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The Case for Zero-Based Budgeting

by Tony Peraica

I have long embraced the principle of “Zero-based budgeting” as true, meaningful budget reform — and Todd Stroger once promised to implement this principle in his budgeting process (another promise broken.)

So, what is zero-based budgeting?  I recently ran across a National Review article that clearly shows what this principle is, and how it has been successfully implemented in the state of Texas.

When the new Republican majority in the Texas legislature took office in 2003, they were left with a huge, $10 billion budget hole left by the previous Democrat majority. Instead of using the borrow-tax-spend principle that has become so painfully popular here in Illinois and Cook County — Governor Rick Perry and the Republicans did the exact opposite.

They refused to raise taxes.  And they embraced the idea of zero-based budgeting.

Read more:

Governor Perry told the legislature to not even bother sending him a bill with a tax increase, because he would not sign it. Instead, he submitted a budget in which every spending line was a zero — an act of political theater, to be sure, but an effective one. Republicans ran a classic good-cop/bad-cop routine on the bureaucracy, with Perry taking a hard line against tax increases and Rep. Talmadge Heflin, at that time the new Republican chairman of the Appropriations Committee, meeting with the heads of the state’s 35 largest agencies and asking them to start from zero. The agency chiefs were told that they had to keep spending at less than 87.5 percent of the previous year’s level, draconian cuts by the standards of most state governments, but they were given maximum flexibility in achieving those goals.

Now, that’s real budget reform. The results have been nothing short of successful:

  • Texas is home to 6 of the 25 largest cities in America.
  • If it were a country, Texas would today have the 15-largest economy of any country in the world.
  • 70 percent of the new jobs created in America in 2008 were created in Texas.
  • Texas has one of the most diverse economies in the country, including:
    • America’s highest-volume port
    • The world’s largest medical center
    • The headquarters of more Fortune 500 companies than any other state

So, why don’t the politicians in Springfield and Cook County follow the example of Texas, rather than the failed big-government template that has caused economic disaster here in Illinois and in states like California, New York and New Jersey?

Simple — because zero-based budgeting would require cutting the waste. It would require the elimination of jobs and contracts for friends, family and political allies.

It would result in the growth of the private sector, instead of the public sector — a needed shock to the system for the Chicago metro area, where 4 of our largest 5 employers are government.

The politicians here in Illinois would rather ignore the Texas case study. They would rather implement the liberal gameplan that has never once succeeded anywhere in the world.

Meanwhile, our unemployment, our rate of bankruptcies and foreclosures, our taxes, and our economic disaster will continue to grow.

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