bridges or new investments in higher education “that would provide jobs for the future.”

“How do you justify making your grandchildren pay for salary costs from 20 years ago?” Glasgall asked.

A tough sell

When Detroit, Stockton, California and other municipalities got into financial trouble, a bankruptcy judge handled outstanding pension debts by ordering benefit cuts among other savings. States like Illinois are barred from seeking bankruptcy protection, so there could be no supervisory oversight on the horizon, no judge to crack the whip.

The state has the power to get itself out of this mess by raising taxes or trying to convince unions to agree to money-saving concessions that free up funds to pay down the debt. But lawmakers are politically loath to do it, let alone talk about it with any specificity.

Illinois’ financial crisis isn’t confined to pensions. The backlog of unpaid bills in 2017 at one point soared to nearly $16.7 billion, though it has since been halved. The stiffing of vendors has helped further a credibility crisis that hinders whatever the state decides to do with pensions.

“The people of Illinois are so unhappy with government that they don’t trust them,” said David Yepsen, the former director of the Paul Simon Public Policy Institute at Southern Illinois University.

“They don’t believe that money they give the state will be used for the purpose for which it was intended. There are so many examples of corruption and abuse that it’ll be a tough sell to tell taxpayers that they have to cover these pension benefits,” Yepsen said.

Even if there were some grand and lasting bargain to stabilize state finances, the pension funds would effectively stand in line with all the other interests with their hands out, looking for their share and hoping for a long-awaited fix.

“There’s no other solution to right the ship with cuts around the edges,” Aubry said. “There’s going to have to be a moment when everyone sits down at the table and says, ‘Obviously the status quo can’t persist.’ The question is when and how that comes.”







Illinois has a $130 billion pension shortfall. Why aren’t Gov. Bruce Rauner and J.B. Pritzker talking about it?

Budget Woes, Out-Migration Color Illinois Gov. Race

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Budget Woes, Out-Migration Color Illinois Gov. Race

COMMENTARY



What’s going on in Illinois?

Pundits like to point to the recent Republican primary challenge to incumbent Gov. Bruce Rauner as a “sexy” story of party infighting. Or the fact that the 2018 governor’s race will almost certainly be the most expensive in U.S. history.

But what’s playing out in Illinois, a state with the biggest pension crisis in the nation and the country’s worst outmigration problem, isn’t about party politics or campaign coffers.

It’s about something much simpler than that, and much more important: faith in the future.

People here are wondering: Should I stay or should I go?

The state’s population has been shrinking for four consecutive years. Last year, 115,000 people on net made the choice to relocate. As a result of its rapid out-migration, Illinois dropped from the fifth-largest state to the sixth-largest, falling behind Pennsylvania.

But a lot of people here aren’t in a position to leave. They have work, families and lives built in Illinois, and they’re wondering how to improve their quality of life. It’s a fundamental struggle, and it plays out in two policy arenas: jobs and take-home pay.

Illinois’ economy has picked up recently, but it’s still lagging the rest of the country. A 2017 report showed Illinois had the worst income growth of any state in the nation. And the fact that Illinoisans are shouldering one of the nation’s highest state and local tax burdens doesn’t help.

People with white-collar jobs in Chicago and the suburbs are getting by, some of them quite well. But many households are struggling, particularly those in blue-collar areas. Many downstate communities are still reeling from the recession that began nearly a decade ago.

People are sick of hearing about the state’s problems, because they’ve already been shouldering the effects of those problems for years. Illinoisans know their state has major issues – now they want to know who’s going to fix it, and how.

As they look for answers and solutions, they’re facing two divergent paths forward.

On one hand, Democratic gubernatorial nominee J.B. Pritzker is pitching a “temporary” increase to the current flat income tax, with exemptions for low-income and middle-class earners (it’s unclear who is included in this group, but there you go). This is meant to buy time until lawmakers figure out how to pass a progressive income tax, one of the crown jewels of the policy platform upon which Pritzker is running.

On the other hand, Rauner is preaching what got him elected in 2014: pro-growth economic reforms, including lower taxes, and taking on the state’s most reviled political boss: Democratic House Speaker Mike Madigan.

No matter who gets elected, Illinois will never have enough money to fund core government services and cover its monumental pension obligations if politicians don’t address spending growth: From 2008-2015, state spending grew 25 percent times faster than incomes.

Politicians come and go, but problems like the ones Illinois is facing don’t go away on their own. The people of the state know what’s going on. Now what they need is simple: hope.

Things look bleak right now. But enact a few reforms, and all of the sudden Illinois looks like a totally different place.

Illinois has some of the most unfair laws in the region when it comes to negotiating with government worker unions. That, in turn, drives up the cost of operating government. But by taking a page from neighboring states – all of which have enacted laws that help rein in government worker union costs and power, including strike prohibitions and limits on what can be negotiated into government worker contracts – Illinoisans would see their state and local governments become more efficient and cost-effective.

Illinois’ pension debt has soared to $250 billion, affecting not only taxpayers but the men and women who have been promised a pension in retirement. Taxpayers continue to pour in more and more money to the system, yet debt continues to pile up. There will never be enough money to properly fund government pensions in Illinois, which is why the state should expand the 401(k)-style pension plan already offered to university workers to the rest of state government employees. Long-term, lawmakers must enact a constitutional amendment to allow for foundational pension reforms.

And ultimately, Illinois needs real fiscal responsibility. The state hasn’t had a truly balanced budget for more than 15 years. A spending cap that ties government spending growth to what taxpayers can afford would provide certainty to the budgeting process, and would stave off future tax hikes.

These changes aren’t easy, and they certainly aren’t sexy. They don’t capture the public imagination in the Land of Lincoln. But maybe, it’s finally time they should.

Hilary Gowins is vice president of communications for the Illinois Policy Institute, a think tank that promotes free markets and limited government.

Budget Woes, Out-Migration Color Illinois Gov. Race