Illinois is making history, but not the type of history that is celebrated with ticker tape parades and cheering downtown rallies.
At the February luncheon meeting of the Association of Industrial Real Estate Brokers, Leslie Geissler Munger, Illinois State Comptroller, reminded the audience that for eight months now, Illinois has been without a budget. She said that has never happened throughout the State’s history.
In kicking off her discussion and providing AIRE members with a state of the State, Munger cited some really significant numbers:
- The state is now spending $400 million annually in late payment fees
- Solving the State’s problems solely through taxes would approximately double our tax rate to between seven and eight percent
- In 2015 the state lost 22,000 residents—more than any other state
- At the end of this fiscal the state could add another $6.2 billion in deficit spending bringing our total shortfall to $10-12 billion.
She did note that money comes into the state every day. The challenging part is determining what bills are paid each day. She also said that without an approved budget it essentially takes court orders and consent decrees for bills to get paid.
In spite of those dire numbers, it wasn’t all doom and gloom rhetoric from Munger. Tapping into her career in the private sector with Helene Curtis with her greatest success in managing the Suave business unit, Munger offered four business principles that can and should be used to solve Illinois’ financial problems:
- Solve the problem, not just the symptom
Munger insisted that Illinois’ current position is the result of decades of bad decision making. She said that for decades governmental leaders in Springfield didn’t attack the root of the problem, instead settling for the easy fix that did nothing but defer the problem to another day. She suggested that certain problems in the State may only be fixed by significant constitutional changes that will attack the heart of the problem.
- Adopt a cost-saving mindset in government
Illinois’ budget issues represent staggering numbers. Those totals, when viewed in the overall context can be overwhelming and paralyzing. Munger’s position is, however, that cost savings across a government body as big as the State of Illinois add up. She suggested that efforts like cross-training employees and giving them greater levels of responsibility can have a positive impact. These efforts, which mean doing things differently and perhaps consolidating roles creates a more efficient system. It also leads to millions of dollars in savings which, when aggregated, can have a significant impact on making a dent!
- Innovation is critical to remain competitive and cut costs
In business and in state government it is necessary and fiscally responsible to embrace technology and innovation can produce significant benefits. Munger noted how her department is in the process of replacing an antiquated computer system—programmed using COBALT—that was costing millions of dollars to maintain by an increasingly limited number of staff with knowledge of the system. When fully operational the new system will save the state approximately $500 – or half a billion dollars – and provide significantly higher levels of transparency.
- Growth is a game-changer
Based on her experience in managing the Suave brand turn around, Munger is a huge proponent that growth instead of simply raising taxes, is the ultimate game-changer. She recounted how she and her team made Suave the number one brand—the hands-down market leader—by investing in packaging and promotions, and raising the price. The growth was spectacular as Suave was turned into a $200 million brand (from $100 million).
Munger said she isn’t sorry she answered the phone more than a year ago when Governor Bruce Rauner called to gauge her interest in taking on the position (She did admit that she is often asked that question).
“It is possible in Illinois to grow revenue by being friendly to business, not just by raising taxes,” Munger said. “I believe we can get the state back on track if we constantly innovate and create the right conditions for business.”