Dear Sen./Rep. Elected Official:

When the General Assembly passed the income tax increase early this year, many in the business community assumed the State had taken the tough first step toward addressing its structural budget deficit. With the revenue side of the equation addressed, we expected the next step would be to reign in spending. Instead, the governor proposed a $1.7 billion increase.

The fiscal health of the State of Illinois is fundamental to the overall economic health and climate of the state. Not addressing the structural deficit -- just increasing taxes -- makes Illinois less attractive for business expansion and job creation. It strongly suggests State leaders are not yet serious about getting our financial house in order. In business, if you're not handling your finances right, it casts doubt on your ability to manage other aspects of your operation.

Illinois has a long list of assets that should make it attractive to business. But unless state policymakers address the fundamental issue of fiscal management, those assets won't matter. Illinois must take the following steps to get its house in order:

Develop and adhere to a strategic multi-year plan to deal with the structural deficit. Put in place as many safeguards as possible to ensure future legislators are not able to undo the plan, short of a fiscal surplus.Adopt a budget for 2012 that includes an absolute reduction in year-over-year spending. Instruct state agencies to adopt a zero-budget approach based solely on the agency's core mission, purpose and key populations served. Any proposed budget that is not at a minimum flat or a net reduction from the previous year's amount should be rejected.Immediately stop all short term steps to postpone dealing with budget shortfalls including sweeping funds from dedicated accounts into general revenues, borrowing to cover current operating expenses, incurring long-term debt to finance short-term obligations, etc. Coordinate short term budget cuts with efforts to curtail long-term debt obligations and get current on outstanding bills. Establish and adhere to a plan for payment of outstanding bills to all vendors. Any operating surpluses should be used to reduce the backlog of accounts payableBonding to pay for past-due bills should be considered only after all other options are exhausted, if it's determined to be the least expensive long-term course of action, and it's done in coordination with other budget and cost reduction/control measures.

We know we can't turn Illinois' fiscal condition around in a year. Yet the longer we postpone the kind of steps necessary to turn things around, the longer the road to recovery. Let's take the painful medicine now, and send a clear message to those within our state and elsewhere that Illinois is serious about getting back on a solid financial footing.

/s/