Smarter spending: Investments vs. expenditures - Metropolitan Planning Council

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Smarter spending: Investments vs. expenditures

Illinois government spends a lot of money. The annual operating budget is upwards of $50 billion. The capital budget, monies used to pay for infrastructure, adds even more. Combined with other sources from the feds and local government, this year’s capital budget tops $26 billion.  Why is it that Illinois never seems to have enough money? Part of the reason lies in how Illinois spends the money it has.

Over the past 50 years, the United States has been a wealthy nation compared with others on the globe. That position has led to careless spending of resources for political purposes. We at the Council believe dollars should be invested rather than simply spent. Past calculations for spending impact focused on, say, construction jobs created for a roadway project, with little concern for the long-term impact of that road. Does that road connect people to jobs better? Does it help alleviate CO2 emissions and improve air quality? Will existing businesses flourish as a result of the new access provided? Had Illinois considered broader goals and outcomes, perhaps the spending patterns would be different and the results better for the long run.

Earlier this week, a Pew Center report made news by awarding Illinois a C- for its “money grade.” The primary cause cited for this barely passable mark was not the national recession that all states are currently facing, but rather years of fiscal mismanagement -- further evidence that smarter spending is needed to lead to investments that grow Illinois' economic pie rather than serve it up piece by piece, year after year.

Earlier this year, the White House Office of Management and Budget issued a memo to all department heads encouraging “place-based” spending that advances multiple goals and produces a better return on investment. This thinking from Washington has lead to several legislative proposals in Congress, most notably the National Transportation Objectives Act (H.R. 2724), which details specific goals and outcomes to be achieved by federal transportation spending. One such example is to ensure environmental protection by reducing transportation-generated CO2 emissions by 40 percent over 20 years. The Council wants such specific goals and quantifiable objectives to be included in next year’s reauthorization of the surface transportation bill.

This same rational is percolating in Springfield with the Transportation Investment Accountability Act. The language of the Act can be found in last year’s HB 4590. Next session, the Council looks forward to working with State Rep. Elaine Nekritz (D-Des Plaines) to pass a re-introduced version of the bill and subsequently with IDOT on the development of appropriate statewide goals and objectives for Illinois transportation spending.

I know when I manage my home finances that I ought to be making sure I invest a good percentage of my earnings if I want to increase my net worth. If all I do is buy pizza, I’ll be earning a C- for my “money grade” soon enough. I don’t want to be like Illinois.


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